Valeant, which acquired two Raleigh-based drug firms last year, was blasted for its pricing strategies in a U.S. Senate hearing on Wednesday.

Meanwhile, The Wall Street Journal reports that veteran Triangle life science executive Bob Ingram is going to give up his post as board chairman.

Ingram is expected to step down as early as Friday as part of a bigger board shakeup, the newspaper reported.

“Incoming Chief Executive Joseph Papa, a drug-industry veteran, will also join the board and will take on the role of chairman,”according to the Journal. “He is expected to start work Monday.”

Ingram, who also leads Hatteras Venture Partners in Durham and was a former top executive at Glaxo, has led Valeant’s board through an investigation that uncovered what The WSJ describes as “an accounting error related to sales to a mail-order pharmacy that pushed Valeant drugs.”

“[F]ive of its long-standing directors have agreed to step down to make room for new nominees, according to people familiar with the matter,” The newspaper said.

“Four new directors are lined up to join the board, the people said. Their names couldn’t be learned, but they draw heavily from traditional pharmaceutical companies, the people said—a sign that Valeant is looking for credibility from an industry it has long criticized as bloated, slow-moving and wasteful.”

At the Senate hearing, lawmakers accused Valeant (NYSE: VRX) of gouging patients to reward Wall Street investors.

“Blistering criticism”

The blistering criticisms from Senate Republicans and Democrats came as Valeant’s outgoing CEO expressed regrets for the most egregious price increases and a billionaire hedge fund investor defended the company’s business model.

Last year, Valeant acquired Raleigh-based Salix Pharmaceuticals and startup Sprout Pharmaceuticals. Valeant paid some $1 billion for Sprout, which won FDA approval for a female libido-enhancing drug known as Addyi.

Sprout CEO Cindy Whitehead left Valeant in December. She and other investors in Sprout say Valeant is not doing enough to promote sales of Addyi and cite high costs as a reason for a lack of sales.

Salix, meanwhile, is subject to investigation for inventory matters.

Valeant’s stock price surged for years, fueled by a strategy of gobbling up smaller companies and raising prices on niche drugs — bypassing the huge research and development investments typical of the drug industry. The company seemed to offer a cheaper, more reliable business model that made it a favorite with investors.

But the company’s approach has drawn scrutiny from federal prosecutors, Congress and its own investors.

Throughout the hearing, members of the Senate Committee on Aging laid into the Canadian drugmaker’s strategy of acquiring companies, slashing spending and jacking up prices.

Bi-partisan questioning

“Valeant’s monopoly model operates at the expense of real people,” said Sen. Susan Collins, R-Maine, in her opening statement.

Berna Heyman, a patient with a rare genetic disorder called Wilson’s Disease, testified that the co-pay on her medication increased from $700 per year to more than $10,000. The 30-year-old drug, Syprine, was acquired by Valeant in 2010 and has seen its price increase more than 3,000 percent. After her story appeared in the press Valeant offered free medication and tried to deliver flowers.

“I refused the flowers,” Heyman said.

Ranking Democrat Claire McCaskill, D-Missouri, said executives with ties to Wall Street have driven the adoption of Valeant’s price-hiking tactics, including former hedge fund manager Martin Shkreli who became the poster-child for the issue last year.

“It’s using patients as hostages, it’s immoral,” McCaskill said. “It hurts real people and it makes Americans very, very angry.”

The committee issued subpoenas to compel the appearance of Valeant’s outgoing CEO, J. Michael Pearson and its former chief financial officer, Howard Schiller.

Lawmakers saved some of their harshest words for hedge fund manager William Ackman, who attempted to explain why Valeant’s “low-cost and disciplined” business model made it a smart investment.

Ackman, whose fund Pershing Square Capital controls $12 billion, said Valeant can do “more for innovation in pharma by acquiring other drug companies” than by developing its own drugs.

But McCaskill charged that Valeant’s business model relies on large price increases.

“Can you find me one drug that Valeant didn’t raise the price on after you acquired it?” she asked.

Ackman said he could not.

“Not in the United States,” Pearson replied.

With only days remaining in his tenure as CEO, Pearson expressed regrets for the company’s largest price hikes, specifically increases of 300 percent and over 700 percent on two life-saving heart drugs.

Collins laid bare the eye-popping profits Valeant collected on one of those drugs, Isoprell. According to documents distributed at the hearing, Valeant spent just $40,000 on manufacturing the medicine in one recent month, while reaping $17 million in profit from it in the last quarter.

“Valeant was too aggressive and I, as its leader, was too aggressive,” Pearson told lawmakers. “I regret pursuing transactions where a central premise was a planned increase in the prices of the medicines.”

Ackman agreed that mistakes had been made. He said he would immediately use his position on Valeant’s board to recommend a 30 percent price cut for Isoprell and the second heart drug, Nitropress.

“A lot is going to change,” he told lawmakers. Lawmakers pointed out that those cuts would still dwarf the price increases on the drugs since their acquisition by Valeant.

Ackman took credit for the recent decision to replace Pearson with Papa, CEO of generic drugmaker Perrigo Co. Ackman said Papa could formally take charge at Valeantas soon as Monday.

In recent months, Valeant has been swamped by a host of problems including three ongoing federal probes of its accounting and pricing practices, massive debt and the threat of default on agreements with creditors and bondholders.

The intense scrutiny of the Laval, Quebec-based company has triggered repeated sell-offs of Valeant shares, which have lost nearly 90 percent of their value since peaking last August.

Read more from The WSJ at:

http://www.wsj.com/articles/valeant-pharmaceuticals-to-make-sweeping-changes-to-board-1461805145?ru=yahoo?mod=yahoo_itp