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The head offices of Valeant Pharmaceuticals International Inc. are seen in Laval, Quebec May 20, 2014.

CHRISTINNE MUSCHI/REUTERS

The two drugs that have been the focus of the pricing controversy surrounding Valeant Pharmaceuticals International Inc. are both heart medications the company acquired in February of this year.

Nitropress and Isuprel were purchased by Valeant for an undisclosed amount from Marathon Pharmaceuticals LLC, as part of a package of about half a dozen drugs the Illinois company was divesting in order to focus its efforts on treatments for rare diseases.

Nitropress is used to dilate blood vessels and reduce blood pressure. Isuprel has a similar effect, and is used to help treat heart attacks and congestive heart failure.

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According to a Wall Street Journal report in April, the same day that Valeant bought the rights to the drugs, it jacked up the prices dramatically. A vial of Nitropress went from $257.80 (U.S.) to $805.61, a boost of 212 per cent, while Isuprel was bumped up 525 per cent from $215.46 to $1,346.62. A Valeant spokeswoman said at the time that the company's duty was to shareholders and to "maximize the value" of the products it sells.

The newspaper report on the increases caught the eye of members of the U.S. Congress, who in August asked Valeant for information about revenue, costs and expenses for these drugs.

But it wasn't until Democratic presidential candidate Hillary Clinton said last week that if she is elected, she would stop price gouging by drug companies, that investors became nervous and the price of pharmaceutical companies – including Valeant – began to really plunge.

Then on Monday, 18 Democratic members of the U.S. House of Representatives committee on oversight and government reform asked its chairman to subpoena Valeant to force it to turn over documents related to the two drugs' price increases. Valeant shares fell another 16.5 per cent.

The company's shares slipped again on Tuesday, falling another 4.4 per cent. They are now $135 (Canadian) lower than their peak of $347 in early August.

Valeant has said little about the controversy, although chief executive officer Michael Pearson sent a letter to employees on Monday saying the company will prosper and grow, even without significant price increases.

The company issued a statement on Tuesday saying it "prices its treatments based on a range of factors, including clinical benefits and the value they bring to patients, physicians, payers and society." It also noted it maintains "patient assistance programs" to help people who have "financial obstacles."

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Analyst Douglas Miehm of RBC Dominion Securities Inc. has calculated what would happen if the price of Nitropress and Isuprel – which are Valeant's seventh and 11th largest brands, respectively – reverted to 2014 levels. There would be a loss of revenue of about $310-million (U.S) a year, he said, and a cut in earnings per share of about 70 cents.

That would mean a loss in share value of about $8 to $10 a share, Mr. Miehm concluded, suggesting the recent plunge in stock prices is "unjustified."

Neil Maruoka, an analyst with Canaccord Genuity Group Inc., said in a report that Valeant is "playing the poster boy for the perceived ills of an industry."

He said he doesn't believe that "there is anything imminent" regarding price controls. He also said that any changes "would have to get past the argument that pricing caps will stifle innovation." He, too, said the selling of Valeant stock is "overdone," noting that only a small part of the company's portfolio of drugs relies on increasing prices to drive growth. Much of Valeant's revenue comes from markets outside the United States where prices can't be increased, he said.

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