J. Michael Pearson oversaw a period of aggressive corporate expansion at Valeant Pharmaceuticals International, where he utilized an acquisition-heavy strategy that drove the company's stock valuation up by more than 2,300 percent. His tenure as CEO was marked by rapid growth, significant price increases for essential medications, and intense scrutiny from United States government regulators.
Professional Background
Born in London, Ontario, in 1960, Pearson moved to New Jersey at age 12. He completed his undergraduate studies at Duke University, graduating summa cum laude in 1981, and later earned an MBA from the University of Virginia Darden Graduate School of Business Administration. Before his leadership at Valeant, Pearson spent 23 years at the consulting firm McKinsey & Company, where he eventually rose to the role of director.
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Pearson began consulting for Valeant in 2007 before assuming the role of CEO in 2008. His business model prioritized purchasing smaller drug manufacturers and slashing research and development budgets to approximately 3 percent of sales, a sharp contrast to the 15 to 20 percent typical of the pharmaceutical industry. Following the 2010 merger with Biovail, the company relocated its headquarters to Mississauga, Ontario, allowing it to reduce its corporate tax rate to roughly 5 percent.
Regulatory and Public Scrutiny
The company faced significant backlash due to steep price hikes on life-saving drugs like Isuprel and Nitropress. In April 2016, Pearson appeared before the United States Senate Special Committee on Aging to address these pricing practices and their impact on the healthcare system. The scrutiny intensified after Citron Research published a negative report in 2016, leading to a precipitous decline in Valeant’s stock price.
Departure and Litigation
Pearson’s departure from Valeant was confirmed on March 21, 2016, with the company noting the separation was not mutual. By April 2016, he was forced to step down as CEO. In 2017, he initiated a $31 million lawsuit against the company, alleging wrongful termination. A New Jersey judge subsequently ruled that his claims must be resolved through arbitration rather than in a court of law.
Fast facts
- Born: 1960, London, Ontario
- Citizenship: Canada
- Education: Duke University, University of Virginia
- Former Role: Chairman and CEO, Valeant Pharmaceuticals International
- Career Start: McKinsey & Company, 1985
Questions readers ask
Did Pearson lead Valeant through a merger?
Yes, in 2010 he led the merger between Valeant and Biovail, which moved the headquarters to Canada.
Why did Pearson sue Valeant in 2017?
He sought $31 million in compensation for alleged wrongful termination as CEO and chairman.
Achievements
- Educated at Duke University and University of Virginia
