What: Valeant Pharmaceuticals (NYSE:BHC) was down as much as 20% today although it battled back a little in late-morning trading.

So what: There doesn't seem to be anything materially new today to send shares lower. It appears that investors have just had enough and don't want to wait for the next shoe to drop.

Valeant Pharmaceuticals has had plenty of shoes hit the ground over the last month:

  • Presidential candidates and other complained about its tactics of raising drug prices.
  • The company said it would scale back its practice of buying companies and raising prices.
  • Short seller Citron Research claimed the company could be "creating invoices to deceive the auditors and book revenue" through its specialty pharmacy Philidor RX Services.
  • Citron Research kept on the pressure.
  • Bloomberg reported that employees at Philidor were changing prescriptions so that Valeant's branded drugs would get dispensed rather than generic versions.

Valeant Pharmaceuticals has done everything it can to fend off the attacks including ending its relationship with Phlidor, but it hasn't helped the stock price.

Yesterday, the Senate initiated a bipartisan investigation of drug price increases by Valeant Pharmaceuticals and other companies. The first hearing is scheduled to be held December 13, but the investigation will likely drag on for months.

Now what: Valeant sent out a statement to journalists today saying that the company's board stands behind CEO Mike Pearson. Firing Pearson won't make the problem go away, but using him as a scapegoat might give the company's stock a temporary pause in its freefall.

As I've been saying over and over again during the last month, at some point Valeant Pharmaceuticals will drop low enough that it's a buy, but without knowing all the details of what's happened and what else could come to light, it's difficult to determine where that value is.

Brian Orelli has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Valeant Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.