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With the purchase of Paragon in May, Valeant now controls the vast majority of the permeable lens industry.Brian Snyder/Reuters

Largely ignored amid an onslaught of more existential crises, a U.S. regulator's investigation into Valeant Pharmaceuticals International Inc.'s dominance of a niche contact lens business has exposed yet another downside of the pharma giant's aggressive strategy of growth by acquisition.

In a recent regulatory filing, Quebec-based Valeant disclosed that it received a "voluntary request letter" from the Federal Trade Commission two weeks ago. The letter is related to the FTC's investigation into Valeant's purchase of Paragon Vision Sciences, an acquisition the company completed in May of this year.

Paragon is one of a small handful of firms that design a particular type of contact lens known as "gas permeable." The lens is used by people who, for reasons such as eye injury or unusual eye curvature, cannot use traditional soft contact lenses.

This isn't Valeant's first foray into the gas permeable lens market. In 2013, the company paid $8.7-billion (U.S.) to purchase Bausch & Lomb Inc., which makes the majority of the components in the permeable lens market. With the purchase of Paragon, Valeant now controls the vast majority of the niche industry – so much so, it appears, that the FTC is investigating whether that level of marketplace control falls foul of antitrust laws.

Through Bausch and Lomb, Valeant has also tried to buy many of the labs that turn raw components into finished lenses.

The acquisition spree has raised concerns in part because of Valeant's history of implementing significant price hikes on drugs and technologies it acquires. Prior to a report from a short-selling firm that highlighted the company's use of specialty pharmacies for allegedly dubious accounting purposes, it was Valeant's reputation for sudden price hikes that resulted in the most complaints from critics.

"The issue is the orthokeratology market," said Jan Svochak, president of the U.S.-based Contact Lens Manufacturers Association, referring to a subset of the gas permeable lens market. "Ortho-K" lenses, which help reshape a user's eyes when worn overnight, compete directly with laser eye surgery and are a fast-growing segment of the contact lens business – one over which Valeant now has almost total control.

"We believe they have a monopoly situation in that market," Mr. Svochak said. "They significantly raised prices in the orthokeratology market, and they've also taken control of distribution channels."

Like virtually all of Valeant's acquisitions – the company has made about $30-billion in purchases over the past five years – its burgeoning contact lens business is complex in nature. After buying Paragon, Valeant folded the company into Bausch & Lomb. That division, in turn, has also tried to purchase many of the labs that turn raw components into finished lenses. However, Bausch & Lomb is itself the subject of a separate investigation by the U.S. Department of Justice. That investigation centres on the company's payments to medical professionals in connection to two Bausch & Lomb products typically used during eye surgery.

"The government has indicated that the subpoena was issued in connection with its criminal investigation into possible violations of federal health care laws," Valeant said in a regulatory filing, adding that it is co-operating with the government's investigation.

Valeant responded to a request from The Globe and Mail for comment on the Paragon investigation with a one-sentence statement: "Our acquisition of Paragon Holdings supports our mission to improve consumers' lives by bringing to market innovative, specialty eye care solutions, and we are co-operating with the FTC on its inquiry."