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For the past few months, Valeant Pharmaceuticals has been investigated for jacking up drug prices to new heights. Now, the probes are expanding to another of its business practices.

Last night, the beleaguered Canadian drug maker disclosed that federal prosecutors in New York and Boston are eyeing its patient assistant programs, a sign that has investors worried the company’s fast-growth business model may face unexpected and significant pressure.

Prosecutors want details about “financial support” Valeant provides for patients, distribution of its medicines, and information given to the Centers for Medicare & Medicaid Services. Under federal law, a drug maker is not allowed to directly provide assistance to patients insured by Medicare because this is considered a kickback. So Valeant uses a foundation to funnel help.

In a statement, Valeant said it intends to cooperate with the investigations. The news sent Valeant stock plummeting this morning.

Last year, Valeant spent $544 million  on patient assistance, and expects to spend $630 million this year, according to a letter the drug maker sent yesterday to Claire McCaskill, a Democratic Senator from Missouri. After a hearing this summer, she later wrote Valeant, asking the drug maker to explain its price increases.

In its response to McCaskill, Valeant wrote that a consultant determined hospitals believed both heart drugs for which prices were raised remained valuable after earlier price hikes. One reason may be that hospitals complained there were few suitable alternatives. The drugs, Isuprel and Nitropress, are often used during emergency procedures.

The consultant found “there was considerable room to increase the price of both drugs without unduly depleting the funds available to the hospitals from payers” even after previous owners also raised the prices, according to the Valeant letter. The consultant also maintained that price hikes “should not reduce patient access.”

[UPDATE: McCaskill isn’t buying it. She issued this statement: “It appears obvious to me that Valeant has been anything but responsive or transparent—it refused to take any action until served with federal subpoenas, and is still refusing to provide answers to many of the questions I’ve asked. I look forward to continuing my investigation of drug pricing and plan to further explore Valeant’s inadequate response.”]

The disclosure comes after various members of Congress have begun looking into Valeant’s practice of buying medicines and drastically raising prices. The maneuver was detailed in our story  last spring that explained how Valeant bought the rights to a pair of life-saving heart medicines and, on the same day, the list prices rose by 525 percent and 212 percent, respectively.

The move further fueled a growing national debate over rising prescription drug prices. Over the past few years, public and private payers have complained that prices for some new medicines for hard-to-treat diseases, such as cancer and hepatitis C, could become budget busters. And even prices for some generic drugs have jumped, although the trend appears more recently to have abated.

Arguably, the Valeant model has prompted the most outrage. Although drug makers regularly raise prices and often do so after purchasing medicines from other companies, Valeant has pushed the proverbial envelope with some of its price hikes. As critics point out, the moves were not made because of costly new testing or a shift to more expensive manufacturing.

Of course, maximizing revenue is necessary and designed to reward shareholders. Toward that end, the drug maker has been on an acquisition spree, buying Salix Pharmaceuticals and Bausch + Lomb, among others, over the past two years.

But rather than invest in new drug development, Valeant often slashes R&D spending and relies on a combination of still more deals and price hikes to fuel growth. Recently, though, investors have questions whether Valeant can successfully continue this approach. Valeant stock has been dropping as a result.