Newspaper article Charleston Gazette Mail

Valeant Cutting Ties with Philidor amid 'Phantom Pharmacy' Accusations

Newspaper article Charleston Gazette Mail

Valeant Cutting Ties with Philidor amid 'Phantom Pharmacy' Accusations

Article excerpt

NEW YORK - Valeant Pharmaceuticals, a company that has come under intense scrutiny for its drug prices, has cut ties with Philidor following accusations that it was a "phantom pharmacy used solely to artificially boost sales. Valeant said Friday that the mail-order pharmacy has informed the company that it will shut down as soon as possible.

The imminent end of Philidor comes just hours after the nation's two largest pharmacy benefit providers, CVS Health and Express Scripts, said that they had ended all interactions with the company citing its business practices. UnitedHealth Group conducted an audit of Philidor in late 2014 and began cutting ties with the company "in the interests of our customers.

Valeant Pharmaceuticals International Inc. is under fire for its practice of buying smaller drug developers and then hiking prices on the medicines developed by that company. At the same time, the company's profits have skyrocketed as it slashed spending on research into new drugs.

Valeant had become a Wall Street favorite and its shares hit a record high as recently as August.

Share prices have plunged almost 60 percent in the past three months, wiping away billions in market capitalization.

Federal prosecutors have subpoenaed documents tied to Valeant's drug pricing and other practices ahead of a presidential election in which the soaring price of prescription medicines has become a top political issue.

Valeant Chairman and CEO J. Michael Pearson said Friday that the latest allegations prompted a loss of confidence in Philidor's operations.

"We know the allegations have also led them to question Valeant and our integrity, and for that I take complete responsibility, Pearson said. "Operating honestly and ethically is our first priority, and you have my absolute commitment that we will make it right.

The company said it plans to fill any prescription lapses at its own expense to ensure patients' access to drugs.

Last week, short seller researcher firm Citron accused Valeant of using Philidor to create a network of "phantom pharmacies to steer pharmacy benefit managers toward Valeant's more expensive drugs, instead of lower-priced alternatives. …

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