Valeant Pharmaceuticals International Inc. is the subject of a criminal probe by federal prosecutors, who are investigating whether the drugmaker defrauded insurers by hiding its ties to a mail-order pharmacy, the Wall Street Journal reported Wednesday.
Prosecutors are pursuing an unusual legal theory that Valeant and its mail-order pharmacy, Philidor Rx Services LLC, allegedly defrauded insurers by hiding their close relationship, the Journal said, citing unidentified people familiar with the matter. Valeant said that it’s cooperating with the investigation without confirming details.
The drugmaker said in a statement Wednesday that it’s cooperating with the probe, which is being led by the U.S. Attorney’s Office for the Southern District of New York. It didn’t confirm details on the nature of the investigation.
“We have been fully cooperating with the authorities throughout the investigation, and we are in frequent contact and continue to cooperate with the U.S. Attorney’s Office,” the drugmaker said in the statement. “Valeant takes these matters seriously and intends to uphold the highest standards of ethical conduct.”
Prosecutors are looking into whether Philidor made false statements to insurers about its ties to Valeant, the Journal reported. Philidor, a now-defunct specialty pharmacy, filled prescriptions for Valeant dermatology drugs such as toenail fungus treatment Jublia. Prosecutors are investigating whether insurers thought Philidor was neutral rather than in the service of Valeant, the Journal reported.
Nicholas Biase, a spokesman for the U.S. Attorney’s Office in Manhattan, declined to comment.
Valeant shares plunged in late trading, falling 13 percent to $23.90 at 7:59 p.m. in New York. The loss erased much of the gains from Tuesday, when the drugmaker reported second-quarter results and said it would maintain its previous full-year financial forecast.
By: Caroline Chen (Bloomberg News).
Photo: Financial Post.
Review: Emerging Market Formulations & Research Unit, FLAGSHIP RECORDS.
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