REPORT: Valeant is under criminal investigation
Federal investigators are considering bringing charges for defrauding investors with its relationship to specialty pharmacy Philidor, said the Journal citing unnamed sources familiar with the matter.
According to the report, US District Attorneys based in New York are considering whether Philidor unfairly directed patients towards higher-priced drugs made by Valeant instead of lower cost options without revealing the relationship between the two firms.
Investigators are looking into whether Philidor told insurers that they had no relationship with Valeant in order to secure coverage of the higher priced drugs.
Philidor, which no longer exists, stated in a letter to a US Senate Committee investigating Valeant that it did not push patients towards Valeant's products. Valeant paid $80 million in fees to Philidor in 2015 and the specialty pharmacy was dispensing more than 5o drugs made by Valeant, according to documents sent to the US Senate Committee.
Valeant disclosed in October 2015 that it had a relationship with Philidor, including an option to purchase the company. Eventually, Valeant severed ties with Philidor due to misstatements in its accounting.
According to the report, the US Attorney's Office is considering pressing charges related to mail and wire fraud. The Journal's sources said the office is considering charges against two former Philidor executives individually.
Valeant had previously said in filings that it was facing investigations in four different states including New York. The filing directly stated that New York investigators were looking into the Philidor relationship.
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