Valeant Pharmaceuticals Could Face Criminal Charges

Federal prosecutors are investigating Valeant’s relationship with Philidor.

The federal government recently started a criminal investigation to determine whether Valeant Pharmaceuticals International Inc defrauded insurers.

It is alleged that the company defrauded insurers by hiding their close relationship with Philidor RX Services LLC, a mail-order-pharmacy, The Wall Street Journal reported. The US Attorney’s Office in Manhattan believes this relationship may have increased the pharmaceutical company’s sales.

If these allegations prove to be true, it could likely lead to criminal charges against Philidor executives and Valeant, according to the Journal. The investigation is likely be completed by year’s end.

Prosecutors are aiming to determine whether Philidor underplayed its relationship with Valeant. The pharmacy company, currently not operating, helped patients receive coverage for costly Valeant drugs over less costly alternatives.

They are also looking into rebates and other compensation given to patients who used Valeant drugs, and Phildor’s efforts to receive reimbursement from insurers. According to the Journal, Valeant did not disclose the company’s relationship with Philidor for years when questions arose.

Federal prosecutors are also investigating how much Valeant played in Philidor’s growth, since Philidor’s lawyer cited the pharmaceutical company as its only client.

However, Valeant states that they have been cooperating with the investigation.

“Valeant previously disclosed in October 2015 that the United States Attorney's Office for the Southern District of New York commenced an investigation involving Valeant. 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 for the Southern District of New York. We do not comment on rumors about investigations, and cannot comment on or speculate about the possible course of any ongoing investigation,” Valeant stated in a press release. “Valeant takes these matters seriously and intends to uphold the highest standards of ethical conduct as we move forward with our mission to improve people's lives with our healthcare products.”