Feds launch probe to explore if Valeant defrauded insurers

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"People familiar with the matter" told The Wall Street Journal Valeant Pharmaceuticals International faces a federal probe for potentially concealing an improper relationship with a mail order pharmacy.

According to the report, lawyers from the Manhattan-based U.S. attorneys office are investigating if Valeant hid its ties to Philidor Rx Services from insurers, a now-defunct mail-order pharmacy.

Valeant allegedly began working with the pharmacy a few years ago as a pilot project to expense a handful of its drugs, according to a letter to the Senate committee on aging from a Philidor lawyer. Philidor soon began to sell many more Valeant drugs, and the Philidor lawyer said Valeant North America was its only client, according to the report.

Valeant offered to buy Philidor for $100 million and milestone fees at the end of 2014, so the companies consolidated financial results. Valeant did not disclose this relationship until October 2015, according to the report.

The investigation has the potential to lead to criminal charges against Valeant and executives of Philidor.

Read the full report here.

 

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