Valeant `Withholding' Information on Pharmacy, Cummings Saysby
Valeant Pharmaceuticals International Inc. is “withholding” information on its relationship with a mail-order pharmacy, Philidor Rx Services, that a congressional committee has requested as part of its investigation into the drugmaker’s pricing methods, a U.S. lawmaker said.
“I am writing to request information that you have been withholding from Congress for several months about Valeant’s relationship with what has been characterized as a ‘phantom captive’ pharmacy,” Maryland Representative Elijah Cummings wrote Wednesday in a letter to Michael Pearson, Valeant’s chief executive officer.
Cummings, the ranking Democrat in the House Oversight and Government Reform Committee, said he had twice previously asked for transcribed interviews with current and former Valeant employees who reportedly helped run Philidor, according to the letter. The drugmaker will review the letter from Cummings and continue cooperating with the committee, spokeswoman Laurie Little said in an e-mail.
“Valeant has cooperated with the full committee’s review from the beginning, including providing over 78,000 pages of documents, testifying before the committee on Feb. 4, and working with the committee to accommodate all of its requests,” Little said.
Valeant shares gained 4.2 percent to $32.67 at 2:12 p.m. in New York.
The drugmaker has suffered multiple controversies and setbacks in recent months related to its business practices, accounting and drug pricing. Valeant executives have been asked by both the Senate and House to testify for a series of congressional probes into how pharmaceutical companies price medications. In March, the company said Pearson will step down once a replacement is found.
Valeant’s use of specialty pharmacy Philidor came under scrutiny after a short seller raised questions last year about whether the drugmaker was using the pharmacy to inflate sales. Valeant eventually revealed it had paid $100 million for an option to buy Philidor for nothing at any time during the next 10 years and consolidated Philidor’s financial results into its own. In February, Valeant said it would restate some results from 2014 and 2015 after a special ad hoc board committee reviewed its relationship with Philidor. The special committee said in April that it had found no additional accounting issues and wouldn’t require more restatements.
“We still know very little about the relationship between Valeant and Philidor,” Cummings wrote in the letter. He requested copies of documents related to the findings of the company’s ad hoc committee.