Matt Levine, Columnist

Valeant's Pharmacy Ties Get Even Murkier

Prosecutors think Valeant wasn't doing weird stuff. Weird stuff was being done to it.

November 17, 2016 at 9:13 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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A while back I wrote about the relationship between Valeant Pharmaceuticals International, Inc., and its specialty pharmacy business, Philidor Rx Services LLC. I drew a simplified diagram of that relationship:

It turns out that the relationship was much hazier than I thought. There should have been ... more squiggles? The squiggles should have come out of your computer screen and swerved around in three dimensions. They should have been red and pulsing. Today U.S. federal prosecutors brought criminal charges against former senior Valeant executive Gary Tanner and Philidor Chief Executive Officer Andrew Davenport, alleging that they built the Valeant/Philidor relationship, used it to enrich themselves, and concocted a whole mess of squiggles to conceal it from everyone else.1479404270029