Valeant is sued over Philidor ties, alleged racketeering
By Jonathan Stempel
Valeant Pharmaceuticals International Inc (VRX.TO: Quote)(VRX.N: Quote) was sued on Monday by buyers of its drugs, who accused the Canadian company of racketeering by forcing them to pay exorbitant prices.
The proposed class-action complaint was filed in the U.S. District Court in Manhattan on behalf of unionized New York City police detectives and hotel workers, regarding Valeant's ties to the now defunct specialty pharmacy Philidor RX Services LLC.
The plaintiffs accused Valeant of violating the U.S. Racketeer Influenced and Corrupt Organizations Act, and seeks compensatory and triple damages for U.S. health plans and others that bought its drugs from January 2013 to October 2015.
Valeant did not immediately respond to requests for comment.
U.S. prosecutors are probing whether Valeant defrauded insurers by shrouding its ties to Philidor, the Wall Street Journal reported on Aug. 10, citing people familiar with the matter.
Investigators are looking at the companies' disclosures to insurers, a person familiar with the matter has told Reuters.
According to Monday's complaint, Valeant steered patients and doctors away from generic equivalents and toward its branded drugs through a network of pharmacies linked to Philidor.
By hiding its ties to Philidor, the complaint said, Valeant created artificial demand that let it drive up prices, including by more than 800 percent for diabetes drug Glumetza. Continued...