UPDATE 3-Valeant under criminal investigation over Philidor ties -WSJ

Thu Aug 11, 2016 12:03am EDT
 
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(Adds details on Philidor ties)

By Greg Roumeliotis and Alexandria Sage

NEW YORK/SAN FRANCISCO Aug 10 (Reuters) - U.S. prosecutors have opened a criminal investigation into Valeant Pharmaceuticals International Inc over whether it hid from insurers its relationship with a specialty pharmacy that helped boost its drug sales, the Wall Street Journal reported on Wednesday.

Lawyers at the U.S. Attorney's Manhattan office are trying to gauge whether concealing those ties may have amounted to defrauding insurers, the Journal report said, citing people familiar with the matter.

A source familiar with the matter told Reuters later on Wednesday that investigators have been looking into what disclosures Valeant and the pharmacy, Philidor Rx Services, made to insurance companies about their relationship.

U.S.-listed shares of Valeant , which is headquartered in Canada, slid 12.5 percent to $23.90 in extended trading. The troubled company has seen its market value fall by some 90 percent in the last year as its drug pricing and other business practices prompted investigations by multiple U.S. government agencies and by Congress.

It first came under scrutiny from New York prosecutors last October over its drug pricing and distribution. Media also reported at the time that it used Philidor to overcome insurer rejections to reimbursing its medications, with Philidor resubmitting claims to insurers until they were approved.

Valeant said in a statement on Wednesday that it was continuing to cooperate with the U.S. Attorney's Office in New York regarding the investigation that was disclosed last October. The company did not provide further details on the subject of the probe.

"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," the company said.   Continued...