valeant

Hard times continue for Valeant as ex-CEO investigated for fraud

pharmafile | November 1, 2016 | News story | Manufacturing and Production CEO, Valeant, Valeant Pharmaceuticals, accounting, fraud 

Valeant Pharmaceuticals continues to have a tough time after Bloomsberg broke the story of how former CEO J. Michael Pearson and CFO Howard Schiller are being investigated before potentially facing criminal charges for accounting fraud.

Valeant Pharmaceutical have had a difficult time of late, with numerous changes at the top level of management and, with the backlash over Mylan and the price hiking scandal, Valeant has found its name dragged into the debate on drug pricing. Valeant has become synonymous with price hiking, after gaining a reputation for aggressive price hiking and this further scandal is likely to do much good to their name.

The investigation is looking into Valeant’s affairs with Philidor Rx Services, a speciality pharmacy channel, which was consolidated by Valeant in late 2014. Valeant only released the details of their relationship to Philidor with shareholders in October 2015. It was later revealed that Philidor improperly booked $58 million in accounting revenues at the unit.

The controversy over this particular deal rumbles on and Bloomsberg reports that a fraud case is being built that could potentially lead to charges within weeks. Whatever the resolution, Valeant’s shares have taken a hit and have dropped more than 12% to $17.84. Valeant plan to release a report of their earnings on 8 November, coinciding with the presidential elections.

Valeant reacted to the news by releasing a statement.

“As Valeant previously stated in response to a prior, similar press report, the Company previously disclosed in October 2015 that the United States Attorney’s Office for the Southern District of New York commenced an investigation involving Valeant. We have been fully cooperating with the authorities throughout the investigation, and we are in frequent contact and continue to cooperate with the U.S. Attorney’s Office for the Southern District of New York.  We do not comment on rumors about investigations, and cannot comment on or speculate about the possible course of any ongoing investigation.”

The press release continued, “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.”

Ben Hargreaves

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