November 03, 2015
A Montgomery County mail-order pharmacy announced it is shutting down amidst accusations that it used illegal tactics to fill more orders from a key client, Canadian drug company Valeant Pharmaceuticals.
"We remain steadfast that Philidor has adhered not only to all applicable laws but to the highest standards of ethical business practice," the company, Philidor Rx Services, wrote in a statement on Monday.
The Hatboro-based company's woes started two weeks ago when the stock commentary website Citron Research published a report titled, "Valeant -Could this be the pharmaceutical Enron?"
Citron alleged that Philidor owned "phantom accounts" used to send Valeant fraudulent invoices. Valeant said that claim is "completely untrue."
Adding another twist the complex saga, the Wall Street Journal reported that the author of the Citron article, Andrew Left, is himself facing scrutiny from regulators in Hong Kong who say he published untrue claims about a Chinese developer in 2012. WSJ also said that Citron's research is aimed at short-sellers, investors who profit when a company's stock value falls, which gives Citron a reason to look for bad news.
However, Left is not the only person to have raised questions about Valeant's relationship with Philidor.
A Bloomberg Business investigation accused Philidor of changing prescriptions from generic drugs to Valeant's more expensive brand-name drugs, in order to get more money from insurers. Valeant also admitted that it had paid $100 million in 2014 for the option to buy Philidor.
The Wall Street Journal also learned from former Philidor employees that some of their colleagues used false names like "Peter Parker" and (a.k.a. Spider-Man) on their email accounts, and were actually employees of Valeant.
Philidor said in a statement that is "working cooperatively with Valeant over the next 30 to 90 days to proactively assist patients in transferring their prescriptions to other pharmacies, ensuring continuity of care."
Even with Philidor shutting down, the controversy may cause regulators and investors to start scrutinizing any drug company that uses specialty, mail-order pharmacies more closely.
