Pharma Executives Charged With Fraud, Conspiracy In Multi-Million Dollar Scheme
The alleged strategy by Philidor Rx Services' Andrew Davenport and Valeant’s Gary Tanner hinged on an unusual relationship between the two companies.
The New York Times:
Former Valeant And Philidor Executives Charged In Kickback Scheme
A secret relationship had made the two men rich: one, the head of a mail-order pharmacy, the other, an executive at a major pharmaceutical company who had promised to funnel millions of dollars to his partner in exchange for receiving millions of his own.They celebrated over email like characters in a classic western movie — with one saying that they would soon “ride into the sunset” together. (Thomas and Goldstein, 11/17)
Feds Charge Former Valeant And Philidor Execs With Fraud
The executive who once ran the specialty pharmacy at the heart of the Valeant Pharmaceutical accounting scandal was arrested Thursday morning, along with a former Valeant executive, and charged with a multimillion-dollar fraud and kickback scheme. Andrew Davenport, an executive at Philidor Rx Services, and Valeant’s Gary Tanner allegedly conspired to use the specialty pharmacy, which was shepherding prescriptions for some Valeant drugs, as a way to enrich themselves, according to a complaint filed in federal court in New York. As a result of the scheme, prosecutors say, Tanner received about $10 million in kickbacks and he helped Davenport reaped more than $40 million and stood to pocket “potentially tens of millions of additional dollars” in milestone payments. (Silverman, 11/17)
The Wall Street Journal:
U.S. Attorney Charges Former Valeant, Philidor Executives, Alleging Fraud And Kickback Scheme
Valeant Pharmaceuticals International Inc. for a year has weathered a scandal over its relationship with a mail-order pharmacy that critics say helped it secure lofty prices for its drugs. Now prosecutors say they have uncovered another troubling connection between the two companies. They alleged Thursday that two men—one from each company—enriched each other through a multimillion-dollar fraud and kickback scheme by directing more business and money to the pharmacy, Philidor Rx Services LLC. (McNish, Steele and Matthews, 11/17)
In other pharmaceutical news —
How Much Longer Will Gilead Wait Before Buying Its Way Out Of The Doldrums?
For a once high-flying company that could do no wrong, Gilead Sciences has become an honest-to-goodness downer. For the fourth time this year, the biotech has encountered a clinical trial setback and Wall Street is growing increasingly impatient while Gilead management decides how to patch its product pipeline. Although its HIV franchise remains strong, the hepatitis C drugs that motored so much growth in recent years are not delivering as before. As a result, there is mounting pressure on the company to do deals. (Silverman, 11/17)