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 In a letter to healthcare professionals seen by Reuters, Chief
Executive Officer Michael Pearson said that Valeant would pay for
the cost of its products through Nov. 8 and make sure patients could
fill their prescriptions with no out-of-pocket expenses, wherever
possible. Patients on government-run health plans such as Medicare
are not eligible.
Pearson said that Valeant's former partner pharmacy, Hatboro,
Pennsylvania-based Philidor Rx Services, will file no further
insurance claims.
Philidor, which almost exclusively handled prescriptions for Valeant
medications, has been accused of improperly pressing insurers for
reimbursement for the drugs after they were dispensed to patients.
Valeant said on Friday it was cutting ties with Philidor,
effectively shutting down the pharmacy's operations, as Valeant
investigates whether Philidor engaged in any illegal activity.
"We know many doctors and patients were concerned about the recent
allegations surrounding Philidor’s business practices, and so were
we," Pearson said in the letter.
Valeant’s stock has plunged more than 40 percent since Oct. 21, when
a report by a short seller raised questions about Valeant’s
relationship with Philidor.
After its role in the transition plan is complete, Philidor will
wind down its operations and let go of its employees over the coming
weeks, according to a statement from Philidor.
"We remain steadfast that Philidor has adhered not only to all
applicable laws but to the highest standards of ethical business
practice,” the Philidor statement said.
As part of the transition plan outlined in Valeant's letter to
doctors, Valeant will continue to rely on Philidor to complete a
number of minor tasks, including providing an option for certain
patients to pay cash for drugs they would previously have claimed on
insurance, and contacting patients about refills, according to the
letter.
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Philidor will continue to dispense Valeant prescriptions for the
next week and may dispense some beyond that, according to Philidor's
statement.
“We plan to replace Philidor over the next few weeks with one or
more other specialty pharmacies to ensure continuity of this cash
pay program,” the letter said.
After Nov. 8, Valeant is developing a program that will be available
through major drugstore chains and independent pharmacies.
“Over the next few months, we will work to develop a new, more
comprehensive program to ensure your patients can continue to have
access to Valeant’s products at affordable prices,” the letter said.
“This decision will certainly have a near-term impact on Valeant's
revenues and profitability,” an RBC Capital Markets analyst said of
Valeant’s plan to cut off Philidor. “Having said this, we expect
that the company will maintain some portion of these sales as
Valeant will be able to transition a portion of this business to
traditional distribution channels.”
(Reporting by Carl O'Donnell and Caroline Humer; Editing by Michele
Gershberg and Bill Rigby)
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