The U.S. Attorney’s office for the Southern District of New York is investigating allegations that Valeant Pharmaceuticals and a specialty pharmacy hid their relationship in order to defraud health insurance companies, according to a Wall Street Journal report.
Valeant issued a news release responding to the article and said it had been fully cooperating with authorities since the company publicly disclosed in October 2015 that federal prosecutors had opened an investigation. Valeant did not, however, confirm or deny the specifics of the Wall Street Journal article.
“We do not comment on rumors about investigations and cannot comment on or speculate about the possible course of any ongoing investigation,” Valeant wrote. “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.”
Valeant’s business practices have been questioned since last year when the company bought the rights to two heart drugs (Nitropress and Isuprel) and increased their list prices by 525 percent and 212 percent, respectively. In May, Valeant said it would reduce the prices of those drugs by as much as 40 percent.
According to the Wall Street Journal, federal prosecutors are investigating whether Philidor Rx Services, made false statements to insurance companies about its ties to Valeant. Valeant cut ties with Philidor in October 2015, and Philidor has ceased operations.
The newspaper reported that the investigation could lead to criminal charges against former Philidor executives and Valeant as a company.
On Aug. 9, Valeant announced that its revenue decreased 11 percent to $2.42 billion in the second quarter of 2016 compared with the same time period last year. The company also had a net loss of $302 million during the quarter.