Valeant severs ties with Philidor following share price plunge
Valeant Pharmaceuticals is “severing all ties” with Philidor, a pharmacy group controlled by the drugs giant.
The Canadian company's share price closed over five per cent lower yesterday after two major US healthcare companies put an end to doing business with Philidor. Shares in Valeant continued their fall, diving as much as 15 per cent in after-hours trading.
Express Scripts and CVS Caremark said they were terminating contracts with Philidor on the grounds it had not behaved in accordance with the terms of its business agreements.
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Valeant's struggle with Philidor has been going on for some weeks, since the pharmacy group was accused of avoiding some systems put in place to control medicine prices.
“The newest allegations about activities at Philidor raise additional questions about the company's business practices,” J. Michael Pearson, chief executive of Valeant, said in a statement this morning.
We have lost confidence in Philidor's ability to continue to operate in a manner that is acceptable to Valeant and the patients and doctors we serve.
We understand that patients, doctors and business partners have been disturbed by the reports of improper behavior at Philidor, just as we have been.
Valeant also confirmed Philidor had agreed to close all its operations “as soon as possible, consistent with applicable laws”.
Valeant has experienced a challenging few months as a result of its over-reliance on rapid drug price increases and forceful sales methods.