Valeant Pharmaceuticals $23M Class Action Settlement Over Allegedly Controlling Pharmacies
Valeant Pharmaceuticals has promised to pay more than $23 million to resolve charges that it covertly operated a network of pharmacies, resulting in overpayments to health insurance funds.
Valeant Settlement, 2021
On Thursday, health funds — the plaintiffs comprising this class action lawsuit over Valeant — petitioned a federal judge in New Jersey to approve their arrangement with Valeant, mail-order pharmacy Philidor Rx Services LLC, and ex-CEO Andrew Davenport of Philidor.
The settlement resolves allegations that the drug company violated the Racketeer Influenced and Corrupt Organizations Act through an alleged scheme that forced funds — including the Air Conditioning and Refrigeration Industry Health and Welfare Trust Fund and the Detectives Endowment Association of New York City — to pay more for drugs that were available generically.
The funds had charged the company of fraud in connection with a scheme to distribute Valeant-branded pharmaceuticals through the Philidor pharmacy network.
Plaintiffs argued that Valeant secretly controlled Philidor and its network pharmacies, according to the proposed settlement.
By covering up the connections between Valeant, Philidor, as well as the other pharmacies, Defendants reportedly avoided (the funds) and their pharmacy benefit managers from discovering that numerous prescriptions for expensive Valeant drugs were coming from pharmacies controlled by Valeant directly or indirectly.
The plaintiffs contended that many of Valeant’s drugs had less expensive generic equivalents or near-equivalents. Had they known the prescriptions were coming from a single Valeant-controlled pharmacy network, they might have refused to spend on branded medicines and insisted on generics or other alternatives.
Following years of litigation, the class action settlement was reached.
Valeant agreed to a $1.2 billion settlement with investors earlier this year after the company’s stock price plummeted from more than $250 in 2015 to less than $10 two years later.
The investors contended that the securities were artificially inflated as a result of Valeant’s concealment of its “unsustainable and deceptive” price gouging practices, in which Valeant acquired pre-existing drugs, some of which were life-saving, and then dramatically increased their prices to increase short-term profitability.
Editor’s Note on Valeant Settlement 2021:
This article is written to inform you of the latest class action settlement against Valeant Pharmaceuticals over the control of other pharmaceutical companies. Just like this, Pfizer agreed to the Epipen Settlement over antitrust lawsuit.
Case Name & No.: AirConditioning and Refrigeration Industry Health and Welfare Trust Fund et al. v. Valeant Pharmaceuticals International Inc. et al., Case No. 3:16-cv-03087
Jurisdiction: U.S. District Court – District of New Jersey
Products/Services: Medicinal drugs prices
Allegations: Valeant allegedly controlled other pharmacies to offer its expensive drugs
What are your thoughts on the company’s alleged business practices? Click the “Contact Us” button below and share it with us!