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Valeant Class Action Lawsuit Overview:
- Who: Valeant Pharmaceuticals is settling a class action lawsuit filed by investors.
- Why: The investors alleged Valeant securities were artificially inflated due to the concealment of Valeant’s “unsustainable and deceptive” price gouging practices wherein Valeant acquired pre-existing drugs, some of them life-saving medicines, and then dramatically raised prices to boost short-term profitability.
- Where: The lawsuit was filed in federal court in New Jersey.
Valeant Pharmaceuticals has agreed to pay more than $23 million to end claims it secretly controlled a network of pharmacies, causing health insurance funds to pay out more than they should have.
On Thursday, heath funds — the plaintiffs in this class action lawsuit against Valeant — asked a New Jersey federal judge to approve their deal with the pharma company, mail-order pharmacy Philidor Rx Services LLC and Philidor’s ex-CEO Andrew Davenport.
The agreement settles claims the drug company violated the Racketeer Influenced and Corrupt Organizations Act with an alleged scheme that forced the funds — including the AirConditioning and Refrigeration Industry Health and Welfare Trust Fund and Detectives Endowment Association of New York City — to pay more for drugs they could have got generic versions of.
The funds had accused the company of commiting fraud with a conspiracy to dispense Valeant-branded medications through the Philidor network of pharmacies.
“Plaintiffs alleged that Philidor and its network pharmacies were secretly controlled by Valeant,” the proposed settlement reads.
“By concealing the relationships between Valeant, Philidor, and the other pharmacies, Defendants allegedly prevented (the funds) and their pharmacy benefit managers from realizing that numerous prescriptions for expensive Valeant drugs were all coming from pharmacies controlled directly or indirectly by Valeant.”
The plaintiffs alleged many of the Valeant drugs had less expensive generic equivalents or near equivalents, and if they had realized that the prescriptions were all coming from one Valeant-controlled pharmacy network, they would have refused to pay for the branded drugs and insisted on substitution of the less expensive generics or other substitutes.
The class action settlement comes after more than five years of litigation.
Earlier this year, Valeant reached a $1.2 billion settlement with investors who saw the company’s stock price plummet from more than $250 a share in 2015 to below $10 two years later.
The investors alleged that the securities were artificially inflated due to the concealment of Valeant’s “unsustainable and deceptive” price gouging practices wherein Valeant acquired pre-existing drugs, some of them life-saving medicines, and then dramatically raised prices to boost short-term profitability.
Meanwhile Valeant — now Canada-based Bausch Health Cos Inc. — is facing a proposed class action lawsuit in an Ontario court over claims that it falsely advertised a line of its natural health products.
What do you think of the company’s alleged practices? Let us know in the comments!
Plaintiffs are represented by James E. Cecchi of Carella Byrne Cecchi Olstein Brody & Agnello PC, Hannah Ross, James A. Harrod, Jai K. Chandrasekhar and James E. Fee of Bernstein Litowitz Berger & Grossmann LLP, Jeffrey W. Golan and Jeffrey A. Barrack of Barrack Rodos & Bacine, and Julie Goldsmith Reiser, S. Douglas Bunch, Christopher Lometti and Joel P. Laitman of Cohen Milstein Sellers & Toll PLLC.
The Valeant Class Action Lawsuit is AirConditioning and Refrigeration Industry Health and Welfare Trust Fund et al. v. Valeant Pharmaceuticals International Inc. et al., Case No. 3:16-cv-03087, in the U.S. District Court for the District of New Jersey.
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5 thoughts onPharma Company Agrees to Pay $23M to Settle Claims It Secretly Controlled Pharmacies
add me please
Add me
I’m sorry to say, this news does not shock me at all. Not one bit!
add me
You have to wait til there is a claim form to submit! Add me doesn’t get you added, a valid claim submission is what’s needed but there isn’t one for this suit yet