Valeant wants the U.S. Securities and Exchange Commission to probe short-seller's accusations that it used a specialty pharmacy to inflate revenue. Fred Katayama reports.
Valeant on the defensive, and it's getting U.S. regulators in on it. The Canadian drug maker is asking the SEC to investigate allegations that it used its ties with a specialty pharmacy to inflate revenue. Those charges from short seller Citron Research hammered Valeant's stock last week. In a statement, Citron chief Andrew Left said, "Yellng fire in a crowded theater is a lot different than walking into a theater, smelling smoke and yelling, 'Hey everyone, there could be a fire.' ...they have chosen to leave .. maybe there is fire." Valeant says a board review found it had complied with the law. It's now setting up an ad-hoc committee to look into its relationship with the pharmacy, Philidor Rx Services. Philidor said it welcomes the appointment of the committee and will provide any information it needs. Valeant's link to Philidor came under scrutiny after a New York Times report said Valeant and other drugmakers were using specialty drug distributors to sidestep barriers to raise prices. Philidor itself has been accused by one of its affiliates of improper billing practices.