Another Black Eye For Valeant, But Salix Is The Culprit
Long before Valeant Pharmaceuticals International Inc. acquired North Carolina-based Salix Pharmaceuticals Ltd. in 2015, the latter firm was engaging in illegal kickback activities, for which its parent company is now left holding the bag in paying out $54m to settle the charges – another black eye for the Canadian firm's reputation.
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Big pharma has been big news recently, with politicians and the general public wading into industry debates on drug pricing, profit-making and trial transparency under the gleeful eye of the international press. Unsurprisingly, pharma has come out on the losing side of these debates, its scientific accomplishments forced into the shadows by the actions of executives such as Martin Shkreli, who have ensured that the spotlight is firmly on the people behind the businesses rather than the products they manufacture.
More than 800 pages of documents released by the Senate Aging Committee revealed often intense emails last fall from activist shareholder Bill Ackman to Valeant Pharmaceuticals International Inc. warning it was on the "brink of catastrophe" and needed to fess up about its relationship with Philidor Rx Services Inc.
Outgoing Valeant Pharmaceuticals International Inc.'s CEO Michael Pearson and board member Bill Ackman expressed regret during an April 27 Senate hearing about the price hikes of some of the Canadian firm's drugs and pledged change at the embattled company. Meanwhile, the company in a late-day securities filing disclosed it planned to pay incoming CEO Joseph Papa more than $67m in cash, restricted stock and options, which shocked and angered the Senate committee leaders.