Valeant Pharmaceuticals will pay $54 million in settlement of an investigation by the U.S. Attorney in New York into marketing practices for several drugs that were sold by Salix Pharmaceuticals, a company that Valeant bought last year for $11 billion. It was an inherited problem for Valeant. The agreement, reached last month, must still be finalized. The settlement was disclosed by Valeant in a filing with the U.S. Securities and Exchange Commission (SEC).
The drugs that were the focus of the investigation, which began in February 2013, are Xifaxan, Relistor and Apriso, which are used to treat various stomach disorders. It is not clear whether the investigation involved off-label marketing, which is promoting medicines for unapproved uses, or kickbacks that are made to induce doctors to write prescriptions.
The settlement is only one of several government investigations that Valeant must resolve. The U.S. Federal Trade Commission (FTC), the U.S. Department of Justice (DOJ), and several U.S. Attorneys are investigating acquisitions, patient assistance programs, a relationship with a mail-order pharmacy, accounting practices, and payments to physicians. Among them is an SEC investigation into Salix inventory disclosures.
Before Valeant acquired it, Salix imploded when senior management had to walk back statements about inventory levels that were much lower than previously indicated. The disclosure prompted a huge drop in Salix stock and some executives later left the company. The events set the stage for a sale.
It is widely known that Valeant pursued Salix in order to gain the Xifaxan medication. That drug is used to treat traveler’s diarrhea and irritable bowel syndrome. Regulators had approved this usage after Valeant bought the company. It was expected to become a lucrative market. However, the drug has failed to live up to its sales potential, according to analysts.
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.