Valeant under criminal probe over Philidor Ties

Valeant Pharmaceuticals International Inc is the subject of a criminal probe by federal prosecutors, who are investigating whether the drugmaker defrauded insurers by hiding its ties to a mail-order pharmacy, the Wall Street Journal reported.

They are pursuing an unusual legal theory that Valeant and its mail-order pharmacy, Philidor Rx Services LLC, allegedly defrauded insurers by hiding their close relationship, the Journal said, citing unidentified people familiar with the matter.

Valeant said that it's cooperating with the investigation without confirming details. The drugmaker said in a statement on Wednesday that it's cooperating with the probe, which is being led by the US Attorney's Office for the Southern District of New York.

It didn't confirm details on the nature of the investigation. "We have been fully cooperating with the authorities throughout the investigation, and we are in frequent contact and continue to cooperate with the US Attorney's Office," the drugmaker said in the statement."Valeant takes these matters seriously and intends to uphold the highest standards of ethical conduct."

Prosecutors are looking into whether Philidor made false statements to insurers about its ties to Valeant, the Journal reported. Philidor, a now-defunct specialty pharmacy, filled prescriptions for Valeant dermatology drugs such as toenail fungus treatment Jublia. Prosecutors are probing whether insurers thought Philidor was neutral rather than in the service of Valeant, the Journal reported.