One company, in particular, has stolen the spotlight from Turin. While the Internet remains angry at Shkreli, the Canadian pharmaceutical company Valeant has become increasingly salient. The company, which Skhreli ironically attempted to hedge with Allergan, has decreased approximately 40% in value (before slightly bouncing back) after a Citron Research report was released accusing the firm of fraud.
The company is under fire due to its controversial relationship with the special pharmacy Philidor Rx Services. Although it technically has no ownership or official affiliation with Philidor, it did purchase a one hundred million dollar option to buy Philidor for nothing sometime over the next ten years. This essentially, accomplishes the same as before. Valeant also has a similar option to buy Isolani, a company that controls the special pharmacy, R&O Pharmacy. Most of Philidor's sales are drugs made by Valeant (who consolidates it's financial figures) and Valeant has the right to improve prominent roles at Philidor.
If this doesn't seem suspicious enough, it is now being reported that Valeant employees used fake names and email addresses to interact and work in Philidor offices. The employees were present to use Valeant's ties to the special pharmacy in order to encourage medical professionals to use the drug. By using the special pharmacy as a proxy, Valeant was able to bypass insurers who opposed using their highly priced drugs and get them straight to the patient. Although the use of special pharmacies is legal, the lack of disclosure is sure to bring about legal action.
Valeant's actions go a step further than those of Turin. Although price gouging is legal, information against Valeant is beginning to build up and point to fraud Philidor is being used to manipulate the pricing system. Instead of contributing to research and development, Valeant simply buys up a portfolio of drugs and grows through acquisition. It then spikes up prices and uses alternative pathways, like special pharmacies, to bypass insurers who would not normally agree to pay for drugs. In this way, Valeant is able to adjust pricing without worry. Worst of all, the company is able to continue growing without actually contributing to the advancement of pharmaceuticals and biotechnology.
There is no doubt the firm is on the decline. With the value of its shares declining and its credibility slipping away, the company will have to make immediate changes if it wishes to stay afloat. And while the public managed to expose these practices, there are still two things to worry about: the fact that these practices could potentially be legal (with the proper disclosure) and the fact that other firms out there may be pursuing similar practices.