Valeant Sold Some Drugs Twice
bloombergview.com
bloombergview.com
I'm hoping to see them burn all the way down so that everybody who invested in them, knowing full well that their whole business plan was shady as hell, loses all the money they invested. It seems we're already 80% the way there, at least.
The companies Valeant purchased did not have a gun to their head and I'm sure they were fairly compensated when purchased. Who cares what Valeant does after the acquisition?
Valeant's was able to overpay for these companies because it was betting that its shady practices would allow it to realize outsize gains for the IP acquired, and that's turning out to be a bad bet. So not only have they gutted numerous companies, disrupting the lives of many researchers and others, but they are also now under a mountain of debt and have a bunch of husks of companies that aren't worth near what they were paid for. It's lose/lose/lose. The only people who made out are the ones who original owned the companies Valeant bought.
Regardless, that business model has been proven to be a poor strategy. Good drugs come from R&D. Can you snap up a bunch of "ok" drugs and sell them through shady techniques? Sure, but it catches up with you eventually.
Take a look at their product line.[1] Jeeze. It's either branded medication that has no real use (since you can get products that are just as good for cheaper) or brand name drugs where the generic already exists. If either a doctor or insurance company was paying attention, none of those drugs would ever be used. Maybe I'm going overboard with that statement, but it's mostly true.
Valeant never was a pharmaceutical company, it was a sales and marketing company for a bunch of low quality drugs.
[1]http://www.valeant.com/operational-expertise/valeant-united-...
Isn't that basically what Google did with Motorola?
Who cares what Valeant does after the acquisition? People care. When Pfizer purchased King Pharmaceuticals (you've probably never heard of King, but they patented the Epi-Pen epinephrine auto-injector), they got rid of about 450 of 550 employees, keeping only a few compliance & research folks along with the sales team. When Valeant purchased Salix (patent holder for Xifaxin, which is one of Valeant's only winners right now), they laid off about 800 of 1100 staff (again, keeping primarily the sales team). Valeant used about $11b in debt + Valeant stock (no cash) to purchase Salix. The debt has been downgraded to junk status and the stock has lost 90% of its value. Tell me this was good for anyone (even the Valeant side!).
Valeant made the drug
Valeant sold the drug to Philidor
Valeant bought the drug when it bought Philidor
Valeant sold the drug again.
The best I can tell, the issue is only that Valeant knew it was going to buy Philidor when it sold Philidor those drugs.
I really don't see how this matters. Even the Author seems to admit that it doesn't matter and that the real issue here is how Valeant was allegedly using Philidor to trick insurance companies into paying more for drugs.
IMO, that makes the whole article title clickbait.
How is this not insurance fraud?
Is that right or am I not quite reading this correctly?
Just take a look at their portfolio of drugs. There is nothing special there. For the most part they were selling brand names drugs in diseases where a generic drug would work just fine. The only reason they made money is because they used every trick in the book to make sure nobody noticed what they were doing.
The company was bound to fail at some point in time.
What's the saying "the markets can stay irrational longer than you can stay solvent"?
I've played the biotech markets before and quickly realized I'm not cut out for them!
Its crazy. First prescription I got was through philidor and i never saw the cash price for the drug, after Philidor went under they partnered with Walgreens and thats where i saw the cash price for the drug.. holy crap.
Edit: clarity