The Federal Trade Commission has been investigating Valeant ($VRX) for potentially cornering a piece of the contact lens market--and now, the Canadian drugmaker is making moves to get out of the hot seat.
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| Valeant CEO J. Michael Pearson |
The Canadian drugmaker is reaching out to possible buyers for its specialty contact lens manufacturing unit, Paragon Vision Sciences, sources told Reuters. While the process won't necessarily culminate in a sale, if it does, Valeant will relinquish its complete monopoly on the Ortho-K lens, a myopia-treating product that's worn overnight. And as the news service reports, it's that Ortho-K market that the FTC's probe has centered on.
Since buying Paragon earlier this year, Valeant has also been hiking prices for the raw materials used in lens manufacturing, in some instances more than doubling them. Some labs have responded by moving their business to Valeant's competitors, Reuters notes.
But another move by the Quebec-based company--to split Paragon from Boston Products, its other specialty contact manufacturer--may be able to help at least one of the units patch up its relationships.
"The only way for them to (recover sales) would be to blame the other for being the culprit of the flawed strategy," an unnamed source told the news service.
Meanwhile, even if Valeant can placate the FTC, it'll still be dealing with plenty of scrutiny and price-hike pushback. Over the past few months, sizeable price increases on a pair of heart meds have landed the company at the center of government drug pricing probes, with lawmakers including Sen. Claire McCaskill (D-MO) pledging action. Valeant's also investigating a short-seller's claims that it used its relationship with specialty pharmacy Philidor to inflate its top line, and last month, a U.S. judge ordered the pharma to face an insider trading suit over last year's hostile pursuit of Allergan ($AGN).
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