Express Scripts looks into pharmacies at AbbVie, Teva in wake of Valeant's Philidor saga

Valeant ($VRX) may be through with specialty pharmacy Philidor, which CVS ($CVS) and Express Scripts ($ESRX) dropped from their networks last week on questions about its business practices. But other companies still maintain relationships with specialty pharmacies, and Express Scripts now says it's reviewing those, too.

Express Scripts' chief medical officer Steve Miller

The PBM giant is taking a closer look at captive pharmacies--or those that derive most of their prescription volume from one drugmaker or one therapy, spokesman Brian Henry told Reuters on Friday. That includes those run by AbbVie ($ABBV) and Teva ($TEVA). And in the meantime, it'll be working to identify others, he said.

Specialty pharmacies--which deal with insurers and link patients to programs through which manufacturers can cover their out-of-pocket costs--came into the spotlight last month, when short-seller Citron Research accused Valeant of using its relationships with them--most notably Philidor--to inflate its top line with "phantom sales." Valeant has denied the allegations and has an ad hoc committee looking into the matter, but since Citron made its claims, reports have raised more questions about Philidor's business practices, prompting Valeant to cut all ties with the company last Friday.

All the hullabaloo has put a major dent in Valeant's share price, but on that front, Bernstein analyst Ronny Gal thinks Teva, whose Shared Solutions program helps multiple sclerosis sufferers access star drug Copaxone--and AbbVie, whose Pharmacy Solutions program helps patients and doctors verify insurance coverage for products like Humira--need not worry.

While Teva's pharmacy, for one, sends patients a "starter package" on Copaxone, after that, they shift fulfillment to payers' own pharmacies--such as Express Scripts' own Accredo. "We can't see (Express Scripts) finding too much fault with that practice," he wrote in a Monday note to clients, adding that the scrutiny is more of a "potential risk for pharmacies selling non-biologicals," particularly in dermatology.

Meanwhile, Valeant is continuing its investigation in the wake of its Philidor dealings. On Friday, it appointed former Deputy Attorney General Mark Filip to advise its probe committee--all four members of which hold an equity stake in the company.

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