A jury in New York on Tuesday found a former executive of mail order pharmacy Philidor Rx Services and a former Valeant Pharmaceuticals executive guilty of defrauding the drugmaker in a multimillion-dollar scheme, for once putting the New Jersey drug company in the unusual role of a victim of dirty dealings.
Gary Tanner, a former senior director at Valeant, and Andrew Davenport, the former head of the now-defunct Philidor, were convicted of fraud and conspiracy, Reuters reported.
Attorneys for the men told Reuters they would appeal.
Valeant has often found itself defending its sales and pricing tactics to investigators and congressmen. In fact, the once-high-flying Valeant ran into scrutiny in the fall of 2015 after short seller Citron Research detailed the drugmaker's relationship to Philidor. But during the two-week-long trial, federal prosecutors painted Valeant as the victim of a fraud.
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They presented evidence showing that Valent’s Tanner passed inside information to Davenport to inflate Philidor’s business as the drugmaker's primary pharmacy partner. For his role, Davenport kicked back $9.7 million to Tanner when Valeant decided to buy Philidor. Davenport reaped $40 million for himself.
Philidor is now shut down and Valeant is working to move past its problems. Part of that effort involves changing its name in July to Bausch Health Companies, leaning on the goodwill of its Bausch & Lomb contact opticals business.