|Valeant CEO J. Michael Pearson|
Last week, when Valeant ($VRX) cut ties with specialty pharmacy Philidor, it said it would make sure patients' access to drugs saw as little disruption as possible. And now, it's rolling out its plan to achieve that.
Prescriptions submitted to Philidor through Nov. 8 will be filled at no cost to patients who have commercial insurance--whether that insurance covers the drugs or not, CEO J. Michael Pearson said on Monday in a letter to doctors. Valeant itself will pay for the cost of its products through that date, as Philidor shuts down its insurance claims.
After that? The Canadian pharma is still working out the details, but it's developing a program that will be "available through major pharmacy chains as well as independent pharmacies," it said. That program will include zero-dollar copays for commercially insured patients.
During the transition, Valeant will offer a $35 cash pay option for its promoted dermatology products through Philidor, it said--and over the next few weeks, it will swap out the controversial pharmacy with one or more other specialty players.
Valeant's Philidor relationship first came under the microscope last month, when short seller Citron Research accused the drugmaker of using a network of specialty pharmacies to create "phantom sales." Valeant denied the claims and set up a board committee to investigate them. But after media reports of suspect business practices--Philidor instructed its employees to change prescription codes to boost Valeant's branded meds over cheaper generics, Bloomberg said, and The Wall Street Journal reported that Valeant employees placed at Philidor used fake names in email communications--it took things a step further, severing its connection to the Pennsylvania-based pharmacy.
Of course, Valeant may still face scrutiny after it replaces Philidor, depending on its new setup. The pharmacy benefits manager Express Scripts ($ESRX), for one, has said it's evaluating all pharmacies that derive the vast majority of their prescription volume from one manufacturer or one product.
And Valeant is still facing plenty of heat from elsewhere. Its stock price is still in the doldrums on pricing scrutiny from politicians--one of whom, Senator Claire McCaskill (D-MO), recently said she'd been conducting her own investigation into Citron's allegations. Valeant has also received a trio of subpoenas over the last couple of months.
On the bright side, though, Citron itself is laying off. On Monday, the firm said it wouldn't be releasing a new set of allegations against the pharma, instead focusing on "the vast spectrum of claims now piling up."
"The focus of the story should be on Valeant," Citron's Andrew Left told CNBC. "This story has a life of its own."
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