Valeant Pharmaceuticals is forming a committee to delve into the drug company’s relationship with the specialty pharmacy Philidor, which was the target of a scathing research report last week.
The board committee will be chaired by the Canadian company’s lead outside director, Robert Ingram.
Valeant disclosed last week during a conference call to discuss earnings that it had purchased an option late last year to buy Philidor.
The short-seller research firm Citron said in a report Wednesday that it appears Valeant and Philidor have created a network of phantom pharmacies to trick auditors. It also questioned why Valeant had not previously disclosed the Philidor acquisition option.
Valeant said Monday that its full board and an audit and risk committee found its accounting treatment of the Philidor relationship to be appropriate.
“However, other issues have been raised publicly about Philidor’s business practices, and it is appropriate that they be fully reviewed,” Chairman and CEO J. Michael Pearson said in a printed statement.
The company did not detail those issues in its statement. Later on Monday, 10 company executives will hold a conference call to address concerns about Philidor.
Valeant is already under congressional scrutiny over its drug prices.
The Laval, Quebec, company drew Congress’ interest following its purchase of the life-saving heart drugs Nitropress and Isuprel. The company jacked up prices on both drugs shortly after buying them from Marathon Pharmaceuticals in February, tripling one and raising the other sixfold.
Valeant recently revealed that federal prosecutors have subpoenaed documents tied to its drug pricing and other policies.
U.S.-traded shares of Valeant Pharmaceuticals International Inc. plunged 14 percent, or $16.36 to $99.80 in premarket trading.
Valeant’s stock hit an all-time high of $263.81 in August, but the price has been cut in half over the past three months.
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