LAVAL - Valeant Pharmaceuticals says it's cutting all ties with Philidor Rx Services, a partner company at the centre of a controversy about how Canada's largest publicly traded drug company conducts its business.
Two major U.S. drug-benefit providers said Thursday they are in the process of severing ties with Philidor, meaning that patients will have more difficulty in being reimbursed for the cost of prescriptions processed through the specialty pharmacy.
Quebec-based Valeant says it will develop a plan to ensure minimal disruption to patients' access to drugs.
"Valeant has informed Philidor that to the extent that managed care plans will no longer reimburse prescriptions in process, Valeant will fill them at the company's expense," the Laval-based company said.
Valeant also said it has lost confidence in Philidor in light of recent allegations and is exploring relationships with other pharmacies to fill prescriptions for its drugs.
"Philidor has informed Valeant that it will shut down operations as soon as possible, consistent with applicable laws," Valeant said in a press release Friday.
Philidor couldn't immediately be reached for comment on Valeant's statement but on Monday it issued a statement saying that it was "proud of the company we have built and value our working relationship with Valeant."
"Philidor's relationship with Valeant has benefited countless patients by ensuring they receive their medication quickly and efficiently," the company said at that time.
It welcomed the creation of a Valeant board committee to investigate allegations raised by Citron Research, which said last week that Valeant set up a network of phantom pharmacies to fool auditors -- allegations that Valeant president and CEO J. Michael Pearson said are "completely untrue."
However, many questions remain unanswered and the controversy has sparked a huge decline in Valeant's stock, which is traded on the Toronto and New York stock exchanges. The stock closed at US$111.50 on Thursday in New York, after falling nearly five per cent in one day, and it was down again in pre-market trading Friday.
The stock closed in Toronto on Thursday at C$148.23, down from C$227.40 at the end of Oct. 16, before the controversy erupted.
The Associated Press reported Thursday that CVS Health Corp., the second-largest pharmacy benefit provider in the United States, has terminated its business with Philidor because Philidor didn't comply with terms of a provider agreement.
Philidor could not be immediately reached for response to that allegation, the AP story said.
As a result of that terminated agreement, patients with CVS pharmacy benefits will no longer be able to receive prescriptions filled by Philidor, CVS spokesman Mike DeAngelis said in an emailed statement.
Separately, a spokesman for industry leader Express Scripts told the AP that the company is "in the process" of removing Philidor from its network. St. Louis-based Express Scripts Holding Co. also said it is reviewing similar "captive pharmacy" situations, in which a pharmacy gets most of its business from one drugmaker.
Valeant said in its statement early Friday that it has lost confidence in Philidor, which accounted for 6.8 per cent of the company's total revenue in the third quarter ended Sept. 30.
