Valeant, a huge drug manufacturing company has recently been accused of using a pharmacy/Rx company named Philidor. Philidor is used across the globe, and is a popular way for physicians, hospitals, and patients to receive their medications through mail order. As a result of the recent accusations, three of the major pharmaceutical dispensary managers Express Scripts, CVS Health, and Optum Rx have disclosed that they will no longer pay for drugs dispensed by Philidor, which accounted for an alarming 6.8% of Valeant’s total revenue in the third quarter. In the following two weeks after the accusations aired, Valient’s share price dropped 32%, and dropped another 7% when they released a statement notifying investors that they were cutting their ties with Philidor.
The important takeaway from the articles surfacing about these allegations, is the alarmingly low standard of ethics displayed in the pharmaceutical and health industry. In a recent BBC article, Chief Executive Michael Pearson released a statement saying “The newest allegations about activities at Philidor raise additional questions about the company’s business practices.” (Valeant cuts ties with “phantom” pharmacy Philidor, BBC). Incidents like this continue to come up, raising many questions for heads of companies in the pharma industry, inquiring as to what exactly their responses will be. Cutting ties is a step in the right direction, but it will not be enough in the long run. Customers and other stakeholders are starting to demand better business practices, and a higher standard of ethics in the cultures of these companies.