Rep. Elijah Cummings says Valeant Pharma has withheld information from Congress, saying that they still knows little about Philidor relations and that he wants information by April 26, 2016.
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Here is Cummings's letter to J. Michael Pearson, chairman and chief executive officer of Valeant Pharmaceuticals:
"I am writing to request information that you have been withholding from Congress for several months about Valeant's relationship with what has been characterized as a "phantom captive" pharmacy known as Philidor Rx Services, LLC.
"Your refusal to cooperate fully with Congress is extremely troubling and reflects a pattern of obstruction that impairs our ability to protect the American people against your company's exorbitant price increases.
"According to press reports, Valeant employees were directly involved in Philidor's dayto-day operations beginning in 2013. Two of your former employees reported being directed to alter prescriptions so that Valeant products—rather than more affordable generic alternatives— would be dispensed.
"These and other Philidor employees also reportedly were directed to resubmit rejected insurance claims with different prices and pharmacy identification numbers to maximize reimbursements.
"Valeant employees appear to have used fictitious email identities in their communications with Philidor employees to conceal their connections to Valeant.
"These reports appear to be inconsistent with the claim made in a presentation accompanying an October 26, 2015, investor conference call that Philidor "operates independently" from Valeant.
"You did not disclose Valeant's relationship with Philidor until October 19, 2015, despite the fact that your company had purchased an option for $ 100 million in 2014 to acquire Philidor for $0 for up to ten years.
"After press reports raised questions about Philidor's business practices, Valeant terminated its relationship with the company in October 2015.
"On November 16, 2015, I wrote to you requesting transcribed interviews with several current and former Valeant employees who reportedly helped run Philidor' s business operations, including its questionable billing practices.
"On December 15, 2015, I wrote to you again, requesting documents and information concerning Valeant's relationship with Philidor and your decision to withhold information from your shareholders.
"To date, you have failed to produce a single document in response to these requests or make a single Valeant employee available for an interview.
"On October 26, 2015, Valeant announced that it had formed an ad hoc committee of the
"Board of Directors to "review allegations related to the company's business relationship with Philidor." On February 22, 2016, your company announced that the ad hoc committee's
"On March 21, 2016, Valeant announced that you would be resigning your position as Chief Executive Officer.
"Valeant also announced that it would be restating certain financial statements filed in 2014 and 2015, and would delay filing its Form 10-K annual report with the Securities and Exchange Commission.
"Valeant also placed responsibility on your former Chief Financial Officer, Howard Schiller, who was asked to resign his seat on the Board of Directors, and your former Corporate Controller, Tanya Carro.
"Valeant stated:
"The company has determined that the tone at the top of the organization and the performance-based environment at the company, where challenging targets were set and achieving those targets was a key performance expectation, may have been contributing factors resulting in the company's improper revenue recognition.
"On April 5, 2016, Valeant announced that the ad hoc committee had completed its review and had "not identified any additional items that would require restatements beyond those required by matters previously disclosed.
"Valeant failed to release any findings relating to allegations of improper ties with Philidor. As a result, we still know very little about the relationship between Valeant and Philidor.
"The ad hoc committee's failure to report on these claims is troubling, particularly given that this alleged misconduct occurred at the same time Valeant was improperly recognizing revenue from Philidor.
"Now that the ad hoc committee has completed its review, I request copies of all documents memorializing or communicating the ad hoc committee's findings, including but not limited to presentations to the board, memoranda, a list of all current and former employees who were interviewed, notes of those interviews, and all documents collected during the course of the ad hoc committee's investigation.
"I also renew my request for all documents and interviews requested previously in my letters of November 16, 2015, and December 15, 2015.
"I request that you respond to this request by April 26, 2016." ■