If you are a Third-Party Payor and made payments or reimbursements for Valeant-branded drugs fulfilled through Philidor from January 2, 2013 through November 9, 2015, you may be eligible for payment from a class action settlement.
The Third-Party Payor claim form can be accessed here, under the documents tab on this web page.
On February 22, 2022, the Honorable Michael A. Shipp of the United States District Court for the District of New Jersey granted final approval of a $23 million settlement against Valeant Pharmaceuticals International Inc., as well as a $125,000 settlement against specialty pharmacy Philidor RX Services LLC, Andrew Davenport, the former chief executive of Philidor RX Services, and the Estate of Matthew Davenport, who allegedly held himself out as Philidor’s CEO in documents filed with the California State Board of Pharmacy, for their roles in an alleged illegal business scheme whereby Philidor, a specialty mail-order pharmacy, allowed Valeant to overcharge and wrongly charge third-party payors (“TPPs”) for prescription drugs in violation of the Racketeer Influenced and Corrupt Organizations Act and the New York Consumer Protection Act.
The Settlement was reached only after extensive litigation beginning in 2016, which included the filing of two consolidated complaints, the second of which was filed after the Court granted an eighteen-month stay in August 2017 during the pendency of a criminal trial against Defendant Andrew Davenport; motion practice regarding Defendant Davenport’s motion to stay; motion practice regarding the Court’s appointment of a Special Master; Plaintiffs’ successful opposition to Defendants’ second round of motions to dismiss, after the first round of motions to dismiss was mooted by the litigation stay; and extensive discovery, including review and analysis of more than 8.6 million pages of documents produced to Plaintiffs by Defendants and third parties, successful opposition of the Philidor Defendants’ motion to quash a document subpoena, participation in 39 depositions that were coordinated with the Valeant securities actions and required multiple two-day depositions. Plaintiffs’ counsel also worked extensively with an expert on damages.
In addition, the Settlement between Plaintiffs and Valeant was reached only after two mediation sessions before an experienced mediator from JAMS, which involved extensive arm’s length settlement negotiations between experienced counsel and extensive discussion between counsel for the parties regarding Plaintiffs’ damages model. This process culminated in the proposed $23 million cash settlement with Valeant. The Settlement between Plaintiffs and the Philidor Defendants was reached after arm’s-length negotiations between these parties’ experienced counsel, independent of the JAMS-facilitated process between Plaintiffs and Valeant.
Cohen Milstein represented New York Hotel Trades Council & Hotel Association of New York City, Inc. Health Benefits Fund (“NYHTC”), one of the named Plaintiffs
This civil RICO class action was first filed in May 2016 before the United States District Court for the District of New Jersey and arises from a fraudulent scheme perpetrated by Valeant, its top executives, and Andrew and Matthew S. Davenport, co-conspirators at Philidor, a specialty pharmacy, to use a secret network of captive pharmacies to shield Valeant drugs from competition, fraudulently inflate the prices of Valeant products, and artificially boost Valeant’s sales. Valeant and its secret network of pharmacies and shell corporations named after various chess strategies were created and controlled by the Defendants for the purpose of selling Valeant drugs (the “Valeant Enterprise”) and provided a platform through which Defendants implemented the aforementioned fraudulent practices. The Valeant Enterprise’s misconduct was so vast in execution that media and commentators have dubbed it the “Pharmaceutical Enron.”
The key to Valeant’s apparent success was the Company’s practice of massively raising the prices of drugs it obtained through its serial acquisitions. In 2015 alone, Valeant raised prices on its branded drugs an average of 66%, according to a Deutsche Bank analysis—approximately five times as much as its closest industry peers. Absent the scheme Defendants implemented through the Valeant Enterprise, Valeant’s bloated drug prices would have been unsustainable in the face of competition from these cheaper generic alternatives. Many state laws and many contracts entered into by and on behalf of TPPs, require substitution of generics for Valeant’s expensive brand-name drugs, unless precluded by the prescribing physician. However, Defendants provided customers with coupons and waived patient co-pays to discourage the use of available, cheaper generic alternatives and to steer customers to their more expensive branded drugs. The success of Defendants’ scheme hinged on its secrecy. Defendants issued a host of false and misleading statements to a number of constituencies, including TPPs, pharmacy benefit managers (“PBMs”), and state regulators, designed to conceal Valeant’s relationship with its captive pharmacies and its improper use of the secret pharmacy network to inflate drug prices and sales.
Shortly after Valeant’s relationship with Philidor was revealed, the three largest PBMs in the United States, CVS Health Corp., Express Scripts Holding Co., and UnitedHealth Group Inc.’s OptumRx, all announced that they were dropping Philidor from their networks. On October 30, 2015, after the disclosure of the Valeant-Philidor relationship and the existence of Valeant’s captive pharmacy network, Valeant announced that it had terminated its relationship with Philidor. Valeant also announced, in October 2015, that it had received a subpoena issued as part of a criminal investigation into possible violations of federal healthcare laws. In March 2016, Pearson, Valeant’s CEO during the Class Period, was forced to resign as a result of numerous government investigations, as well as investor and public scrutiny into Valeant’s misconduct.
- Consolidated Complaint - December 14, 2016
- Stipulation of Settlement - Philador - August 5, 2021
- Stipulation of Settlement - Valeant - August 5, 2021
- Order - Preliminary Approval of Settlement - Valeant - August 17, 2021
- Order - Preliminary Approval of Settlement - Philador - August 17, 2021
- Third-Party Payor Claim Form
- Opinion - Final Approval - February 22, 2022