Morning Briefing
Summaries of health policy coverage from major news organizations
Former Executives At Valeant And A Mail-Order Pharmacy Firm Sentenced To Prison
A former executive at Valeant Pharmaceuticals International Inc. was sentenced Tuesday to spend a year in prison after being found guilty of defrauding the pharmaceutical giant through a multimillion-dollar kickback scheme. Gary Tanner, and his co-defendant, Andrew Davenport, the former chief executive of specialty mail-order pharmacy Philidor Rx Services, were both sentenced to one year and a day in prison. ... The sentence from Senior U.S. District Judge Loretta Preska, who also presided over the defendants鈥� trial, also called for two years of supervised release and for the men to forfeit about $9.7 million each. (Thomas, 10/30)
The sentencing comes three years after the drug maker became enmeshed in scandals over its pricing and accounting practices, which led to congressional hearings, a loss of confidence among investors, and a subsequent turnover in management and the board. The Philidor episode was particularly explosive, though, because Valeant failed to properly disclose its relationship with the pharmacy. (Silverman, 10/30)
Tanner had managed Valeant鈥檚 relationship with Philidor as well as Valeant鈥檚 鈥渁lternative fulfillment鈥� program, through which the drugmaker sought to increase prescriptions for its own drugs instead of cheaper generic substitutes. Prosecutors accused Tanner of steering Valeant business to Philidor, while concealing a $9.7 million kickback from Davenport that came from the roughly $50 million Davenport received when Valeant acquired the option to buy his company. (Stempel, 10/30)
In other news -
Three former Genentech employees were arrested for allegedly stealing trade secrets and funneling the confidential information to a company in Taiwan, marking the latest episode in which a drug maker in the U.S. has purportedly encountered sensitive data being shipped overseas. In this instance, a former principal scientist named Xanthe Lam, who worked for Genentech from 1986 through 2017, helped to siphon information about four drugs 鈥� the Avastin, Rituxan, and Herceptin cancer treatments, as well as the Pulmozyme cystic fibrosis medication 鈥� to JHL Biotech, which was founded by former Genentech employees to develop biosimilars, according to court documents. (Silverman, 10/30)