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PHARMACEUTICAL EXECUTIVES FOUND GUILTY OF MONEY LAUNDERING

By Bryan

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Gary Tanner, former executive at Valeant Pharmaceuticals International Inc. and Andrew Davenport, former chief executive officer at Philidor Rx Services were found guilty of using a kickback scheme to defraud drugmakers along with wire fraud and conspiracy to launder money.

Investigation into Valeant and Philidor’s relationship started in October 2015, when it was discovered that Valeant was running a kickback scheme by acquiring Philidor in 2014 without telling investors, which allowed Valeant to push their expensive drugs through Philidor to increase sales and allow Valeant to dispense its expensive brand name drugs rather than cheaper, generic brands. Tanner also prevented Valeant from gaining potential deals with Philidor’s rival companies, despite the wishes of other Valeant executives. As a result, Davenport received $40 million in profits and Tanner received $10 million. The two men were able to keep the scheme a secret from their companies by transferring funds through shell companies and by communicating via email using fake names.

Both Tanner and Davenport claimed innocence and Howard M. Shapiro, Tanner’s representing lawyer, has stated their disappointment in the verdict and his plans to appeal in the future. Davenport’s lawyers were not able to comment, with Valeant releasing a statement that, “We believe the jury’s verdict reflects the facts of the case.” Tanner and Davenport are scheduled to be sentenced on September 19th, and are both facing up to 65 years in prison.

Although Valent is still facing an investigation into their drug-pricing policies, patient-assistance programs, and sales and marketing practices, Joseph C. Papa, Valeant’s new chief executive, is working to fix the company’s damaged reputation by changing the company’s name to Bausch Health Companies which is a nod to their partner, Bausch + Lomb.