Pharmacy reportedly falsified scrips

A specialty pharmacy based in Hatboro that fills prescriptions for Valeant Pharmaceuticals International Inc. has altered doctors' orders to wring more reimbursements out of insurers, according to former employees and an internal document.

Workers at the mail-order pharmacy, Philidor RX Services LLC, were given written instructions to change codes on prescriptions in some cases so it would appear that physicians required or patients desired Valeant's brand-name drugs - not less expensive generic versions - be dispensed, the former employees said.

Typically, pharmacists will sell a generic version if not precisely told to do otherwise by a "dispense as written" indication on a script. The more "dispense as written" orders, the more sales for the brand-name drugmaker.

An undated Philidor document obtained by Bloomberg provides a step-by-step guide on how to proceed when a prescription for Valeant dermatological creams and gels including Retin-A Micro and Vanos is rejected. Similar instructions for changing the DAW indication are supplied for patients who are paying in cash.

Ex-employees who worked at Philidor in the last two years, and who asked that their names not be used discussing their former employer, confirmed that prescriptions were altered as the document details. They said the intent was to fill more prescriptions with Valeant products instead of generics.

Ron Hutcheson, a spokesman for Philidor, said Thursday that "Philidor serves both patients and physicians by delivering the medications that physicians want their patients to have and which patients request. When questions arise, physicians and patients confirm their request for a branded drug."

Valeant didn't respond Thursday to a request for comment. Valeant recently said it paid $100 million late last year for an option to buy Philidor for nothing over the next 10 years.

Valeant also said it didn't have to declare its interest in Philidor: The specialty pharmacy network has accounted for about 6 percent of Valeant revenue this year, below the 10 percent sales threshold that would make the arrangement material under Generally Accepted Accounting Principles, according to the company.

The Valeant purchase-option agreement for Philidor was signed in December 2014. At the time, Philidor was "a small start-up" with net sales of $111 million, according to a Valeant presentation on an Oct. 26 conference call.

Before it came under scrutiny by prosecutors and investors, Valeant was one of the most popular health-care stocks on Wall Street. Now the drugmaker's relationship with Philidor and a network of affiliated pharmacies across the United States is at the heart of questions about its operations and practices. The company, based in Laval, Quebec, has lost almost $10 billion in market value since a Wall Street short-seller on Oct. 21 suggested it was using Philidor to artificially pump up retail sales and engage in Enron-style accounting tactics. Valeant has denied the allegations.

A specialty pharmacy such as Philidor typically fills prescriptions for medications that need special treatment, such as injections, infusions or cold storage. Often, these are high-cost drugs.

CVS Health Corp., the nation's largest drugstore chain, said Thursday that it would remove Philidor from its network of pharmacies after an audit of its practices.

"CVS Caremark maintains a broad national network of 68,000 pharmacies. In accordance with CVS/caremark's standard auditing protocols, over the last several weeks we have been monitoring and reviewing the results of recent audits of Philidor's practices.

"Based on the findings from those activities, we have terminated Philidor for noncompliance with the terms of its provider agreement," CVS said in an emailed statement.

According to a Philidor employee manual - another document obtained by Bloomberg - the Valeant products dispensed included dermatology medicines, including Jublia, a toenail fungus topical solution, and Solodyn, an acne drug sold in tablet form.

The manual instructed employees to submit claims under different pharmacy identification numbers if an insurer rejected Philidor's request for reimbursement - to essentially shop around for one that would be accepted.