Embattled drugmaker Valeant Pharmaceuticals International Inc. offered tens of millions of dollars in incentives to a pharmacy to sell its products even as the relationship between the two was kept private, according to documents released by a Senate committee.
The 818 pages of documents, part of a trove reviewed by the Senate Special Committee on Aging before an April 27 hearing, provide new insights into a relationship that was at the heart of Valeant’s eventual share meltdown — the drug maker’s financial arrangements with Philidor Rx Services, a nominally independent pharmacy that has since ceased operations.
The documents also reveal a behind-the-scenes effort by billionaire investor Bill Ackman, one of Valeant’s chief backers, to win support for Valeant from an early critic inside Warren Buffett’s Berkshire Hathaway Inc.
In April 2015, Ackman wrote to Buffett seeking to arrange a meeting between Valeant Chief Executive Officer Michael Pearson, Buffett and Berkshire Hathaway Vice Chairman Charlie Munger, according to e-mails submitted to Congress. The appeal came shortly after Munger had publicly disparaged the drugmaker over its serial acquisitions.
Buffett demurred. “I don’t want to get into the picture myself on this,” according to an e-mail sent from the account of a Buffett assistant. “Charlie always makes up his own mind, as I’m sure you’ve noticed. It won’t be easy to change. Best, Warren.”
Ackman declined to comment for this article. Berkshire Hathaway representatives didn’t respond to a request for comment.
Valeant, based in Laval, Quebec, has come under scrutiny in the past seven months over its business practices, including its relationship with Philidor. Its stock has dropped about 89 percent from its highs last August. Now, even as the company has brought in a new chief executive officer and refreshed its board, lawmakers and government agencies are digging into its past practices.
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