Valeant Woos Influential Doctors In Anticipation Of A Takeover

November 13, 2014

By Mark Terry, BioSpace.com Breaking News Staff

As Quebec-based Valeant Pharmaceuticals and New York-based Pershing Square Capital Management continue to pursue their hostile takeover bid of Botox maker Allergan Inc. , the fight has been taken to the physician customers themselves. Valeant recently wined and dined 45 cosmetic surgeons and dermatologists at events held in Aspen, Colo., and Palm Beach, Fla., according to the Wall Street Journal.

Ostensibly the meetings were set up so Valeant could describe their business model to the physicians and share their plans to grow the cosmetic-medicine market, as well as to collect feedback from the doctors. To do so, however, they provided all the physicians with airfare, luxury hotel rooms and meals for two nights and consulting fees reportedly up to $30,000.

“It’s commonplace in the industry to get leading physicians together to help you understand the market and their business,” said Dan Spira, head of Valeant’s North American aesthetics business, to the Wall Street Journal.

For their consulting fees and presence, the physicians in return agreed to phone calls and follow-up meetings.

And Valeant is not alone in using these perks in their attempts to get the physicians on their side. According to Open Payments, a federal database that tracks what companies pay doctors and hospitals, Allergan forked out a total of $40.8 million in the last five months of 2013 for these types of activities, including advisory board meetings, which accounted for $24.2 million of the funds. In the same period Valeant coughed up $7.9 million.

The Centers for Medicare and Medicaid Services (CMS) breaks down those expenses into several categories, which include Royalty or License, Promotional Talks, Consulting and Training, Food & Travel, Grants & Education, and Research. In the case of Allergan, Promotional Talks account for 3 percent of the $41 million, Consulting & Training accounts for 17 percent, Food and Travel accounts for 11 percent, and Grants and Education accounts for 7 percent.

For Valeant, of an $8 million total, 33 percent accounts for Consulting and Training, 14 percent for Food & Travel and 1 percent for Grants & Education. The expenses were not limited to a focus on pushing or fending off the takeover bid, but were a portion of each company’s marketing efforts.

The PR battle for the hearts and minds of physician clients has extended to direct marketing communications by the companies as well, especially in light of a letter from eye surgeons recently posted on the Allergan website expression concern about Valeant’s proposed cost-cutting plans should it acquire Allergan.

The letter, in part, states, “The undersigned, who spend our lives working to bring patients the best possible treatments, are alarmed by Valeant Pharmaceuticals International, Inc.’s unsolicited proposal to acquire Allergan. Based on Valeant’s publicly disclosed targets, its acquisition of Allergan would greatly decrease funding for R&D and would thus negatively impact our practices and our ability to provide the highest quality care to our patients.”