February 2, 2016
By Mark Terry, BioSpace.com Breaking News Staff
A Vancouver, Canada attorney, John Green, has filed class action lawsuits against Laval, Quebec-based Valeant Pharmaceuticals International . The lawsuits, which were filed in British Columbia in 2012, and another in Saskatchewan, allege that the company’s popular Cold-FX medication for cold and flu is no better than a placebo in treating symptoms.
The lawsuit cites a 2004 study conducted by Gerry Predy, who is currently Alberta, Canada’s senior medical officer of health. That study apparently found that Cold-FX failed to treat cold and flu symptoms, although it did appear to act as a preventative if taken as a daily supplement for two or more months.
In Canada, pharmaceutical companies are not required to publish trial results. A report was filed with Health Canada, but the government can’t publicly publish that information.
“A big pharmaceutical company sells a product that claims it does something when it doesn’t,” Green said in an interview with Global News. “That’s what this case is about. The research just doesn’t support what they say the product does.”
The medicine was developed by Afexa Life Sciences, which sold the drug to Valeant in 2011. The only medicinal ingredient in Cold-FX is Panax quinquefolius, better known as American ginseng.
For his part, Predy says he does not remember if the study results had been rejected by a scientific journal or if Afexa didn’t submit it because “it was not likely to be published given the results.”
Although it’s a little difficult to determine if Valeant is tied up in more lawsuits and investigations than other drug companies its size, it has definitely been the focus of some very high-profile bad press over the last two years. In October 2014, the U.S. Food and Drug Administration (FDA) gave the company a Warning Letter concerning its Bridgewater, NJ facility regarding the company’s management of manufacturer contracts regarding specific Good Manufacturing Practice (GMP) activities.
Earlier in 2014, the U.S. Security and Exchange Commission (SEC) investigated Valeant and Bill Ackman’s New York hedge fund, Pershing Square Capital Management, over potential insider trading regarding a hostile takeover bid of Allergan Inc. .
The U.S. Federal Trade Commission (FTC) is also investigated one of Valeant’s companies, Paragon Vision Sciences, as part of an anti-trust probe. On Oct. 21, the company’s stock plunged and trading was temporarily halted after Citron Research published a negative research note comparing the company to Enron and accused it of “channel stuffing.” Channel stuffing refers to using specialty mail-order pharmacies that Valeant controls, and then using it to prop up sales of high-priced drugs, forcing patients and insurance companies from shifting to generics.
In late September 2015, Mike Pearson, Valeant’s chief executive officer, sent a letter to employees explaining the company’s strategy in light of the stock drop. The company, in April, bought two cardiac drugs, Nitropress and Isupress, when it acquired Salix Pharmaceuticals . It then increased the prices of those drugs by 212 percent and 525 percent, respectively. This was before the public debacle over Turing Pharmaceuticals AG, which had acquired the rights to the parasite drug Daraprim, and increased the price by 5,000 percent.
And yesterday, Express Scripts, the largest pharmacy benefits manager in the U.S., announced that it was excluding Valeant’s diabetes drug, Glumetza, from coverage. Express Scripts indicated that Valeant had jacked up the price of Glumetza by more than 800 percent last year, but there was a more affordable generic version now available.
“There’s more significance for public relations than formulary coverage,” said Adam Fein of Pembroke Consulting to STAT. “Express Scripts needs to demonstrate to their clients that they’re getting tough with manufacturers, because a lot of health plans are questioning Valeant’s action. But this is just one drug (that is being excluded). So the news has almost very limited impact on actual drug spending, but it’s a great way for Express Scripts to send a signal.”
Still, bad press after bad press can have an affect on stock prices. Valeant traded for $262.52 per share on Aug. 5, 2015, dropped to $166.50 on Sept. 28, and plunged to $70.32 on Nov. 17. Shares recovered slightly on Dec. 16 to $118.47, but are currently trading for $96.15.
