
Valeant Sold Some Drugs Twice - dsri
http://www.bloombergview.com/articles/2016-03-21/valeant-sold-some-drugs-twice
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eitally
As the spouse of someone who was laid off as a result of a Valeant
acquisition, I'm torn between hoping they go under and hoping they get a
decent board/leadership and start making ethical decisions. Pearson disrupted
so many careers through their process of buying patents & firing almost all of
the staff of most of these companies he purchased.

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PascalsMugger
It annoys the hell out of me when I see articles referring to Valeant's
"acquisition and cost-cutting" strategies. No, they were slashing and burning.
What they did to the companies was not "cost cutting", it was corporate
raiding plain and simple.

I'm hoping to see them burn all the way down so that everybody who invested in
them, _knowing_ full well that their whole business plan was shady as hell,
loses all the money they invested. It seems we're already 80% the way there,
at least.

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refurb
Don't get me wrong, I think Valeant is shady as hell, but what's the
difference between cost-cutting and slashing-and-burning?

The companies Valeant purchased did not have a gun to their head and I'm sure
they were fairly compensated when purchased. Who cares what Valeant does after
the acquisition?

~~~
PascalsMugger
It's one thing to buy a company and then do layoffs to realize efficiency
gains, and another to buy a company essentially for its IP and fire everybody.
Sure, it's "cost cutting" taken to its logical extreme. But it's also
incredibly wasteful and disruptive.

Valeant's was able to overpay for these companies because it was betting that
its shady practices would allow it to realize outsize gains for the IP
acquired, and that's turning out to be a bad bet. So not only have they gutted
numerous companies, disrupting the lives of many researchers and others, but
they are also now under a mountain of debt and have a bunch of husks of
companies that aren't worth near what they were paid for. It's lose/lose/lose.
The only people who made out are the ones who original owned the companies
Valeant bought.

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hkmurakami
>It's one thing to buy a company and then do layoffs to realize efficiency
gains, and another to buy a company essentially for its IP and fire everybody.

Isn't that basically what Google did with Motorola?

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eitally
No, not at all. Motorola Mobility was bleeding cash for years (basically since
the end of life for the original Razor -- they didn't have any profitable
phones again until the X & G). Yes, Google wanted their patent portfolio, but
it's not like MMI was making money before the acquisition ... which was why
even prior to the Google purchase Motorola had split into MMI & MSI, which is
absolutely profitable selling radio gear & services.

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shkkmo
I don't get this. Valeant sold the drugs twice, but only because they:

Valeant made the drug

Valeant sold the drug to Philidor

Valeant bought the drug when it bought Philidor

Valeant sold the drug again.

The best I can tell, the issue is only that Valeant knew it was going to buy
Philidor when it sold Philidor those drugs.

I really don't see how this matters. Even the Author seems to admit that it
doesn't matter and that the real issue here is how Valeant was allegedly using
Philidor to trick insurance companies into paying more for drugs.

IMO, that makes the whole article title clickbait.

~~~
eitally
You should read this: [http://www.latimes.com/business/la-fi-1101-valeant-
pharmacy-...](http://www.latimes.com/business/la-fi-1101-valeant-
pharmacy-20151101-story.html)

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hanniabu
What I'm getting from this read is that Valeant is pretty much using these
acquisitions to create their own version of a ponzi scheme.

Is that right or am I not quite reading this correctly?

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yborg
It seems more correct to say that their real goal was to have a set of
"independent" pharmacies (but really not) that would pay high prices for
Valeant's drugs but still appear to insurers to be doing so because the
pharmacies concluded Valeant was the best supplier on its merits, not because
they were secretly controlled by Valeant. Seems like someone should be
spending time in Club Fed, but won't happen of course.

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refurb
Anyone familiar with the pharmaceutical industry could tell Valeant wasn't
headed anywhere but down.

Just take a look at their portfolio of drugs. There is nothing special there.
For the most part they were selling brand names drugs in diseases where a
generic drug would work just fine. The only reason they made money is because
they used every trick in the book to make sure nobody noticed what they were
doing.

The company was bound to fail at some point in time.

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stck
Did you short them?

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refurb
Good question! Nope!

What's the saying "the markets can stay irrational longer than you can stay
solvent"?

I've played the biotech markets before and quickly realized I'm not cut out
for them!

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ndboost
as a user of some of their medications, they can go to hell. $950 for a tube
of cream for a skin condition (without insurance) and $5 for the tube with
insurance.

Its crazy. First prescription I got was through philidor and i never saw the
cash price for the drug, after Philidor went under they partnered with
Walgreens and thats where i saw the cash price for the drug.. holy crap.

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r00fus
I love that table column names: "sell in", "sell through", _" why not both?"_

Edit: clarity

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kirk21
Must be painful for Ackman. He told that the stock price was close to what
they had in mind as 'fairly valued' a few months ago...

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kough
Can anyone give a background on this story?

