Investor Firms T. Rowe, Alleghany Sue Valeant Over Marketing Tactics

Investment firms T. Rowe and Alleghany have filed a suit against Valeant and six executives over the company’s sales strategy that involved price gouging and acquisitions, claiming those tactics cost investors billions.

Since 2008, Valeant relied on hundreds of acquisitions and prices hikes of the newly acquired drugs to generate revenue, according to the lawsuit filed in the U.S. District Court for the District of New Jersey.  The firms accuse Valeant and company executives of securities fraud for concealing these business practices from investors.

The lawsuit contends Valeant exercised control over a network of pharmacies to stave off generic competition. The network of pharmacies issued prescriptions of Valeant’s high-priced drugs, the suit states.

In an effort to keep its sales up, Valeant changed prescription codes, filed claims for refills never requested by patients and misidentified dispensing pharmacies, the suit further contends. The company covered its tracks by falsifying financial records and regulatory filings, the investors say.