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Subject:  Re: VRX - Some notes from recent news Date:  3/18/2016  4:13 PM
Author:  DTBoojum Number:  24039 of 26255

there is no proof of insurance fraud no matter how often that mud is slung by you and others.

'Very often manufacturers are having a hard time to get coverage and often at first they get unfavorable tiers and only long after the launch advance to the better ones. So, in the meantime, they offer vouchers, samples, copay assistance, etc. to make sure that patients get immediate access to their drugs despite the dismal payer coverage.

Adam Fein has some data from early 2014:
There are now 561 co-pay offset programs, up by 34% in less than two years. More than 700 brand-name drugs have co-pay offset programs.

So copay is far from being only a Valeant/Philidor issue.

I know my criticism must be getting tiresome, and I should say that I am not in disagreement with you on your main point, which is that at $30, VRX is probably a pretty good bet. In fact, despite some misgivings, I have to grudgingly acknowledge that I think it is underpriced, on a sum of the parts basis, and as of this afternoon I have a small bet long at $27. So now I hope the Mackman people are going to be helping my bet by selling off some obviously valuable bits for good prices, as well as firing a lot of the management that got them (us) into this pickle.

But that said, I still think that pushing $2500 tubes of acyclovir, and making sure the insurance company covers it by one of the strategies you refer to (vouchers, samples, copay assistance) etc. is basically fraud. Maybe it is not illegal, and maybe the word fraud has to be used only for illegal schemes (sue me, I'm not a lawyer), but then you need another word. Deceipt? Scam? Artifice? Extortion? Duplicity? OK, now that I'm a shareholder, we'll just call it pushing the limits of the rules, in a situation where the rules are very poorly drawn up and enforced. Somewhere between:

Sequoia: "Sequoia defended Valeant, calling the company “an aggressively-managed business that may push boundaries, but operates within the law."


Munger: “It’s just a company that was too aggressive in ignoring moral considerations in the way it did business,” Mr. Munger said in an interview Monday."

Regards, DTB
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