Federal charges brought against former pharmaceutical company executives offer awindow into the government’s perspective on why people are suddenlypaying more for their prescription drugs.

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Related: Why do drug prices continue toclimb?

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Federal prosecutors this week charged former executives ofValeant Pharmaceuticals, a publicly heldcompany, and mail-order firm Philidor Rx Services with concocting ascheme to enrich themselves while enhancing the bottom lines ofboth companies.

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The charges—conspiracy and fraud-related—allege that Philidor’sAndrew Davenport and Valeant’s Gary Tanner conspired to pushValeant drugs through Philidor’s channels, often involving passingover cheaper generic drugs in favor of “ailing” Valeant branddrugs.

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As reported by the New York Times, the government alleges thatthe two men made sure to channel millions illegally to one anotherin funds diverted from the main conspiracy.

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Tanner was forced out of Valeant and Davenport went down withhis ship when Philidor failed amidst investigations into the schemeby multiple law enforcement agencies.

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As outlined by federal prosecutors, the scheme demonstrates howconsumers can be forced to pay higher prices for their drugs due tocriminal activities inside drug makers and their businesspartners.

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Now, it’s Valeant shareholders who are being gouged. Valeantwas a Wall Street darling from 2013 to mid-2015. Its sharestopped out just shy of $260 in July 2015. Today, you can pick themup for $18.03 if you place your order quickly.

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Valeant was quick to tell the media that Tanner was long gone(although he received a separation payment of $9 million) and thatit had been cooperating with the feds. Tanner’s lawyer told the NewYork Times he’d done nothing wrong; perhaps not surprisingly,Davenport’s attorney said the same on his behalf.

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Those denials may have to be rolled out a few more times incoming months; the Times reported that other agencies are preparingcases against the pair.

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Dan Cook

Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.