Fake Sales at VRX Too

Funny no mention about all the loading of trade channels at VRX. Mates in Europe tell me it is 3 months plus there and it is bad in Asia too. Blimey even the press and auditors are not onto this yet. There is no way to raise prices internationally so we have fake sales!

Amazing that Fatboy has gotten away with it so long. Rumour is he orchestrates the quarterly loads personally. Phone calls.

Another piece of the puzzle for Bronte! (Hope he is smart enough to read this.) It would tickle my fancy if the U.S. Congress staffers subpoenaed a few of the int execs and asked them to confirm under oath whether loading was going on. That would be a real laugh!

 

channel stuffing took down the leadership of Salix - what great karma if it takes down Big P. Analysts need to start asking the same tough questions they asked Carolyn Logan and Adam Derbyshire...

 

Zero proof your talking out of your ass!

 

Got to say thank you for the lead. I am not surprised - but there is some accounting in the 10-K which puzzles me regarding this. Specifically this disclosure which suggests a vast vast amount of rebate payable... I mean what is a couple of billion in rebates between friends...

John (at Bronte) - sorry the formatting don't work


The following table presents the activity and ending balances for our product sales provisions for each of the last three years.


Discounts
and
Allowances

Returns

Rebates

Chargebacks

Distribution
Fees

Total
($ in millions)

$

$

$

$

$

$
Reserve balance, January 1, 2012

7.8


119.1


121.1


15.2


11.5


274.7

Acquisition of Medicis

2.4


61.0


148.4


2.4


7.7


221.9

Current year provision

67.1


57.4


432.2


191.4


44.8


792.9

Prior year provision

—


(10.5
)

2.0


—


—


(8.5
)
Payments or credits

(58.6
)

(55.9
)

(334.4
)

(181.0
)

(50.1
)

(680.0
)
Reserve balance, December 31, 2012

18.7


171.1


369.3


28.0


13.9


601.0

Acquisition of B&L

49.0


55.4


104.1


20.8


11.7


241.0

Current year provision

241.8


124.6


1,277.1


407.1


156.9


2,207.5

Prior year provision

(0.6
)

1.7


—


0.9


—


2.0

Payments or credits

(218.2
)

(127.3
)

(1,183.9
)

(378.0
)

(136.3
)

(2,043.7
)
Reserve balance, December 31, 2013

90.7


225.5


566.6


78.8


46.2


1,007.8

Acquisition of PreCision

3.5


20.7


31.4


1.5


—


57.1

Current year provision

422.1


285.9


1,271.5


985.1


515.4


3,480.0

Prior year provision

0.9


10.3


(0.9
)

—


—


10.3

Payments or credits

(390.8
)

(162.1
)

(1,153.7
)

(877.9
)

(476.5
)

(3,061.0
)
Reserve balance, December 31, 2014

126.4


380.3


714.9


187.5


85.1


1,494.2

 

I am working at VRX within a top management position in a Europeen Country. Mr. Hempton is right and so is the gentlemen colleage from Australia. We being pressured very much hard to stuff channels in VRX, where we can (like pharma) where this December in many countrys in Eruope it will be 2-4 months of this loading for some lines. It is definitely going to be bad big loading this Q4 too, already HQ is planning that. Probably they is having big profits shortage in America now with this Philibor skandal. I think this is irony that we do stuffing in Europe, because in America this stuffing I think is a crime, is it? I heard some of Cephalon or BMS managers in US went to jail for loading in 2005, but we is doing loadings in Europe at VRX really regularly, really systemicly. But probably this Philibor skandal is just another type of loading, so the Americans do it too, it only seems more complexified.

In my country, many of the wholesalers now be so tired of this VRX loading they refusing to take any more VRX products. And also we in VRX is being quite worried because we fearing in 2016 won't be anymore the mergers and acqusitions to allow us to disquise regular expenses in those 1-time write downs which are being used to push up EBITDA fakely, like in all other previous years. May be in 2016 also there won't even be little acqusitions (VRX do buy lots of small companys and products here in Europe and we call those "organic sales growth". Those acqusitions are what allow us to recover many times from previous loadings...We was making our targets despite load from previous year becasue we could recover from that channel stuffing because the small acqusitions give us upsides so we could make our targets.

Many of my colleauges in other Europeen countryy VRX teams are worried about doing this loading in this year now after the stock price is cut in half, because they don't think Mr. Pearson or are regional manageers will be at VRX in 2016 and then we is probably blamed for when there is no sales in 2016 as we sold everything in 2015 loadings. Some us even we are thinking to insist that our boss must make request for load this year in writing, no more just orally, so no one can fire us for it in future, so we is protected becasue we have order to load in writing and so it is clear this loading order is coming from from Eruope HQ and US and not our idea.

So what I wanted to say was that these storys about VRX in America with Philibor and Australia with VRX loading, these are not isolated storys, it is like a pattern! Sorry about my English. Hope you understand it.

 

Hi I think this last guy is writing about Poland? It has been similar here for a few years. We would like it so much if some journalists ask about this to Mike P. on those investor calls or if they make hard questions towards the guy who is Europe CFO Marcin Z. He is guy with kids so I don't put his family name. I think this is why they fire last GM Poland cos he does the loading and they needed to blame someone even though they probably made him to do it. It is true the wholesalers use us and they ask bigger discounts every year to take more load. I wonder if the new American GM understands all this bad history and if he does it too?

 

Could anyone please confirm these gossips. Where do I go officially? Which countries? Where would it appear in 10k? Who should we talk to in Europe? Thank you very much.

 

Ha Ha ha. This is all countries, even West Europe and BL business some quarters. Was very bad last year this time; I believe they discussed off-record at Board level. I am having a good Saturday morning reading this in Low Countries! Finally the truth comes out as Shakespeare says!

 

This must be about Baltics. Our new GM spend all his time searching to load or to do these parallel exports. He see it as main part of job! this company is sic!

 

Hi all. I am a reporter at ProPublica in New York. We've been working on stories about Valeant and would welcome the chance to talk to folks on this thread and others. My email is Charles.ornstein@propublica.org. Thanks.

 

So funny, this is how Propublica gets all their "inside information". There are middle school papers with more credentials than the "reporters" at propublica.

 

It's hard to tell whether these allegations, if true, imply that there's widespread fraud. In my years in pharma, I don't recall hearing about a sales team that WASN'T encouraged to push product aggressively through the channel. If it gets too egregious (i.e. Returns and eventually no cash receipts) then that's a problem but for the most part it gets worked through the channel. I don't work at Valeant (this whole thing is just fascinating) but these activities don't sniff as abnormal ( they may not be ethical!)

 

At Valeant, egregiousness is the norm. Take this from someone who works at Valeant AND other much nicer places

 

Dude...channel stuffing is illegal because it is intended to fool the market about the demand for company products. But that is just one of the illegal activities commited by VRX. Even Ackman said that it will take 4 years for authorities to work their way through all the violations. Other boards have fired the CEO for far less. Wonder what is taking so long here.

 

Valeants board doesn't have the stones to go against Fat Fuck Pearson. They all drank the koolaid and will go down with him.

 

All you need to do is know that Valeant hired and paid "Philidor" reps to go into offices to sell Phildor services. IE Philidor Field Sales employee paychecks come DIRECT from Valeant. Check W2's. Proof is all there.

 

Has the US Channel been stuffed?

 

Channel stuffing is the ultimate house of cards that eventually falls. I'd have to really look at the 10-K to figure out where it would appear. It should really fall on the auditors to check this stuff as it will always shake out in the returns when this crap doesn't sell. Unfortunately, if individual countries are utilizing parent materiality each country might slip under that threshold but taken together it's material.

Watch the auditors tighten the screws in this years audit to "look tough" and cover their ass. We should see some things fall out in that, if their partner has any integrity that is.

 

So just a quick check of the 2014 10-K shows returns reserve increased 69% vs. sales increases in the 40's%, that could be something. It's really hard to parse out because they have so much crap going on with their countless acquisitions.

 

I'd like to say that this loading is not just in Poland and Baltics. It is everywhere in Valeant in Europe. It is also in Slovenia, Croatia and Serbia, where Valeant has big business. Loading is incredible high in Serbia. And the loading is far more what normal companies do measured as percentage yearly sales. Local wholesalers complain they have trouble storing all the medicines Valeant place with them! When loading really bad at end of year it goes to maybe 30%-35% of yearly sales. This year probably be even worse. It is all centrally coordinate from Prague HQ and New Jersey. We cannot understand how auditors allow it.

I wanna say that it is a bad situation, stressful and unpleasant, and the bosses don't care and are stealing from the company. The boss of Slovenia/Croatia/Bosnia fired the people who reported his stealing scam. He fired the people (six Finance and Logistic women in Slovenia) after he survived a fake investigation organized by the Boss of Finance Europe and the Boss of Compliance Europe -- it was fake because investigation was suppose to be surprise "flashed" audit but somehow everyone was warned a week before, so there was time for big cover-up was completed. This was fake investigation and 100% violate Valeant compliance rules but no one says nothing. Afterward, Boss of Europe Finance supported firing of whistleblower! Amazing. Cover-up allowed the thief boss of Slovenia to survive the audit. This is the way Valeant company is run. Boss of Slovenia was defend by his boss, who runs all SE Europe and everyone think they stealing together. We don't know if Boss of Europe understands truth, but he allow all this games to happen including firing of whistleblower without compensation and he never does nothing. Except sell his stock options every minute. Maybe he too involved or just doesn't care? No honesty and no professional approach.