Bausch Health Cos BHC -3.08% . agreed Friday to pay $45 million to resolve regulatory claims that it improperly booked some revenue and misled investors about the impact of a significant price increase on a single drug.
The Securities and Exchange Commission said three former executives also agreed to pay penalties to settle the agency’s claims against them. Bausch Health was formerly known as Valeant Pharmaceuticals International Inc., a company that five years ago became a poster child for national criticism of high drug prices.
The SEC said Bausch Health, then known as Valeant, improperly recognized revenue stemming from sales made through Philidor, a mail-order pharmacy that accounted for a significant share of Valeant’s growth. Valeant didn’t disclose to investors its unique relationship with Philidor or risks related to Philidor, the SEC said.
Valeant helped establish, fund and subsidize Philidor, the SEC said Friday. The Wall Street Journal reported in 2015 that some people who appeared to work at Philidor were actually Valeant employees who used fake names in their emails.
The company explained its ties to Philidor in October 2015, but didn’t fully disclose the relationship or reveal how sales to Philidor affected certain key accounting metrics that Valeant disclosed in earlier periods, the SEC said.
Valeant grew through a series of deals and acquired the rights to sell a number of drugs whose prices it hiked. The company at the time said the drugs, some of which had already lost patent protection, were underpriced. Valeant’s price increases got the attention of Congress, and the company’s then CEO, Michael Pearson, said in testimony before Congress that it had been too aggressive in raising prices.