Link: https://www.statnews.com/pharmalot/2016/03/29/valeant-lessons/
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The Valeant example, in The Boston Globe and industry site: STAT.
“Transparency is the only way to build confidence
This is a basic tenet of corporate governance, but Valeant never learned
this lesson. The drug maker blundered badly by failing to report that it
held an option to buy a mail-order pharmacy that it was using to boost
revenues.
Instead, short sellers disclosed the relationship last fall, prompting
suspicion from insurance companies about the way reimbursements were
handled. Federal authorities are now examining the details.
The episode began the downward spiral in Valeant stock. A failure to follow
certain accounting practices further undermined investor confidence.
“The pharmaceutical industry is under such public scrutiny now that any
arrangement that’s kept secret is going to be presumed to be evil,” said
Erik Gordon, a business and law professor at the University of Michigan.
“All companies should know that transparency matters.” ”
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Erik Gordon
Ross School of Business
University of Michigan
Ann Arbor, Michigan
Media Appearances 