Andy Davenport, the CEO of Philidor, the secret pharmacy whose discovery led to a crisis at Valeant Pharmaceuticals, has been arrested, according to people with knowledge of the matter.
It's not clear yet, exactly what the charges will entail. The DOJ's investigation into Philidor's sales tactics has been said to include another executive Gary Tanner.
Tanner led Valeant's Access Team before moving to Philidor to help build a national network of pharmacy partners.
The probe is focused on Valeant's $100 million acquisition of an option to buy Philidor, according to the people.
US prosecutors are separately investigating former Valeant CEO Michael Pearson and CFO Howard Schiller, Bloomberg News has reported.
Philidor is at the heart of the scandal that erased 90% of Valeant Pharmaceutical's market value. Almost no one had heard of the pharmacy until Valeant's relationship with Philidor was exposed by the Southern Investigative Reporting Foundation in October of 2015.
After questions about Philidor's sales tactics arose, investors abandoned the former Wall Street darling in droves.
Valeant had a sales plan dubbed the "Philidor strategy" and company documents show that it used the pharmacy and increase the volume of shipments for two of its drugs, Solodyn and Jublia.
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