According to a VPNA (Valeant Pharmaceuticals North America) invoice to R&O, invoices are due in 30 days. See Exhibit E from VPNA’s counterclaim*.
According to the same counterclaim against R&O, “[…] R&O had 45 days in which to pay for the Valeant medications”. See page 9 of “VRX Counterclaim.pdf” available here.
So is it 30 or 45? If it is 30, then VPNA may lose a lot of credibility in court. As well, the timing affects the timeline of events. R&O (or Philidor?) stopped sending out drugs on August 31, the same day that Russell Reitz’s lawyer wrote a scathing letter to Isolani. From the VPNA version of events, August 31 is 45+1 days after the last payment was received from R&O. If VPNA’s credit terms are 30 days, then it is curious that the company continued to send drugs to R&O (or Philidor?) even after its credit terms were breached. Recall that VPNA’s own Exhibit E states “TERMS: Due in 30 Days”.
EDIT (11/4/2015): This post has been edited extensively because I didn’t realize that the example invoice from my original post was from VPNA’s own counterclaim.
Somewhere around July 27, 2015, Isolani became aware that Russell Reitz was withholding reimbursement checks from R&O’s accounts. You might think that this would force the business to halt operations. An Isolani court filing (page 8) against Reitz states:
As a result of Reitz’s and R&O’s material breaches of the MSA, Isolani will be forced to shut down operations at the Pharmacy within the next 10 days.
In fact, operations did not shut down. Documents filed with the court suggest that Philidor continued to ship out drugs on R&O’s behalf until August 31, 2015.
I find this very strange. Why send out drugs when it is highly uncertain as to whether or not your company will be paid?
Valeant has a reputation for significantly increasing the prices of its drugs. The truth is a little more complex than that.
Through its so-called “specialty pharmacy” channel, Valeant engages in an unusual practice of sending drugs to consumers without a guarantee of receiving insurance reimbursement from private payors. If the reimbursement claim is ultimately denied, Valeant ends up selling a drug at firesale prices.