A class action settlement has been announced in a long running case against Bausch Health Cos. Inc., formerly known as Valeant Pharmaceuticals. The settlement announced December 16, 2019 said Bausch will pay $1.2 billion to resolve the securities class action accusing its former leaders of fraudulently inflating its stock when the Canadian company was known as Valeant Pharmaceuticals.

The nearly five-year-old lawsuit claimed Valeant used a clandestine network of pharmacies to push high-priced drug prescriptions, sending the stock plummeting once price-gouging allegations surfaced. Under the settlement, payouts will begin in mid-January and will be funded by cash and revolving credit, according to the announcement.

The stock-drop litigation represents consolidated claims by investors who saw Valeant’s stock price slide from more than $250 a share in 2015 to below $10 two years later. The company has been fined by regulators and sued by investors who said it defrauded the market.

The complaint alleged that Valeant duped insurers by changing prescription codes to ensure they were filled with Valeant-branded drugs and making claims for unrequested refills, investors said, and covered up the scheme by lying about the pharmacies’ ownership and issuing a series of false statements to investors.

The case is In re Valeant Pharmaceuticals International Inc. Securities Litigation, case number 3:15-cv-07658, in the U.S. District Court for the District of New Jersey.

This blog is intended to provide information to the general public and to practitioners about developments that may impact Oregon class actions.