Philidor Rx Services
| Company type | Private |
|---|---|
| Industry | Pharmaceutical |
| Founded | 2013 |
| Founder | Matthew S. Davenport, Andrew (Andy) Davenport |
| Headquarters | Horsham, Pennsylvania , United States |
| Products | Specialty pharmaceuticals, including Solodyn, Jublia, Retin-A Micro |
Philidor Rx Services is a specialty online pharmacy licensed in Pennsylvania that primarily distributes medications from Valeant Pharmaceuticals International Inc directly to patients while handling insurance claims on their behalf.
BQ6 Media Group LLC
Headquartered in Horsham, Pennsylvania, with operations in Philadelphia, BQ6 Media Group LLC is a privately owned marketing agency focusing on pharmaceutical marketing, communications, and promotional activities. The company has provided consulting services to Valeant among other clients in the pharmaceutical sector. Situated approximately four kilometres from Philidor’s office, BQ6 Media characterizes itself as experts in game theory, merging creative insight with data-driven analysis and market knowledge to assist pharmaceutical brands in advancing through zero-sum game theory principles. Their work involves crafting innovative strategies to transition pharmaceutical products from development pipelines into commercial markets.
Philidor operates within a network that includes BQ6 Media Group LLC and Isolani LLC. Isolani LLC was established by Philidor RX Services. The names of these entities are inspired by chess terminology: Philidor is named after an 18th-century French chess master and the Philidor position, while Isolani refers to an isolated pawn. BQ6 Media’s name alludes to a renowned move made by Bobby Fischer during his 1972 match against Boris Spassky. The Southern Investigative Reporting Foundation (SIRF) identified Matthew Davenport, David Wing, John Carne, and Gregory Blaszcynski as officers of both BQ6 Media and End Game Partnership LLP—another chess-themed organization—with Blaszcynski serving as assistant treasurer. SIRF also highlighted Valeant’s subsidiary KGA Fulfillment Services Inc., whose name references the King's Gambit Accepted chess opening.
History
Established in 2013 by Matthew S. Davenport and Andrew (Andy) Davenport, Philidor Rx Services began as an online pharmacy registered in Delaware, maintaining offices in Horsham and Hatboro, Pennsylvania.
California, representing the largest pharmaceutical market in the United States, presented significant obstacles for Philidor and Valeant when attempting to fulfill prescriptions there. In August 2013, Philidor sought a California Non-Residency Pharmacy Permit but was denied in May 2014 amid allegations of application falsification—specifically misrepresenting principal ownership and omitting Andrew Davenport’s 27% ownership stake—which led to accusations of unethical behavior.
On December 1, 2014, pharmacist Russell Reitz transferred ownership of R&O Pharmacy, a specialty mail-order pharmacy located in Camarillo, California, to Isolani LLC for $350,000 while continuing as manager. Prior to acquisition, R&O managed a relatively small prescription volume; following the sale, its name and license number were utilized to dispense prescriptions nationwide totaling approximately $230 million annually. Reitz expressed concerns through emails addressed to Philidor CEO Andy Davenport and Isolani’s Eric Rice regarding unauthorized use of his pharmacy’s identification number for billing prescriptions filled by other pharmacies—including medications not stocked by R&O or billed before the sale was completed.
West Wilshire Pharmacy in Los Angeles is another affiliate within the Philidor network.
A 2015 report by The Wall Street Journal disclosed that Valeant employees supported Philidor during its formative phase by helping establish operational frameworks. In 2014 alone, Philidor generated 250 employment positions. Valeant CEO J. Michael Pearson revealed that Valeant paid $100 million at the end of 2014 for an option granting the right to acquire Philidor over the subsequent ten years. Additionally, Philidor possesses an option to acquire Isolani LLC, which owns R&O Pharmacy in Camarillo.
Specialty pharmacies
Philidor primarily dispensed prescriptions for Valeant’s premium-priced medications, including Solodyn, an oral antibiotic targeting moderate to severe acne, and Jublia, used to treat toenail onychomycosis. They also filled prescriptions for Retin-A Micro (tretinoin). Both Jublia, which received FDA approval in July 2014, and a newer 0.08% Retin-A Micro formulation, approved in January 2014, were part of the product portfolio acquired through Valeant’s 2008 acquisition of Dow Pharmaceuticals.
As of October 2015, the average wholesale price for a 30-tablet supply of Solodyn reached $1,040.41, while an 8-milliliter bottle of Jublia was priced at $1,075.72, according to data from Truven Health Analytics.
ProPublica highlighted that specialty pharmacies function as dependable distribution networks for costly medications by providing patients with convenience and reduced out-of-pocket expenses while optimizing insurance reimbursements. Patients generally incur consistent co-pay amounts regardless of their insurance plans.
According to Reuters, specialty pharmacies manage drugs that require specialized storage or administration protocols, often for serious illnesses such as cancer or rheumatoid arthritis. Valeant utilized Philidor to distribute a variety of its products, including those treating acne and fungal nail infections.
Valeant and Philidor
The business practices of Philidor Rx Services came under intense examination during a 2015 investigation involving its affiliate, Valeant Pharmaceuticals International Inc. Valeant revealed it held an option to purchase Philidor RX Services amid the inquiry. These developments contributed to a downturn in Valeant’s share price.
Testimonies from former employees and internal documents suggested that Philidor manipulated physician prescriptions to increase reimbursements from insurers. Early Valeant personnel overseeing Philidor operations used separate fictitious email accounts to compartmentalize communications and safeguard proprietary information. For example, Valeant manager Bijal Patel adopted the pseudonym "Peter Parker" when monitoring prescriptions processed by Philidor.
In October 2015, leading pharmacy benefit managers (PBMs) such as Express Scripts, the largest PBM in the United States, initiated reviews of pharmacy programs from companies like AbbVie and Teva Pharmaceutical Industries for potential adoption of strategies similar to those employed by Philidor. These approaches reportedly enabled pharmaceutical manufacturers to circumvent reimbursement limitations and encourage patients to choose higher-cost branded drugs over less expensive generics.
A central accusation was that Valeant leveraged its control over Philidor’s pharmacy services to channel patients toward its costly medications. On October 22, BMO Capital Markets analyst Alex Arfaei characterized Valeant’s close relationship with specialty pharmacies as "not just aggressive, but questionable," and withdrew his endorsement of the specialty pharmacy model.
Valeant rejected Citron Research’s allegations branding it the ‘Pharmaceutical Enron’ as inaccurate. Nevertheless, on October 30, amid escalating scrutiny surrounding its business methods, Valeant terminated its association with Philidor.