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by Mike Caswell

Gary Tanner, the former Valeant Pharmaceuticals Inc. executive defending fraud charges over a kickback scheme, has lost a motion to dismiss the case. A New York judge has determined that prosecutors set out the charges in sufficient detail for the matter to proceed. Among other things, the government accused Mr. Tanner of accepting kickbacks at Valeant's expense.

The case stems from a scheme related to Philidor Rx Services LLC, a controversial on-line pharmacy that sold Valeant drugs. Prosecutors claim that Mr. Tanner and a co-accused, Andrew Davenport, pressed Valeant into making a $300-million deal to acquire Philidor, while plotting to take $40-million of the takeover cash for themselves. (All figures are in U.S. dollars.) Mr. Tanner had used his position in Valeant to engineer the takeover offer, with the company unaware of a side-deal that would have seen him receive $9.7-million, according to the government.

On June 16, 2017, Mr. Tanner filed a motion in which he asked the judge to dismiss the case, claiming that he did nothing that was illegal. As he saw things, the law did not prevent him from advancing his own interests and the interests of Valeant at the same time. He said that he and Mr. Davenport had turned Philidor into a profitable entity that directed buyers to Valeant products instead of cheaper generic alternatives. This was all in Valeant's best interest, he contended. Nothing he did amounted to fraud (including, apparently, his alleged receipt of $9.7-million).

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