Valeant Pharmaceuticals International Inc. has severed ties with its affiliate, specialty pharmacy network Philidor RX Services, after leading pharmacy benefit managers (PBMs) terminated their relationships with Philidor, citing noncompliance with the terms of their agreements. We believe reports of wrongdoing at Philidor weakens Valeant management's credibility, further harms the company's already tarnished reputation, and that these developments exacerbate potential legal, regulatory, and reputational headwinds for the company. We also believe the reputational issues could potentially compromise the company's ability to effectively market its products to doctors, beyond this channel. We are lowering our ratings by one notch, including lowering the corporate credit rating to 'B+' from 'BB-'. Our rating outlook is negative. We are lowering the rating on the senior
