Valeant Pharmaceuticals may be under criminal investigation over allegations that it defrauded insurers by hiding ties to a mail-order pharmacy that boosted sales, sources told The Wall Street Journal.



Federal prosecutors are probing whether pharmacy Philidor made false statements to insurers about its ties to Valeant, while helping patients get coverage for higher-priced Valeant drugs, The Wall Street Journal reported on Wednesday.

It's thought be the most serious probe Valeant faces, with possible criminal charges against former Philidor executives and Valeant as a company, a source told the Journal.

The relationship between Philidor and Valeant has been under scrutiny since October of last year, when questions were raised about Valeant's accounting, the Journal said. But the criminal investigation is based on an unusual legal theory that has not been previously reported.

Valeant's shares were seen down 9 percent after hours.

"Valeant has been cooperating and continues to cooperate with the ongoing Southern District of New York investigation," the a spokeswoman told The Wall Street Journal. CNBC has reached out for comment.

For the full story, see the article at WSJ.com.

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