Like many other "natural health" products, they can skirt around consumer deception laws by claiming it is not a drug while suggesting to consumers it is absolutely one. Think bogus supplements and homeopathy. Valeant is on the hook because they bought the manufacturer, Afexa, in 2011. The lawsuit claims the company's own studies showed it doesn't provide "immediate relief of cold and flu" if taken over a three-day period at the first sign of symptoms, like their advertising says. It barely does anything positive if taken daily for two months. Who has a cold for two months?
If it gets class-action approval, consumers could get their money back, which will be expensive since their natural marketing has worked so well. Just in B.C. the amount could be $500 million and an identical lawsuit has been filed in Saskatchewan.
The Valeant share price was over $260 a year ago and now is under $26, due to a series of mistakes that wouldn't have been so expensive if they had just flipped a coin, like buyers of Cold-fX were doing buying the product. Female Viagra, Seconal, this company will be a case study in business schools for how not to run a company in the near future. They have created a bear market in all pharmaceutical stocks by being so shockingly incompetent.
Look for expensive P.R. firms to be scrambling all over the Internet asking to have the Valeant side of the story published. If only they had spent their money on science and health instead.
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