Berkshire Hathaway (NYSE:BRK.A) executive Charlie Munger still isn’t pleased with Valeant Pharmaceuticals (NYSE:VRX), despite billionaire investor Bill Ackman’s urging to change his mind on the company.
At the annual Berkshire Hathaway shareholders meeting in Omaha, Munger, who called the drug company a “sewer,” said he is sticking to his comments.
“There’s been a complaint about my saying that Valeant is a sewer, but I thought the complaint would come from the sewers,” Munger told the FOX Business Network’s Liz Claman. “It never occurred to me that anybody would be defending Valeant.”
Munger then took it a step further saying he believes “sewer” is too light of a word for Valeant’s behavior.
“The main thing that Valeant did that was unbelievably clever was to pay the consumer’s part of the deductible for the drugs they were selling,” he said. “That is totally illegal—criminal under the Medicare laws. But, that doesn’t apply under the state laws. And they saw that loophole and so they did it with all the drugs that weren’t covered by Medicare… they paid the consumer share of the deductible and they tried to pretend that it was a charitable contribution, when really it was the functional equivalent of bribing the other fellow’s purchasing agent.”
Despite the criticism of the company, Munger had kinder words for Valeant investor Bill Ackman.
“He certainly made a brilliant investment in General Growth Properties and he’s totally right about Herbalife. He’s very articulate and intelligent and he’s a fellow Harvard man, so he’s not all bad,” he said.
Ackman has publically accused Herbalife of being a pyramid scheme in a battle that has been widely chronicled on Wall Street.