Valeant Pharmaceuticals said it is terminating all ties with Philidor due to allegations relating to the specialty pharmacy distributor's business practices.
"We have lost confidence in Philidor's ability to continue to operate in a manner that is acceptable to Valeant," Chief Executive Michael Pearson said.
Earlier this week, Valeant said it would set up an ad hoc committee to look into the allegations related to the company's association with Philidor.
Influential short-seller Citron Research had accused the drugmaker of using Philidor to create "phantom sales" of its products or push more product through distribution channels than sales would warrant, an allegation that Valeant has denied outright.
Valeant said it intends develop a plan to ensure patients' access to drugs is minimally disrupted.