Reckitt to pay US$1.4 billion to end US opioid probes

July 12, 2019 08:29
The US Justice Department said the illegal scheme began before Indivior spun out of Reckitt in 2014 and resulted in thousands of opioid-addicted patients using the drug. Photo: Bloomberg

Reckitt Benckiser has agreed to pay up to US$1.4 billion to resolve US claims that its former pharmaceuticals business Indivior before it was spun out of the company carried out an illegal scheme to boost sales of an opioid addiction treatment, Reuters reports.

The settlement, the largest by any company related to the US opioid epidemic, resolved long-running probes by the US Justice Department and the Federal Trade Commission into the companies’ marketing and sales of Suboxone Film.

The deal came after Indivior in April was indicted and accused of deceiving doctors and healthcare benefit programs into believing Suboxone Film, itself a form of opioid, was safer and less susceptible to abuse than similar drugs.

The indictment said Indivior also used an internet and telephone program touted as a resource for opioid-addicted patients to connect them to doctors it knew were prescribing Suboxone and other opioids at high rates and in suspect circumstances.

The Justice Department said the scheme began before Indivior spun out of Reckitt in 2014 and resulted in thousands of opioid-addicted patients using the drug.

Opioids, including prescription painkillers and heroin, played a role in a record 47,600 US overdose deaths in 2017, the US Centers for Disease Control and Prevention has said.

Reckitt was not indicted like Indivior, but the department last year joined several whistleblower lawsuits alleging the British company improperly marketed the drug.

As part of Thursday’s settlement, Reckitt entered into a non-prosecution agreement and agreed to pay nearly US$1.35 billion to resolve the Justice Department’s criminal and civil claims.

It will also pay US$50 million to resolve FTC claims that it engaged in anti-competitive activities aimed at impeding competition from generic versions of Suboxone.

Reckitt said in a statement that it “acted lawfully at all times and expressly denies all allegations that it engaged in any wrongful conduct”. But it said its board had decided the settlement was in the company’s best interests.

Slough, England-based Indivior has pleaded not guilty to conspiracy and fraud charges. In a statement, it acknowledged Reckitt’s settlement but said it had no new information on the case. Its trial in federal court in Abingdon, Virginia is set for May.

Shares in Reckitt, whose products range from Mucinex cold medicine and Lysol cleaners, closed up 2.5 percent.

While the settlement is significantly higher than the US$400 million that the consumer goods group had set aside to cover the cost of the investigations, analysts said it could allow the company’s new chief executive to focus on a turnaround plan.

Separately, Indivior raised its full-year profit and revenue guidance after Suboxone lost market share at a slower pace than expected. Its shares closed 6.73 percent higher.

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