Reckitt Benckiser has agreed to a $1.4 billion settlement to resolve US claims that its former pharmaceuticals business Indivior carried out an illegal scheme to boost sales of opioid addiction treatment. The settlement is now by far the largest by any company related to the US opioid epidemic.
Drug makers such as Johnson & Johnson, Teva Pharmaceuticals, and Purdue Pharma are facing similar probes due to their alleged role in the opioid crisis. The current epidemic is now being considered the worst drug crisis in US history, with over 130 Americans dying to opioid-related overdose every day.
The Reckitt Benckiser settlement follows the long-running probes conducted by the US Justice Department and the Federal Trade Commission into the companies’ marketing and sales of Suboxone Film. In April, Indivior was indicted and accused of deceiving doctors and healthcare benefit programs into believing Suboxone Film was safer and less susceptible to abuse than similar opioids.
The indictment also accused Indivior of using an internet and telephone program touted as a resource for opioid-addicted patients to connect them to doctors it knew were prescribing opioids like Suboxone at high rates.
According to the Justice Department, the scheme began before Indivior spun out of Reckitt in 2014 and resulted in thousands of opioid-addicted patients using the drug. Opioids played a role in a record 47,600 US overdose deaths in 2017, according to the US Centers for Disease Control and Prevention.
Indivior, however, said that the Reckitt settlement in the US is unrelated to its cases. Reckitt was not indicted like Indivior. However, the department last year joined several lawsuits alleging the British company improperly marketed the drug.
Reckitt entered into a non-prosecution agreement. The company also agreed to pay nearly $1.35 billion to resolve the Justice Department’s criminal and civil claims. The settlement also means that Reckitt will pay $50 million to resolve FTC claims that it engaged in anticompetitive activities aimed at impeding competition from generic versions of Suboxone.
In a statement, Reckitt said it “acted lawfully at all times and expressly denies all allegations that it engaged in any wrongful conduct.” The company’s board said it had decided to pay the settlement because it was in Reckitt’s best interests.
The consumer goods group had reportedly set aside $400 million to cover the cost of the investigations. But while the settlement is significantly higher, analysts agreed that it could allow the company’s new chief executive to focus on a turnaround plan. “After careful consideration, the board…determined that the agreement is in the best interests of the company and its shareholders. It avoids the costs, uncertainty, and distraction associated with continued investigations, litigation and the potential for an indictment,” the Nurofen maker said.
Reckitt shares rose 2.4 percent as investors decided the company was correct to pay the fine and bring an end to the matter. Click the link to see Schenectady's top rehab placement programs.
Indivior, on the other hand, 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. Indivior has also said it had strong defenses against the charges and would defend itself vigorously.
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