The England-based company denies any wrongdoing and said the settlement 'is in the best interests of the company and its shareholders.'
Reckitt Benckiser Group plc will pay $1.4 billion to settle criminal and civil investigations into the marketing of the drug maker's opioid addiction treatment drug Suboxone, the Department of Justice announced Thursday.
The settlement – so far, the largest involving an opioid drug – includes criminal forfeitures totaling $647 million, civil settlements with the federal and state governments totaling $700 million, and an administrative resolution with the Federal Trade Commission for $50 million, DOJ said.
Slough, England-based RB Group issued a statement denying "any wrongful conduct," and said the "non-criminal resolution … 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 at a time of significant transformation under RB 2.0 and during CEO transition," the company said.
Suboxone and its active ingredient, buprenorphine, are opioids. The drug is used by recovering opioid addicts to reduce withdrawal symptoms.
According to a federal criminal indictment, Indivior Inc., a one-time subsidiary of RB Group (then known as Reckitt Benckiser Pharmaceuticals Inc.) between 2010 and 2014 allegedly took part in an illegal scheme to increase prescriptions of Suboxone across the United States.
Indivior allegedly promoted the film version of Suboxone to healthcare providers and administrators and Medicaid officials as less-divertible and less-abusable than other buprenorphine drugs, even though they had no evidence to back up the claims.
The indictment further alleges that Indivior used its supposed help line for opioid-addicted patients as a conduit to connect them with doctors who would prescribe Suboxone and other opioids to more patients than allowed by federal law, at high doses, and in a "careless and clinically unwarranted manner," DOJ said.
In addition, Indivior announced a "discontinuance" of its tablet form of Suboxone based on supposed "concerns regarding pediatric exposure" to tablets. The real reason why the drug maker discontinued the drug, prosecutors allege, was to delay the Food and Drug Administration’s approval of generic tablet forms of the drug.
Prosecutors said the schemes converted thousands of opioid addicts to Suboxone, which caused state Medicaid programs to expand coverage for the drug at a substantial cost.
To resolve criminal liability, RB Group signed a non-prosecution agreement under which it will forfeit $647 million it earned from Indivior sales and stop the production, marketing and sale of Schedule I, II, or III controlled substances in the United States for three years.
"This is a landmark moment in our fight to hold drug companies responsible for their role in the opioid crisis," Virginia Attorney General Mark Herring said in prepared remarks. "We will not allow anyone to put profits over people, or to exacerbate or exploit the opioid crisis for their own benefit."
Under the civil settlement, RB Group will pay $700 million to resolve claims that it's alleged illicit marketing of Suboxone from 2010 through 2014 caused false claims to be submitted to state Medicaid programs.
The $700 million settlement amount includes $500 million to the federal government and up to $200 million to states.
Under a separate agreement with the FTC, RB Group will pay $50 million to resolve claims that it unfairly impeded competition from generic equivalents of Suboxone.
"Buprenorphine products are approved for use in the treatment of Americans struggling to overcome opioid addiction," said Gail Levine, a deputy director of the FTC's Bureau of Competition. "In the middle of the nation’s opioid crisis, RB Group allegedly sought to deny those consumers a lower-cost generic alternative to maintain its lucrative monopoly on the branded drug," she said.
Erika Kelton, a litigator with Phillips & Cohen LLP, who supplied the federal government with whistleblower information about Insys' illegal marketing of its synthetic opioid Subsys, said the RB Group settlement "demonstrate, once again, how misleading statements by pharmaceutical manufacturers can have devastating effects on patients."
"Pharma companies show astonishing disregard for vulnerable patients when they market their opioid products as safer and less susceptible to abuse than other opioid products, when the reality is that they are just as addicting and dangerous," said Kelton, adding that the penalties against RB Group are not severe enough.
"Financial settlements alone do not have a sufficient deterrent effect to really stop this kind of misconduct in the pharmaceutical industry," she said. "As a general matter, people need to be held personally accountable through the threat of incarceration and clawbacks of executives’ compensation and bonuses."
“Financial settlements alone do not have a sufficient deterrent effect to really stop this kind of misconduct in the pharmaceutical industry.”
Plaintifts Attorney Erika Kelton
John Commins is a senior editor at HealthLeaders.
To resolve criminal liability, RB Group signed a non-prosecution agreement under which it will forfeit $647 million and stop the production, marketing and sale of controlled substances in the United States for three years.
To resolve civil liabilities, RB Group will pay a $700 million settlement that sends $500 million to the federal government and up to $200 million to states.
RB Group will also pay the FTC $50 million to resolve claims that it unfairly impeded competition from generic equivalents of Suboxone.