U.S. Department of Justice Obtains Indictment of Pharma Firm Indivior for Fraudulently Marketing Prescription Opioid, Seeks At Least $3 Billion

On April 9, the United States Department of Justice announced that a federal grand jury in the Western District of Virginia had returned an indictment charging United Kingdom-based Indivior PLC (formerly known as Reckitt Benckiser Pharmaceuticals Inc.) and Indivior PLC (Indivior) with “engaging in an illicit nationwide scheme to increase prescriptions of Suboxone Film, an opioid drug used in the treatment of opioid addiction.”

The Department stated that according to the 47-page indictment,

Indivior obtained billions of dollars in revenue from Suboxone Film prescriptions by deceiving health care providers and health care benefit programs into believing that Suboxone Film was safer, less divertible, and less abusable than other opioid-addiction treatment drugs. Indivior also is alleged to have sought to boost profits by using a “Here to Help” program to connect opioid-addicted patients to doctors the company knew were prescribing opioids at high rates and in a clinically unwarranted manner.

The indictment also alleged that

Indivior developed Suboxone Film around 2007 as a patent-protected alternative to the tablet form of Suboxone, which was then about to face generic drug competition. The primary ingredient in both Suboxone Film and tablets is buprenorphine, a highly potent opioid. Indivior promoted Suboxone Film as safer and less-divertible than its tablet form, even though the company lacked any scientific evidence to support those claims. In particular, Indivior aggressively marketed Suboxone Film, without an established basis, as having a “lower risk of child exposure” and a “less divertible/abusable formulation.”  Indivior made these and other false and misleading claims in marketing materials and through representations to physicians, pharmacists, and health care benefit programs throughout the country. The indictment also alleges that, to further its scheme, Indivior announced a “discontinuance” of its tablet form of Suboxone based on supposed “concerns regarding pediatric exposure to” tablets, when in fact Indivior executives knew the primary reason for the discontinuance was to delay the Food and Drug Administration’s approval of generic tablet forms of the drug.

In addition, according to the Department, Indivior allegedly “used its ‘Here to Help’ internet and telephone program as part of its scheme to induce physicians to write prescriptions for Suboxone Film.” Although it touted the program as a resource for opioid-addicted patients, Indivior allegedly “used the program in part to connect patients to doctors it knew were prescribing Suboxone and other opioids to more patients than allowed by federal law, at high doses, and in suspect circumstances.” The indictment also alleges “that Indivior executives and employees knew from statistical and numerous firsthand reports that some doctors in the Here to Help referral system were issuing prescriptions in a careless and clinically unwarranted manner.”

The indictment charges Indivior with a total of 28 felony counts consisting of conspiracy to commit mail fraud, wire fraud, and health care fraud, and substantive counts of health care fraud, mail fraud, and wire fraud.  It also contains a notice of forfeiture that indicates that the Department is seeking via forfeiture (1) a monetary judgment of not less than $3 billion, (2) seven Indivior-related business entities and all assets, inventory, and property related thereto (i.e., Indivior Finance (2014) LLC; Indivior Finance SARL; Indivior Global Holdings Ltd (a/k/a RBP Global Holdings Limited); Indivior Inc. (a/k/a Reckitt Benckiser Pharmaceuticals Inc.); Indivior PLC; Indivior Solutions Inc. (a/k/a Reckitt Benckiser Pharmaceuticals Solutions Inc.); and Indivior US Holdings Inc_. (f/k/a RBP US Holdings Inc.); (3) certain specified Indivior-related bank accounts; (4) and certain specified trademarks and patents.

In response, Indivior issued a lengthy press release, in which it stated that it was

extremely disappointed in this action by the Justice Department, which is wholly unsupported by either the facts or the law. Key allegations made by the Justice Department are contradicted by the government’s own scientific agencies, they are almost exclusively based on years-old events from before Indivior became an independent company in 2014, and they are wrong. The department has apparently decided it would rather pursue self-serving headlines on a matter of national significance than achieve an appropriate resolution, but we will contest this case vigorously and we look forward to the full facts coming out in court.

The press release, which set forth specific rebuttals to the indictment’s allegations, stated that Indivior “has cooperated extensively with the Justice Department’s investigation for several years” and had

turned over millions of pages of documents and spent extensive time explaining the company’s operations to the department. In the interest of resolving this matter and providing certainty to our shareholders, we have made numerous attempts to reach a settlement that went far beyond what we believe the facts of this case support. It is unfortunate the Justice Department decided to choose an alternative path, but we will fight these allegations on the facts and on the law in court, and we are confident of our position.

Indivior’s former parent, Reckett Benckiser Pharmaceuticals, issued a separate statement in which it briefly stated that the indictment “is not against RB Group Plc or any other group company and we currently have no additional or new information in respect of this matter, apart from what has been publicly issued by the Department of Justice and Indivior Plc.”

Note: This indictment represents the second major case that the Justice Department has brought in this Administration against pharma companies for allegedly fraudulently marketing and promoting opioids.  In the first case, involving Insys Therapeutics, the Justice Department last year joined a series of whistleblower lawsuits against Insys, and is now awaiting the jury’s verdict in a criminal racketeering case against Insys founder John Kapoor and other former Insys executives.

Despite Indivior’s aggressive press response to the indictment, its share price, which The Times reported “had already declined sharply over the past year,” plummeted 73 percent in one day to 28p.  According to The Times, one U.S. brokerage firm has opined that Indivior did not have the financial resources to pay a $3 billion fine.  Since Indivior had previously stated that it had “set aside $438 million to cover legal matters, most of which relates to the [Department’s] investigation” and Reckitt had separately reserved £303 million ($390 million) in connection with the investigation, those numbers may be closer to what the Department ultimately would seek from both companies in any further settlement negotiations.

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