On July 24, two announcements by the U.S. Department of Justice and United Kingdom-based pharmaceuticals company Indivior stated that that Indivior had reached an agreement with the U.S. Department of Justice, the Federal Trade Commission (FTC), and state attorneys general to resolve pending criminal and civil cases and an FTC investigation into alleged fraudulent marketing of the Indivior drug Suboxone.
Under the terms of the agreement, according to the Justice Department, wholly-owned Indivior subsidiary Indivior Solutions pleaded guilty today to a one-count felony criminal information charging false statements relating to health care matters. In connection with its guilty plea, Indivior Solutions admitted to making false statements to promote the film version of Suboxone to the Massachusetts Medicaid program (MassHealth) relating to the safety of Suboxone Film around children. The resolution includes a criminal fine, forfeiture, and restitution totaling $289 million.
In total, Indivior will pay a total of $600 million over a seven-year period to the Department, the FTC, and state attorneys general. The Department stated that in addition to the financial provisions, the agreement
includes novel provisions that:
- Require Indivior Inc. to disband its Suboxone sales force and not reinstate it;
- Require Indivior Inc.’s CEO to personally certify, under penalty of perjury, on an annual basis that during the prior year (a) Indivior was in compliance with the Food Drug and Cosmetic Act and did not commit health care fraud or (b) list all non-compliant activity and the steps taken by Indivior to remedy these acts;
- Prohibit Indivior Inc. from using data obtained from surveys of health care providers for marketing, sales, and promotional purposes;
- Require Indivior Inc. to remove health care providers from their promotional programs who are at a high risk of inappropriate prescribing; and
- Make Indivior subject to contempt sanctions by the court and reinstatement of the dismissed charges if it violates the agreement.
With regard to Indivior Solutions’s guilty plea, federal District Judge James P. Jones accepted the guilty plea, but deferred acceptance of the plea agreement until after the preparation of a presentence report. Sentencing in that case is scheduled for October 20, 2020. As for its 2019 indictment, Indivior reported that under the terms of the agreement, the Justice Department will move to dismiss all charges in that case.
In addition to the criminal and civil resolutions, the Department stated that
Indivior executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA requires that Indivior implement numerous accountability and auditing provisions. On an annual basis, top executives and the Board of Directors must certify about compliance, Indivior must conduct annual risk assessments and other monitoring, and an independent review organization will conduct multi-faceted audits.
Indivior stated that as a consequence of the CIA, Indivior Solutions will be excluded from participating in government health programs, but that the exclusion “will not affect Indivior PLC or its other subsidiaries.”
Note: This resolution is noteworthy for three reasons. First, it appears to be the culmination of the Department’s and the FTC’s investigations relating to fraudulent marketing of Suboxone by Indivior and Indivior’s former parent, Reckitt Benckiser Group. In 2019, Indivior was indicted on charges of fraudulently marketing Suboxone, and Reckitt agreed to its own resolution of $1.4 billion with the Department, the FTC, and various states. In addition, just last month Indivior’s Chief Executive Officer, Shaun Thaxter, pleaded guilty to one misdemeanor count of violating the Federal Food, Drug, and Cosmetic Act by causing the distribution of misbranded Suboxone in interstate commerce.
Second, Indivior should count itself lucky that it reached the resolution it did. At the time of its indictment last year, the company’s response went beyond simply declaring that it would contest the indictment vigorously, and declared that the Department’s action was
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 . . . .
Every company that finds itself under indictment is entitled, of course, to state publicly that it contests the charges. It is never a good idea, however, to make categorical statements at the start of a criminal case that are contradicted by the company’s own subsequent actions and decisions. Considering what Indivior stood to lose if it were convicted of the charges in the indictment — which included forfeiture of (1) a monetary judgment of not less than $3 billion, (2) seven Indivior-related business entities (including Indivior Solutions), (3) certain specified Indivior-related bank accounts; and (4) certain specified trademarks and patents – a $600 million resolution and debarring of Indivior Solutions is an onerous but bearable outcome for the company.
Third, the total resolution with the Department, the FTC, and states relating to the marketing of Suboxone is more than $2 billion. That amount, according to the Department, is “the largest-ever resolution in a case brought by the Department of Justice involving an opioid drug.”
For those reasons, pharma Chief Compliance Officers should brief senior management in their firms about the Indivior resolution, including the novel compliance provisions, and include appropriate details from that resolution in future compliance training.