Reckitt pays United States 1.4 billion dollar to settle opioid treatment spat

14 July, 2019, 07:14 | Author: Regina Silva
  • The opioid crisis in the United States has wreaked havoc on millions of lives with many addicts succumbing to drugs

Suboxone maker Reckitt Benckiser Group (RB Group) will pay the USA government a record $1.4 billion to end criminal and civil probes into the marketing of its addiction treatment medication, making it the largest settlement related to the opioid crisis in US history, authorities said on Thursday.

Reckitt said that it had acted lawfully at all times and expressly denied all allegations that it engaged in any wrongful conduct, but that after consideration determined that the agreement was in the best interests of the company and its shareholders.

It said the settlement would prevent uncertainty and distraction from continued investigations.

Finsbury's Faeth Birch and Philip Walters rep RB. Although the business was spun out of Reckitt Benckiser in 2014, the alleged wrongdoing largely occurred in a period when Indivior was a wholly owned subsidiary of the consumer health giant behind household name brands including Durex, Dettol, Air Wick, Cillit Bang and Strepsils.

The dissolvable film form of the drug was marketed as having a lower risk of being abused, but prosecutors say Indivior knew it could potentially be more unsafe. Shares in Reckitt Benckiser (RB), whose products range from Mucinex cold medicine and Lysol cleaners, rose as much as 3.3% in early trading yesterday.

RB said it will pay up to 1.4 billion US dollars (£1.1 billion) as part of an agreement with the US Department of Justice and the Federal Trade Commission to resolve the issue. But investors feared the USA investigations could hinder the company's transformation.

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The deal came after Indivior in April was indicted and accused of deceiving doctors and healthcare benefit programmes into believing Suboxone Film - itself a type of opioid - was safer and less susceptible to abuse than similar drugs. Analysts at JPMorgan wrote in a note that the settlement "clarifies the legal environment for RB and should allow the new management to focus on the RB 2.0 transformation".

Reckitt's settlement is only the latest in a series of actions brought by federal and state authorities against companies accused of fraudulent marketing practices for opioid drugs, which have contributed to an epidemic of overdose deaths across the U.S. in the last few years.

Experts said the settlement amount sounded fair.

Mould concluded: "The danger is that Narasimhan will be operating with one hand tied behind his back in his efforts to revive a business which has lost its way of late under current CEO Rakesh Kapoor".

"Opioid withdrawal is hard, painful, and sometimes risky; people struggling to overcome addiction face challenges that can often seem insurmountable", the Assistant Attorney General Jody Hunt for the Department of Justice's Civil Division said in a statement.

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