Drugs-to-food group Reckitt Benckiser (RB) has agreed to pay £1.1 billion to settle a long-running case involving a former prescription drug and an alternative to methadone injections sold in the United States.
The company has reached agreements with the US Department of Justice (DOJ) and the Federal Trade Commission (FTC) to resolve the investigation into the sales and marketing of Suboxone Film by its former prescription pharmaceuticals business Indivior, a business that was demerged from the group in 2014.
The payment ends all federal investigations into RB in connection with the Indivior indictment and claims relating to state Medicaid programs for those states choosing to participate in the settlement.
The company said: “While RB has acted lawfully at all times and expressly denies all allegations that it engaged in any wrongful conduct, after careful consideration, the Board of RB 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 at a time of significant transformation under RB 2.0 and during CEO transition. This is a non-criminal resolution and is on the basis that there is no admission of any violation of law or any wrongdoing by RB or any RB Group employee.’
The settlement amount will be funded through existing borrowing facilities and cash generation. RB has a provision of £319 million ($400 million) and will increase its provision to £1.2 billion ($1.5 billion) at its half-year results. RB believes this will cover the settlement and any remaining litigation exposures.
Suboxone is a drug used to treat opioid dependence among the increasing numbers of people who have been suffering or dying from their addictions to opioids.
It is an alternative to methadone injections and was the first to enable those who needed it to have treatment at home. Developed by RB Pharmaceuticals at the request of the National Institute on Drug Abuse, it was given approvals by the FDA in recognition of its importance to the US healthcare system, awarded orphan drug status and launched in 2002.
Suboxone and its related products have helped millions of people return to a normal life. Prior to Indivior’s separation from RB, five million people were treated in the US between 2003 and 2014 for opioid dependence.