Tuesday, 15 October 2019
Latest news
Main » Reckitt to pay $1.4 bln to end US opioid addiction treatment probes

Reckitt to pay $1.4 bln to end US opioid addiction treatment probes

14 July 2019

Shares in consumer healthcare colossus Reckitt Benckiser (RB.) rose 2.5% to £65.86 on news it will pay up to $1.4bn (£1.1bn) to fully resolve all U.S. federal investigations into the sales and marketing of opioid addiction treatment Suboxone Film by its former subsidiary, pharma business Indivior (INDV).

The company said Thursday it reached agreements with the U.S. Department of Justice and the Federal Trade Commission.

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. It's made by Reckitt's former pharma arm, Indivior, which became a stand-alone company in 2014.

More news: Jenelle Evans allegedly ‘fabricated’ David Eason dog killing ‘for publicity’

The company said it had acted lawfully at all times and denied any wrongdoing, but had determined that the agreement was in the best interest of 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", Reckitt said in its announcement.

The indictment said Indivior also used an internet and telephone program touted as a resource for opioid-addicted patients to connect them to doctors it knew were prescribing Suboxone and other opioids at high rates and in suspect circumstances. 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.

More news: Canada’s Kia Nurse named a starting guard for WNBA all-star game

PHOTO:Rakesh Kapoor, chief executive officer of Reckitt Benckiser Group Plc, pauses during a Bloomberg Television interview in London, Feb. 19, 2018. But investors feared the USA investigations could hinder the company's transformation.

The US authorities criticised Indivior for having sought to take advantage of the opioid addiction crisis in the United States by exaggerating the safety of its drug Suboxone. Analysts at JP Morgan wrote in a note that settlement "clarifies the legal environment for RB and should allow the new management to focus on the RB 2.0 transformation". This morning it said it will increase the provision to $1.5 billion in order to cover the settlement and any remaining litigation exposures. In a statement, it acknowledged Reckitt's settlement but said it had no new information on the case.

Separately, Indivior's shares shot up 37.7% to 61p after it raised full year profit and sales guidance thanks to a better than expected first half showing from Suboxone. In effect, the settlement would require the British consumer goods group to raise an amount of $1.5 billion to cover costs of investigation, however, previously the company had told that it had been seeking a settlement at $400 million.

More news: Manhattan 'completely dark' after NYC power cut

Reckitt to pay $1.4 bln to end US opioid addiction treatment probes