Justice Department, 6 Whistleblowers Win $1.4B Settlement With Opioid Maker
The U.S. Department of Justice said the Reckitt Benckiser Group also entered a nonprosecution agreement to resolve potential criminal charges. The settlement included the U.K.-based group and its subsidiary in New Jersey, Reckitt Benckiser LLC.
July 11, 2019 at 05:45 PM
4 minute read
Six whistleblowers scored a major victory Thursday when the global consumer goods conglomerate Reckitt Benckiser Group announced a record $1.4 billion civil settlement with the federal government over sales and marketing of the opioid Suboxone.
The U.S. Department of Justice said the RB Group also entered a nonprosecution agreement to resolve potential criminal charges. The settlement included the U.K.-based group and its subsidiary in New Jersey, Reckitt Benckiser LLC.
In a statement, the company said, “While [the RB Group] 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.”
The company did not respond to a request for comment, but its statement continued, “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.”
Rupert Bondy, general counsel of the RB Group, signed the settlement agreement for his company, and then signed a second time representing the New Jersey subsidiary. He could not be reached for comment.
Federal prosecutors said until 2014 the RB Group wholly owned a pharmaceutical subsidiary now known as Indivior Inc. that sold Suboxone throughout the U.S. The whistleblowers filed their qui tam suits in 2013, and the RB Group spun off Indivior the next year and is no longer affiliated with it.
Indivior was indicted in April for allegedly engaging in an illicit nationwide scheme to increase prescriptions of Suboxone through falsely marketing it as safer than similar drugs, and by engaging in anti-competitive behavior to delay a generic version. The drug is used by recovering opioid addicts to avoid or reduce withdrawal symptoms while they undergo treatment.
The indictment also alleged that Indivior touted its “Here to Help” internet and telephone program as a resource for opioid-addicted patients. Instead, according to the indictment, Indivior used the program to connect patients to doctors it knew were prescribing Suboxone and other opioids to more patients than allowed by federal law.
Indivior's criminal trial is scheduled to begin May 11, 2020, in U.S. district court in Abingdon, Virginia.
Kenneth Yoffy, counsel for one of the whistleblowers, told Corporate Counsel, “it's not over yet. Our qui tam suit against Indivior is still pending.”
Yoffy praised his client, Ann Marie Williams, as “an incredibly courageous person, as were the other five whistleblowers, for exposing what the company was doing. Whenever you file a qui tam action, your life becomes disrupted, and this case has been going on for six years.”
Scott Simmer, partner at Baron & Budd in Washington, D.C., represented a second whistleblower, Gail Scott. Simmer said in a statement, “I am very proud of the courage of our client who came forward with critical information of [the RB Group's] conduct. She put her career on the line to do what's right.”
Simmer continued, “Today's settlement represents a small step in the right direction towards holding opioid manufacturers responsible for their role in creating a public health crisis that continues to plague our country.”
The six whistleblowers will be able to share from 15% to 25% of Thursday's civil settlement, with more possible from the Indivior case. The exact amount has not yet been determined.
There have been larger settlements with non-opioid drug makers, including a $3 billion deal with GlaxoSmithKline in 2012. But DOJ said the RB Group settlement was the largest ever with an opioid company.
The recovery includes the forfeiture of proceeds totaling $647 million, civil settlements with the federal government and the states totaling $700 million, and an administrative resolution with the Federal Trade Commission for $50 million.
In addition to the payments, the RB Group agreed not to manufacture or market controlled substances in the United States for three years, and to cooperate fully with all DOJ investigations and prosecutions related to Suboxone.
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