Reckitt Benckiser to pay $1.4bn over opioid treatment sales

Galtero Lara
Julio 14, 2019

Consumer products company Reckitt Benckiser says it will pay $1.4 billion to resolve USA investigations into the marketing of an anti-addiction drug by a subsidiary.

The settlement will cover multiple investigations into the company's subsidiary, Indivior (formerly known as Reckitt Benckiser Pharmaceuticals Inc.), and its alleged illegal marketing of its drug, the U.S. Department of Justice (DOJ) said.

Federal prosecutors claimed that Reckitt "illegally obtained billions of dollars in revenue" by tricking healthcare providers into believing that Suboxone is safer and less susceptible to abuse than similar drugs although its active ingredient is an opioid. Reckitt "demerged" with Indivior in 2014 but the company still benefited for years from the Suboxone Film sales, the government 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, RB said in a statement.

In a statement, Reckitt said that while it denies all wrongdoing, it had decided the settlement - while hefty - avoids the costs, uncertainty and distraction associated with continued investigations, litigation and the potential for an indictment.

PHOTO:Rakesh Kapoor, chief executive officer of Reckitt Benckiser Group Plc, pauses during a Bloomberg Television interview in London, Feb. 19, 2018.

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.

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Shares in Reckitt, whose products range from Mucinex cold medicine and Lysol cleaners, closed up 2.5%.

The resolution is the largest recovery by the U.S. in a case concerning an opioid drug and includes the forfeiture of proceeds totalling $647 million, civil settlements with the federal government and the states totalling $700 million, and an FTC settlement. 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".

"The danger is that Narasimhan will be operating with one hand tied behind his back", Mould told the Reuters news agency.

Experts said the settlement amount sounded fair.

Reckitt said it would increase its provision related to the investigations to $1.5bn to cover both the cost of the settlement and "any remaining litigation exposures". "However, shareholders of consumer goods firm Reckitt Benckiser have reacted surprisingly well to news of today's big settlement with United States authorities".

The move by Reckitt came as Indivior lifted its outlook for 2019 sales and profit after a stronger-than-forecast first half.

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