Class Skewers UK Pharma Firm Over Opioid-Addiction Treatment

(CN) –  Investors claim in a class action that U.K.-based health conglomerate Reckitt Benckiser Group PLC engaged in a multibillion-dollar scheme to facilitate opiate usage and abuse among U.S. consumers, generating over $3 billion in proceeds by allegedly misleading consumers and investors about risks of the company’s Suboxone film and Suboxone tablets, prescription drugs used to treat opioid addiction.

The City of Sterling Heights Police & Fire Retirement System filed a securities class action on behalf of investors in the U.S. District Court for the District of New Jersey.

“Reckitt enjoyed a period of exclusivity during which no generic competitors to Suboxone Tablets could enter the market,” the class claims. “This period of exclusivity was set to end in October 2009.  While the Company’s Suboxone Tablet sales had grown to more than $260 million, Reckitt feared that it would lose almost all of those revenues to cheaper generics once the exclusivity period ended.”

According to the complaint, Reckitt’s senior executives created a scheme to switch consumers from the tablets to a new treatment the company was developing called Suboxone film, which contained similar ingredients to the tablet but with a different delivery mechanism by placing a thin film containing the drug under the tongue.

“Executives planned to create a marketing campaign that touted the purported safety benefits of Suboxone Film over Suboxone Tablets in order to prevent generic competition. Key to this campaign was fabricating safety concerns with existing treatments in order to delay the entry and approval of generics for Suboxone Tablets,” the 45-page complaint claims.

The class claims that though the FDA approved the film delivery method of the drug, it rejected Reckitt’s claim the product would protect against accidental child exposure, finding that the film was susceptible to abuse and posed greater risks to children than the tablets.

Reckitt allegedly disregarded the FDA’s findings and began a campaign to switch users to the film based on false representations regarding “diversion and misuse and pediatric safety.”

“At the same time that Reckitt was flooding the public with higher risk Suboxone Film under false pretenses, it fabricated a pediatric safety scare with existing treatments to further spur conversion to its new drug,” the complaint states.

The class claims that Reckitt then discontinued the tablets and petitioned the FDA, claiming the discontinuance was because the tablets raised “safety concerns.” According to the complaint, Reckitt executives were well aware the safety concern was a “false narrative,” but continued with its scheme to avoid financial loss once a generic version became available.

“Concurrent with this doctored FDA petition, the company engaged in a massive misinformation campaign to doctors, patients and other healthcare professionals claiming that it had discontinued Suboxone Tablets because of the risks the drug posed to children,” the class claims.

Meanwhile, Reckitt allegedly provided marketing, billing advice and dinner events for physicians known to be facilitating abuse of the drug.

In July 2017, news broke that a  £318 million charge had been leveled against Reckitt related to ongoing U.S. Department of Justice and U.S. Federal Trade Commission investigations into its former operations. News of the fines and the company’s prior scheme caused a 5 percent drop in Reckitt’s share value, according to the complaint.

Following the initial charge, the California Department of Insurance placed an additional £296 million charge due to the investigations which caused another sharp drop in the stock price falling nearly 10 percent. The DOJ later filed a criminal indictment against Reckitt. The criminal indictment detailed the multi-billion-dollar scheme to defraud investors and consumers for the sale of the film version of the drug which caused an additional 6 percent drop in the company’s share price.

Reckitt later settled the investigation into the Suboxone film sales for $1.4 billion. According to the complaint, at the time, the settlement was called the “largest opioid settlement in US history.”

Shareholders are represented by Christopher A. Seeger, David R. Buchanan and Christopher L. Ayers of Seeger Weiss LLP from Ridgefield Park, NJ.

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