Cohen Seglias is pleased to announce that partners Julie Grohovsky and Shanlon Wu helped obtain a major civil settlement between all 50 states, the District of Columbia and Puerto Rico against Indivior, PLLC. for fraud committed against Medicaid and other public health insurance programs. Under the terms of the agreement, Indivior will pay $203 million to state Medicaid programs and $90 million to the jurisdictions. This settlement is the result of six whistleblower cases filed under federal and state False Claims Acts, including one matter filed by Wu and Grohovsky against Indivior and its predecessor company Reckitt Benckiser (RB) on behalf of one of the whistleblowers. The settlement concludes a decade-long investigation by the federal and state governments into the sale and marketing of the opioid treatment therapies Suboxone Tablets and Suboxone Film by Indivior and RB.
In his press release issued about this settlement, Rob Bonta, California’s Attorney General noted, “Our country is battling a global pandemic in the midst of an ongoing opioid epidemic. Doctors and the public should be able to trust that what a company says their product can do is the truth, especially when the company claims it can be used during the treatment of something as serious as opioid addiction.”
The settlement resolves allegations against Indivior for the misleading and false marketing of the drug Suboxone. Partner Julie Grohovsky noted that, “This brings to a close one of the darkest chapters in the opioid epidemic that continues to cause significant harm and death to individuals, families and our communities.”
Partner Shanlon Wu added, “The public private partnership between the whistleblowers, Department of Justice and the state attorney generals’ offices is to be commended in bringing Reckitt Benckiser and Indivior to justice for their role in the opioid epidemic.”
This settlement, along with DOJ’s $1.4 billion civil settlement with RB entered into in July 2019, will bring the total amount recovered by the federal and state governments to more than $2 billion for the false and misleading marketing of Suboxone. As part of its July 2019 settlement, RB has also settled consumer fraud claims with the Federal Trade Commission for its marketing of Suboxone film.
The settlement resolves claims that Indivior falsely marketed Suboxone film as safer and less prone to abuse than the cheaper tablet form, knowing not only that those claims were false, but also that the film was likely to cause misuse, abuse, and diversion of the drug and to increase accidental exposure to children. Indivior’s false and misleading statements caused billions of dollars’ worth of claims to be submitted to government health care programs, including Medicare, Medicaid, and Tricare, and led to other government agencies such as the Veteran Health Administration to purchase Suboxone.
As background, the FDA approved Suboxone, which contains a combination of buprenorphine (an opioid) and naloxone (an opioid antagonist), in October 2002 to suppress opioid withdrawal symptoms as part of a complete treatment plan to include counseling and psychological support. While Suboxone was heralded as a wonder drug to help end opioid addiction, RB and later Indivior marketed the drug for uses that were unsafe, ineffective, and medically unnecessary. This marketing led to Suboxone being diverted for uses that were actually harmful to patients. These fraudulent practices drove up sales of Suboxone and the stock prices of RB and Indivior despite the medical harm to users.
Late last year, the DOJ secured criminal convictions against two Indivior executives, CEO Shawn Thaxter and former medical director Timothy Baxter, for their roles in fraudulently marketing Suboxone, and Indivior has paid criminal fines for the company’s role in falsely marketing Suboxone.