A PR crisis can be devastatingly costly, as drug companies are discovering from fallout over efforts to end the opioid crisis in the U.S.
The latest company to suffer tough legal developments is Invidior, which produced Suboxone Film, an opioid that was billed as safer than other similar medicines. A grand jury in Virginia has handed up a fraud indictment against the drug maker.
If convicted on the multiple counts, Invidior could face billions in dollars of penalties.
The indictment charged Indivior and its subsidiary Indivior Inc with conspiracy, health care fraud, mail fraud and wire fraud. If Indivior is convicted, the government will seek to have it forfeit at least $3 billion, the indictment said.
The British pharmaceutical company lost millions in stock value. The backlash has also touched former owner Reckitt Benckiser, which spun off the company in 2014.
The US department of justice accused Indivior of a fraud targeting people addicted to opioids. The increase in addiction to opioids has become a central issue in politics in the US and the UK in recent years, prompting intense scrutiny on pharmaceutical firms. The US president, Donald Trump, declared the opioids crisis a public health emergency in 2017.
Jody Hunt, an assistant attorney general at the DoJ, said: “Opioid addiction is a national epidemic. The indictment alleges that, rather than marketing its opioid-addiction drug responsibly, Indivior promoted it with a disregard for the truth about its safety and despite known risks of diversion and abuse.
Invidior claims the law is on the company’s side, despite the indictment.
The U.S. government badly misread the science around the drug as well as the company’s efforts to promote it, according to Howard Pien, Indivior’s chairman.
“I couldn’t be prouder of the work Indivior does to fight the opioid crisis,” he said in a statement published on the company’s website. “We wish the Justice Department had taken an alternative path, because their indictment simply can’t be justified based on any fair reading of the facts or the law.”
Invidior also tried to shift the blame to its former owner.
The Guardian reported:
However, the scandal also threatened to drag in the former parent company, Reckitt, which is listed on the FTSE 100 and has its headquarters in Slough, Berkshire. In 2018, Reckitt set aside £313m to cover any legal costs. In its annual report the firm acknowledged that final costs could be significantly higher and that it had engaged in talks with the US Department of Justice.
In a statement to the stock market, Indivior said the alleged wrongdoing had “occurred almost exclusively prior to Indivior becoming an independent company”.
Shares in Reckitt Benckiser fell by 6% on Wednesday to £60.09.
In a statement, Reckitt said: “This indictment is not against RB Group Plc or any other group company and we currently have no additional or new information in respect of this matter, apart from what has been publicly issued by the [US] department of justice and Indivior Plc.”
Reckitt Benckiser issues statement regarding the indictment against Indivior, which it spun off in 2014.
Says RB booked provision of £313m last year but potential exposure remains unclear in light of possible >$3bn court penalty against Indivior.
RB shares down 6 per cent pic.twitter.com/EFlwTUp0r0
— Alex Ralph (@alexralph) April 10, 2019
The indictment focuses on marketing tactics used by the pharmaceutical company, highlighting the tightrope that many health care marketers must walk.
Suboxone Film is a combination of two drugs, buprenorphine and naloxone. Buprenorphine belongs to the opioid family, though it has been shown not to create the euphoric effects of other pain drugs. Naloxone is an opioid-reversal agent. Together, they purportedly have the effect of satisfying some of the addictive need for opioids while curbing sensations of withdrawal.
Prosecutors said that Indivior marketed Suboxone in a way that allowed some patients to misuse the drug, and did little to stop such practices. They cited a program called “Here to Help” that they said was used to increase prescriptions.
“Indivior used the program in part to connect patients to doctors it knew were prescribing Suboxone and other opioids to more patients than allowed by federal law, at high doses, and in suspect circumstances,” prosecutors said.
Invidior denies any wrongdoing.
Indivior said those allegations were unfounded. The company “never deliberately diverted its product,” it said. “We have engaged in an extensive education campaign to teach doctors about recommended Suboxone dosing limits and patient caps and have developed a process to identify concerning prescribers, going beyond what the law requires.”
NPR looked at the big picture, noting a trend for Big Pharma.
This indictment marks an escalation in what has already emerged as a dangerous year for major drugmakers and distributors entangled in the opioid crisis. According to the U.S. Centers for Disease Control and Prevention, prescription opioid overdoses have killed more than 200,000 Americans over the last 20 years.
Companies including Purdue Pharma, Johnson & Johnson and CVS face a wave of civil lawsuits in state courts around the country. They stem from claims that Big Pharma accelerated the opioid crisis by aggressively marketing prescription painkillers and other opioid medications. The next major trial is set to begin next month in Oklahoma.
Federal prosecutors have successfully pursued criminal charges against opioid manufacturers in the past. In 2007, Purdue Pharma and three of its executives pleaded guilty and paid more than $600 million in fines and other charges after the company falsely claimed its Oxycontin medication was less addictive than other opioid painkillers.
Opioids have become a toxic issue for many brand managers, and communicators are willing to go to great lengths to avoid the negative association. Many major nonprofits in the U.S. and U.K. are spurning money from organizations tied to the opioid industry.
What do you think of Invidior’s response?