NEW JERSEY – Attorney General Gurbir S. Grewal announced Thursday that New Jersey and other states have reached an agreement with the pharmaceutical company Indivior plc and its subsidiary Indivior Inc. (collectively “Indivior”) to settle allegations that Indivior falsely and aggressively marketed and otherwise promoted the opioid addiction treatment drug Suboxone, resulting in improper expenditures of state Medicaid funds.
Indivior will pay a total of $300 million to resolve various civil fraud allegations impacting Medicaid and other government healthcare programs, of which more than $203.7 million will go to Medicaid. Approximately $90 million of this amount is to be paid to the fifty states, plus Washington D.C. and Puerto Rico, as their share of the Medicaid recovery.
As part of the settlement, New Jersey will receive nearly $3.1 million in restitution and other recoveries, with nearly $2.8 million being returned to the State itself.
“As we continue to battle the opioid epidemic across our state, we expect pharmaceutical companies to be honest and transparent in marketing the products that health care providers and individuals rely on for addiction treatment,” Grewal said. “We will continue working with law enforcement agencies at all levels to bring to justice any individual illegally profiting from the addiction crisis that is claiming lives and devastating families in our state.”
The settlement resolves allegations that Indivior knowingly promoted the sale and use of Suboxone to physicians who were writing prescriptions that were not for a medically accepted indication, and that the company knowingly used false and misleading statements to market its new “Suboxone Film,” a sublingual form of the drug that is ingested under the tongue.
Suboxone is a drug product approved to suppress opioid withdrawal symptoms as part of a complete treatment plan for opioid-use disorder that includes counseling and psychosocial support. Suboxone contains buprenorphine, a powerful opioid.
Indivior Inc. (formerly known as Reckitt Benckiser Pharmaceuticals, Inc.) is a Delaware corporation headquartered in Richmond, Virginia, and is a wholly owned subsidiary of Indivior plc. The civil settlement resolves allegations that from 2010 through 2015, Indivior, directly or through its subsidiaries:
- promoted the sale and use of Suboxone to physicians who were writing prescriptions that were not for a medically accepted indication in that they lacked a legitimate medical purpose, were issued without any counseling or psychosocial support, were for uses that were unsafe, ineffective, and medically unnecessary, and that were often diverted;
- knowingly promoted the sale or use of Suboxone Sublingual Film based on false and misleading claims that Suboxone Sublingual Film was less subject to diversion and abuse than other buprenorphine products. and that Suboxone Sublingual Film was less susceptible to accidental pediatric exposure than Suboxone Sublingual Tablets; and
- submitted a petition to the Food and Drug Administration on September 25, 2012, fraudulently claiming that Suboxone Tablet had been discontinued “due to safety concerns” about the tablet formulation of the drug, and took other steps to fraudulently delay the entry of generic competition for various forms of Suboxone in order to improperly control pricing of Suboxone, including pricing to the states’ Medicaid programs.
The civil settlement resolves the claims against Indivior brought in six qui tam lawsuits pending in federal courts in the District of New Jersey and the Western District of Virginia.
“Indivior fraudulently obtained billions of dollars in revenue from prescriptions of its new opioid-addiction treatment medication by deceiving health care providers and health care benefit programs in New Jersey and other states,” said Tracy M. Thompson, Acting Insurance Fraud Prosecutor. “This settlement holds the company accountable for defrauding New Jersey’s taxpayer-funded Medicaid program and callously manipulating individuals seeking treatment for their opioid addictions.”
Regarding the federal criminal case against Indivior, on July 24, 2020, Indivior Solutions pleaded guilty to a one-count felony information and, together with its parent companies Indivior Inc. and Indivior plc, agreed to pay a total of $289 million to resolve criminal liability associated with the marketing of Suboxone. In its guilty plea, Indivior Solutions admitted to making false statements to promote Suboxone Film to the Massachusetts Medicaid program relating to the safety of Suboxone Film around children.
On November 12, 2020, U.S. District Judge James P. Jones of the Western District of Virginia sentenced Indivior Solutions to pay $289 million in criminal fines, forfeiture, and restitution. In addition to the criminal and civil resolutions, Indivior executed a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services-Office of Inspector General, requiring Indivior to implement numerous accountability and auditing provisions.
On June 30, 2020, Indivior plc’s former CEO Shaun Thaxton pleaded guilty to a one-count misdemeanor information related to the same conduct. On October 22, 2020, the court sentenced Thaxton to a six-month term of incarceration and $600,000 in criminal fines and forfeiture. On August 26, 2020, Indivior’s former medical director, Tim Baxter, pleaded guilty to a one-count misdemeanor information related to the same conduct, conduct for which he was sentenced on December 17, 2020 to six months home detention, 100 hours of community service, and a $100,000 criminal fine.
This present settlement follows the Reckitt Benckiser Group plc (“Reckitt”) $1.4 Billion settlement with the federal government and the states in 2019, which resolved Reckitt’s potential criminal and civil liability related to substantially similar allegations involving Suboxone. The 2019 settlement resulted in a total civil settlement of 700,000,000.00, of which $400,000,000.00 was paid to the federal and state governments to resolve Medicaid fraud allegations resolved in the settlement.
A National Association of Medicaid Fraud Control Units Team participated in settlement negotiations. The Team included representatives from the Offices of the Attorneys General for the states of California, Indiana, New York, Ohio, Virginia, and Washington, and is the same team that earlier worked on the Reckitt settlement.
New Jersey’s Medicaid Fraud Control Unit receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling approximately $3.8 million for Federal fiscal year (“FY”) 2021. The remaining 25 percent, totaling approximately $1.3 million for FY 2021, is funded by New Jersey.