On October 23, 2019, the New York Attorney General’s Office announced that New York and other states have reached a civil settlement agreement with Reckitt Benckiser Group (Reckitt) to settle allegations that the pharmaceutical distributor improperly marketed and promoted Suboxone (approved opioid addiction treatment) resulting in improper expenditure of Medicaid funds. Reckitt agreed to pay $700 million to settle the allegations, including those it settled with the U.S. earlier this year.
This settlement resolves the civil claims against Reckitt brought in six qui tam suits pending in federal courts in the Western District of Virginia and the District of New Jersey. It should be noted that Reckitt entered into a separate non-prosecution agreement to resolve its potential criminal liability arising from conduct alleged in the indictment of Indivior, Inc. (former Reckitt subsidiary). The two companies are no longer affiliated. Reckitt has also agreed to pay $50 million to resolve claims that it engaged in unfair methods of competition in violation of the Federal Trade Commission Act, 15 U.S.C. § 53(b) under a separate agreement with the Federal Trade Commission (FTC).
The states alleged that from 2010 through 2014, Reckitt, directly or through its subsidiaries, knowingly:
- Promoted the sale and use of Suboxone to physicians who were writing prescriptions to patients without any counseling or psychosocial support, such that the prescriptions were not for a medically accepted indication and for uses that were unsafe, ineffective, and medically unnecessary and that were often diverted for uses that lacked a legitimate medical purpose
- 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
- Submitted a petition to the Food and Drug Administration on September 25, 2012, fraudulently claiming that it had discontinued manufacturing and selling Suboxone Sublingual Tablet “due to safety concerns” about the tablet formulation of the drug
- 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 federal healthcare programs
The claims above illustrate the Government’s increased scrutiny of drug manufacturers’ marketing and promotional practices, compensation arrangements with prescribers of their products and a marked increase in the Government’s efforts to fight healthcare fraud. These high-profile enforcement actions and consent decrees highlight the necessity for manufacturers to adhere to promotional review best practices and maintain internal guidelines for interactions with health care professionals (HCPs). Pharmaceutical companies should further review applicable state and federal laws and regulations concerning interactions with HCPs, including the federal AKS, state-specific anti-kickback statutes, the federal Stark Law and the FCA before entering into arrangements with providers to avoid civil liability or potential government criminal enforcement actions as well as potential exclusion from federal health care programs.
Frier Levitt represents a broad array of health care stakeholders, including innovative drug and device manufacturers, emerging biotechnology companies, private equity and other industry participants in healthcare transactions, government investigations, and self-disclosures. Additionally, Frier Levitt advises manufacturers on proper interactions with health care professionals. Contact Frier Levitt to speak with a life sciences attorney today to ensure ethical interactions with health care practitioners and compliance with fraud, waste and abuse laws, including AKS, FCA and Sunshine Act.