Reckitt in $1.4bn settlement over US opioid treatment probe

Consumer goods giant Reckitt Benckiser said it has agreed to pay up to $1.4bn to settle US investigations into the sale and marketing of an opioid addiction treatment by its former pharmaceuticals business Indivior.

The US Justice Department (DoJ) had accused the company of illegally boosting prescriptions for the treatment, called Suboxone Film.

UK-based Reckitt, whose brands include Dettol, Durex, Nurofen and Cillit Bang, spun off the Indivior business in 2014.

The group said it had now reached agreements with the DoJ and the Federal Trade Commission (FTC) to resolve their investigations.

It means the company has had to raise the amount of money set aside to cover the cost of the probe to $1.5bn from an earlier provision of $400m.

In a statement, it said: “While RB has acted lawfully at all times and expressly denies all allegations that it engaged in any wrongful conduct, after careful consideration, the board of RB determined that the agreement is in the best interests of the company and its shareholders.

“It avoids the costs, uncertainty and distraction associated with continued investigations, litigation and the potential for an indictment.”

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Credit Suisse analyst Alan Erskine said: “$1.4bn is materially larger than the $400m RB had previously provisioned and represents c2% of its market cap.

“On the other hand this settlement removes some uncertainty from the investment case.”

The DoJ had alleged, in an indictment filed earlier this year, that Indivior made billions of dollars by deceiving doctors and healthcare benefit programmes into believing the film version of Suboxone was safer and less susceptible to abuse than similar drugs.

Indivior said at the time that the indictment was “wholly unsupported by either the facts or the law”.

The case was brought amid a US opioid addiction epidemic which has killed tens of thousands of people annually.

Source: SKY NEWS

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