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Shareholders can seek DOJ fines returned from D&O policies to INDV. - contact jgrabar@grabarlaw.com.
In a July 24, 2020 press release, the DOJ announced a $600 million civil and criminal settlement against Indivior related to marketing the opioid-addiction-treatment drug Suboxone.
The civil settlement resolves claims from six qui tam lawsuits brought against various combinations of the Indivior entities under the False Claims Act (“FCA”). United States ex rel. Finkelstein v. Reckitt Benckiser Pharms., Inc., No. 14-cv-00059 (W.D. Va.); United States ex rel. Williams v. Reckitt Benckiser, Inc., No. 13-cv-00036 (W.D. Va.); United States ex rel. Lemons v. Reckitt Benckiser Pharms., No. 15-cv-00016 (W.D. Va.); United States ex rel. Kruszewski v. Reckitt Benckiser Pharms., Inc., No. XX-cv-XXXX [UNDER SEAL] (D.N.J.); United States ex rel. Scott v. Reckitt Benckiser Pharms, Inc., No. XX-cv-XXXX [UNDER SEAL] (N.D.J.); United States ex rel. Greene v. Indivior PLC, No. XX-cv-XXXX [UNDER SEAL] (D.N.J.). Under the civil settlement, Indivior Inc. and Indivior plc agreed to pay $300 million, with $209.3 million going to the federal government and $90.7 million going to certain participating states.
While Indivior did not admit fault in its civil settlement, the settlement resolves three main allegations. First, the DOJ alleged Indivior knowingly promoted the sale and use of Suboxone to physicians who were writing prescriptions not for a medically-accepted indication, lacked a legitimate medical purpose, were issued without counseling or psychosocial support, were for unsafe, ineffective, and medically-unnecessary uses, or were often diverted. Second, the DOJ alleged that Indivior knowingly promoted the sale or use of Suboxone Film to physicians and state Medicaid agencies using false and misleading claims that Suboxone Film was less susceptible to accidental pediatric exposure than Suboxone Tablets. And third, the DOJ alleged that Indivior tried to delay the entry of generic competition to control the price of Suboxone. Such actions allegedly included the improper submission of a petition to the FDA claiming that Suboxone Tablet had been discontinued “due to safety concerns” about the tablet formulation of the drug. As part of the criminal resolution, Indivior Solutions pleaded guilty to a one-count felony criminal information charging false statements related to health care matters, in violation of 18 U.S.C. § 1035. See United States v. Indivior Solutions, Inc., 19-cr-00016-JPJ-PMS (W.D. Va.). The plea included an admission that Indivior Solutions made false statements to promote the film version of to the Massachusetts Medicaid programs regarding its around children. The settlement includes a criminal fine, forfeiture, and restitution in the combined amount of $289 million.
The criminal resolution requires that Indivior Inc. permanently disband its entire Suboxone sales force.
Not a scam, just messaging from the U.S. See www.grabarlaw.com
As INDV had to pay $600 million in fines to the US DOJ regarding its marketing of Suboxone, in the U.S., securities law allows for shareholders to demand that the Board to seek return of fines from D&O policies as well as governance reforms. These same laws allow for shareholders to seek court approved incentive awards. These actions are not against the company, but rather for the benefit of the company and seek to bring funds back to the company (unlike class actions).
Best regards,
Joshua Grabar
The Department of Justice’s (“DOJ”) $600 million civil and criminal settlement against Indivior related to marketing the opioid-addiction-treatment drug Suboxone, combined with the prior, larger, $1.4 billion settlement with Reckitt Benckiser Group PLC, Indivior’s former parent company, inked in 2019 yield standing for longer term shareholders to bring potential shareholder derivative matters.
These matters seek to enhance corporate governance and go after D&O policies to get funds paid in fines back into corporate coffers. They often also allow for incentive awards to shareholders.
Best,
Josh
jgrabar@grabarlaw.com
https://www.justice.gov/opa/pr/justice-department-obtains-14-billion-reckitt-benckiser-group-largest-recovery-case
https://www.justice.gov/opa/pr/opioid-manufacturer-indivior-s-chief-executive-officer-pleads-guilty-connection-drug-safety