US charges drugmaker Indivior, Reckitt over opioid healthcare fraud

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US charges drugmaker Indivior, Reckitt over opioid healthcare fraud

On Wednesday, the 10th of April 2019, the US Justice Department had accused the British drugmaker, Indivior Plc of illegally boosting prescriptions for its smash hit opioid addiction treatment Suboxone. Followed by filing the accusations, the shares of Indivior Plc had sunk more than three-quarters of its stock market value, while its former parent organization, Reckitt Benckiser’s share price had also nosedived.

According to the court documents, a lawsuit had been filed against the Indivior on the federal court of Abingdon, Virginia, accusing the British multinational drugmaker of making billions of dollars by misleading healthcare benefit programs, alongside doctors that its film version of Suboxone was less susceptible to abuse than other similar drugs available in the market.

The lawsuit had charged the London-based specialty drug maker alongside its subsidiary, Indivior Inc. with health care fraud, mail fraud, conspiracy and wire fraud. According to the US Justice Department officials, the government had been seeking around $3 billion in financial penalty to settle the charges, however, the company had already rejected a previous settlement offer of $438 million related to the issue.

Court documents had also revealed that the prosecutors had been quoted saying that, apart from making false claims about its blockbuster Suboxone, Indivior’s “Here to Help” program had pushed thousands of addicts towards doctors for overprescribing the drug.

Followed by the reveal of US lawsuit, Indivior shares crash-dived to an all-time low and evaporated around $720 million of its market valuation. After falling as much as 80 percent during the intraday trading, the shares of British drugmaker listed in London’s FTSE closed the day down by 71.6 percent at 30.05 pence per share, while more than 100 million shares had changed hands, approximately 40 times of its average intra-day trading volume.

Besides, shares of former Indivior parent, Reckitt had shredded off 6.5 percent of its earlier gains made in 2019 after three tough years.