Billion-dollar settlement gets Reckitt out of federal opioid probes

  • British consumer drug company Reckitt Benckiser said it will pay up to $1.4 billion to settle all federal investigations related to the of the opioid-dependence product Suboxone film by former subsidiary Indivior. The company denies all wrongdoing but said settling will avoid the “costs, uncertainty and distraction” of continued legal action.
  • Indivior, spun out in 2014, separately is facing a criminal indictment for Suboxone practices, and the group said it has no new information related to that activity.
  • Reckitt’s settlement is one of many now emerging from crackdowns on opioid, with Purdue Pharma and Insys paying hundreds of millions to get out from under legal threats.

The consequences of opioid over-prescribing and practices continue to be felt. In Reckitt’s case, it will need to borrow money and tap its cash holdings, which was 1.5 billion pounds ($1.9 billion) at the end of 2018, to settle charges with the U.S. Justice Department and the Federal Trade Commission.

Reckitt had anticipated having to make a settlement, putting a $400 million cost line onto its balance sheet in preparation for a deal with the federal government. Today, it said it will change that provision to $1.5 billion to account for the settlement and any remaining litigation costs.

The company said it wanted to eliminate distraction as it faces organizational change. Reckitt is in the midst of a management transition, with Laxman Narasimhan taking over as CEO from Rakesh Kapoor effective September 1. In addition, it is restructuring its health and hygiene divisions as separate operating units.

Read more:

Leave a Reply