State recovers $22.7M in Medicaid funds after settlement with Suboxone distributor

FRANKFORT, Ky. — Attorney General Andy Beshear announced today that his office has recovered $22.7 million in state and federal Medicaid dollars after reaching an agreement with a pharmaceutical distributor over its improper marketing and promotion of the drug Suboxone.

Reckitt Benckiser Group (Reckitt), a public limited company headquartered in the United Kingdom, reached the agreement with the federal government, Kentucky and other states to settle multiple allegations that the company engaged in misleading behavior that put profits over patients and resulted in losses to state Medicaid funds. More than $5.3 million will be returned to the state Medicaid program and the remainder will refund the federal Medicaid program.

Beshear said Suboxone, a partial opioid agonist, is supposed to be used to help recovering opioid addicts reduce withdrawal symptoms while they undergo treatment. Without proper counseling, the drug can be improperly used, resulting in more addiction and devastation.

“Holding pharmaceutical companies accountable has been a top priority for my office,” Beshear said. “In an effort to get more doctors to write more prescriptions for its drugs, Reckitt pushed misleading claims about their safety and effectiveness, and we are getting those wrongly acquired profits back.”

Until Dec. 23, 2014, Reckitt’s wholly owned subsidiary Indivior Inc. (then known as Reckitt Benckiser Pharmaceuticals, Inc.) distributed, marketed and sold oral medications of Suboxone sublingual tablets and Suboxone sublingual film in the United States. Sublingual tablets and films easily melt in the mouth or dissolve rapidly with little or no residue.

To absolve itself of potential criminal liability stemming from conduct alleged in the indictment of Indivior, Inc., Reckitt has entered into a separate non-prosecution agreement.

The civil settlement resolves allegations 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 unsafe, ineffective and medically unnecessary.
  • Promoted the sale or use of Suboxone sublingual film based on false and misleading claims that the film was less subject to abuse than other buprenorphine products and less susceptible to accidental pediatric exposure.
  • Submitted a petition to the Food and Drug Administration in 2012, fraudulently claiming that it had discontinued manufacturing and selling the Suboxone sublingual tablet “due to safety concerns.”
  • Took steps to fraudulently delay the entry of generic competition for various forms of Suboxone in order to improperly control pricing.

The civil settlement resolves the claims against Reckitt brought in six lawsuits pending in federal courts in the Western District of Virginia and the District of New Jersey. A National Association of Medicaid Fraud Control Units (“NAMFCU”) team participated in the investigation and in settlement negotiations.

In July, federal government officials announced that the total $1.4 billion recovery is the largest ever for a case involving an opioid drug, according to the Department of Justice. Reckitt agreed to pay the federal government and states $700 million to resolve various civil fraud allegations affecting Medicaid and other government health care programs. Reckitt will also forfeit $647 million in profits and pay the Federal Trade Commission $50 million.

Since Beshear took office, his Office of Medicaid Fraud and Abuse Control has served as a fraud watchdog for the state’s Medicaid program. Last year Beshear filed a lawsuit against the four owners of The Recovery Center, with locations in Frankfort, Hazard, Jackson, Mount Sterling, London, Paintsville and Richmond, for illegally prescribing buprenorphine or Suboxone to thousands of Kentucky Medicaid patients.

The Recovery Center owners agreed to pay $250,000 to the state through Beshear’s office for allegedly failing to provide appropriate medication-assisted treatment to Medicaid recipients.

Beshear’s Office of Medicaid Fraud and Abuse Control’s work contributed to more than $119 million in obligations to state and federal Medicaid programs, Medicare, Tricare, commercial payers and other entities.

In the last three and a half years, the office’s work has contributed to nearly 70 convictions for Medicaid provider fraud or patient abuse, neglect and exploitation.

Wednesday, Beshear also announced a $17 million consumer protection settlement with Bayer Corporation, a U.S. subsidiary of Germany-based Bayer AG, over claims that it misled Kentucky women about risks associated with its birth control drugs, Yasmin and Yaz.

In July, Beshear announced he settled a 12-year-old lawsuit against Marathon Petroleum Company and Speedway LLC over alleged gasoline price gouging for $22,500,000.

Please wait...

Subscribe to the FASTER LANE business newsletter.

Subscribe and receive breaking Kentucky business news and updates daily.