Investor’s Class Action Claims Reckitt Benckiser Lied About Safety of Opioid Addiction Treatments

New to ClassAction.org? Read our Newswire Disclaimer

Out of New Jersey federal court comes a proposed class action filed against Reckitt Benckiser Group PLC and four executives by an investor who claims the consumer goods conglomerate misled shareholders about the safety of two opioid addiction treatments.

The lawsuit begins by explaining that the pharmaceutical arm of UK-based Reckitt Benckiser developed an opioid addiction treatment known as Suboxone tablets and obtained approval from the FDA to sell the product exclusively until October 2009, when generic competitors would be permitted to enter the market. In order to curtail the decreased revenue that would inevitably occur with the availability of cheaper generic alternatives, the defendants allegedly formulated a plan to condemn Suboxone tablets (and their generic versions) as unsafe, while launching a newly developed product—Suboxone film.

“Suboxone Film had similar active ingredients to Suboxone Tablets, however it was dispensed in a thin film placed under the tongue and stored in single-use foil wrappings,” the complaint explains.

Reckitt executives, according to the lawsuit, planned to prevent generic competition for Suboxone tablets by engaging in an aggressive marketing campaign that focused on the purported safety benefits of Suboxone film. “Key to this campaign,” the suit states, “was fabricating safety concerns with existing treatments in order to delay the entry and approval of generics for Suboxone Tablets.”

Beginning in 2010, the defendants launched a marketing campaign for Suboxone film based on claims that it was a “safer” treatment for opioid addiction that had a “lower risk of child exposure” than Suboxone tablets. In reality, the case alleges, the opposite was true. In fact, Reckitt’s own internal documents reportedly revealed that Suboxone film presented an even greater risk of child exposure because the film is designed to dissolve once placed in the mouth and would be impossible to remove from a child’s system, unlike tablets.

“In other words,” the case reads, “internally the Company and its executives recognized that Suboxone Film potentially posed an increased risk of harm to children because once ingested, children would almost invariably suffer exposure to a full dose.”

In 2012, the lawsuit continues, the contractors hired by Reckitt to study the child safety profile of both drugs concluded that “there was no basis to determine that Suboxone Film was safer than Suboxone Tablets.” Nevertheless, Reckitt executives allegedly released their own version of the report—which the suit says a manager had condemned as a “worthless, empty shell”—and altered the findings to support their own claims about the safety of Suboxone film.

Not long after, Reckitt reportedly discontinued Suboxone tablets, citing “safety concerns.”

It wasn’t until July 2017 that the truth began to be revealed, according to the lawsuit. On July 24, Reckitt, which by this time had separated from its pharma division, announced that it had recorded a £318 million charge related to ongoing investigations by the U.S. Department of Justice (DOJ) and U.S. Federal Trade Commission (FTC) into its former Reckitt Pharma operations. The stock market responded negatively to this announcement, the suit says, with a five-percent drop in the price of Reckitt American Depository Shares (ADS).

The company’s stock price declined another 10 percent in February 2018, the lawsuit alleges, when Reckitt announced an exceptional charge of £296 million related to the investigations, which at that time also came to involve the California Department of Insurance.

On April 9, 2019, the DOJ reportedly filed a criminal indictment against Reckitt Benckiser Pharmaceuticals (now known as Indivior PLC) over its allegedly deceptive marketing and sale of Suboxone film, which the case says spurred a more than six-percent stock drop. Reckitt recently settled with the DOJ for an unprecedented $1.4 billion, which the suit calls “the largest opioid settlement in US history.”

The lawsuit claims Reckitt investors lost money as a result of the company’s misrepresentations and are owed restitution. The case looks to cover a proposed class of purchasers of Reckitt ADSs who bought shares between July 28, 2014 and April 9, 2019.