Indivior Inc. and its subsidiaries have agreed to pay over $600 million to the state and federal governments to settle claims of Medicaid fraud, and criminal and civil charges. Former Indivior CEO, Shaun Thaxter, pled guilty on June 30th to a misdemeanor charge of providing false and misleading representations of Indivior’s flagship drug Suboxone to MassHealth, Massachusetts’ Medicaid program. Many of the claims against Indivior revolve primarily around Suboxone, a drug used in various forms to help recovering opioid addicts deal with the symptoms of opioid withdrawal. Suboxone itself contains buprenorphine, which is itself an opioid.
Unlike many other False Claims Act cases, this one has resulted in an admission of guilt by Indivior and its former CEO in a criminal investigation. Indivior has been selling Suboxone since 2002, and in 2012 it created a campaign to convince MassHealth that Suboxone was superior to other opioid recovery drugs. Indivior claimed that Suboxone Film, a non-pill form of the drug, had the lowest rates of accidental pediatric consumption, a misrepresentation. Shortly after, MassHealth decided to approve Suboxone Film for patients with children under the age of 6. Indivior Solutions, the marketing subsidiary of Indivior Inc., admitted that it provided this false information under the direct supervision of its top executives.
First Assistant U.S. Attorney for the Western District of Virginia, Daniel Bubar, said that “During the nationwide opioid epidemic, Indivior Solutions made false statements about Suboxone’s safety to increase its sales. In doing so, Indivior Solutions misled government health care officials and is being held accountable today for its felonious conduct.” The restitution, criminal fine, and forfeiture for the criminal side of the case is over $289 million. Indivior will enter a novel business practices agreement with the government, which will disband its Suboxone sales force, prohibit it from using data from studies in advertising Suboxone, and expand overwatch of its corporate decision making.
In the civil settlement case, Indivior will pay over $300 million to state and federal governments. The government alleges that Indivior made false claims in three different ways: influencing doctors to write unneeded prescriptions and not providing the appropriate psychological care along with Suboxone; by claiming that Suboxone Film was less susceptible to accidental pediatric exposure than tablets; and by claiming to the Food and Drug Administration that Indivior had discontinued the Suboxone tablet for safety concerns when in fact it had discontinued it to control the price of Suboxone Film artificially. Indivior also made attempts to discourage other drugs that would have become a generic Suboxone competition and would have brought down the price of its drugs.
This civil settlement resolves six qui tam, or whistleblower, lawsuits under the False Claims Act. The whistleblowers, or relators, are eligible rewards from 10 to 30% of the total money recovered by the government. The whistleblower rewards have not yet been determined. In these cases, the whistleblowers provided essential insider information that aided the government in stopping massive Medicaid fraud. Indivior knowingly designed the fraud to take advantage of addicts, one of the most vulnerable groups. This guilty plea and settlement demonstrate the effectiveness of whistleblower laws, such as the False Claims Act, in bringing huge corporations to justice for fraud.
