A Chesterfield County-based pharmaceutical company that makes an opioid addiction treatment drug could face up to $3 billion in penalties after a federal grand jury in Virginia indicted it for allegedly using fraudulent marketing practices to increase profits.
The indictment of Indivior comes a month after Virginia’s Medicaid agency announced that it had removed requirements that physicians receive prior authorization before prescribing the company’s Suboxone films — the drug that was the subject of the Department of Justice’s investigation — in an effort to remove barriers to treating opioid addiction in the state.
“The Department of Justice intends to hold accountable those who are in position to know the harm opioid abuse inflicts, but instead choose to profit illegally from the pain of others,” Principal Deputy Associate Attorney General Jesse Panuccio said in a statement.
Virginia Attorney General Mark Herring’s office joined federal prosecutors in the investigation.
“Our indictment alleges a wide-ranging and truly shameful scheme to put profits over the health and well-being of patients trying to manage substance use disorder and opioid dependence,” Herring said in a news release. “It’s incredibly frustrating that while we have been working to remove the stigma around medication-assisted treatment and make it more widely available, Indivior was allegedly conspiring to exploit patients, taxpayers and the expansion of [treatment].”
The Food and Drug Administration had given Indivior seven years to sell Suboxone tablets without competition from generics, a window that ended in 2009. Prosecutors said Indivior intentionally lied to doctors and others by promoting the strips as a safer alternative, just as pills containing less-expensive generic versions of the key ingredient, buprenorphine, were set to become available.
Indivior’s revenues from Suboxone film strips jumped from $83 million in 2010 to $843 million in 2014, according to the indictment.
Indivior’s stock price dropped dramatically in the wake of the indictment, closing at $30.05 a share Wednesday compared with more than $100 a share in the days before.
Indivior accused prosecutors of filing unfounded charges in a search for “self-serving headlines.”
“The company conducts more research into opioid addiction than any other company, and the products it has brought to market have helped millions of people struggling with opioid addiction,” Howard Pien, chairman of the company’s board of directors, said in a statement.
The legal action comes amid a long-standing gap in access to medications that can help Americans confront the deadliest drug epidemic in U.S. history. Opioids include both legal painkillers such as oxycodone and fentanyl and illicit drugs such as heroin.
Buprenorphine is one of only three medications approved by the FDA to treat these addictions. The others are methadone and naltrexone. Patients take these drugs to control debilitating withdrawal symptoms such as nausea, anxiety, muscle aches and pain.
Virginia, where opioid overdoses have killed more than 8,000 people since 2008, has focused in recent years on combating addiction through medication-assisted treatment like Suboxone. Studies suggest that addicts are less likely to relapse if the drug is used as part of a complete treatment program. But advocates of abstinence-only treatment programs have remained skeptical of the drugs.
Virginia’s Medicaid agency said in a statement Wednesday that it is conducting an internal review into Suboxone films, including the allegations in the federal case.
“The agency is committed to ensuring the highest quality care for our members as they seek the treatment they need for recovery,” the statement read.
The Department of Behavioral Health and Developmental Services, which oversees the state’s addiction treatment programs, said in a statement that it does not promote a specific medication, instead focusing on treatments that are supported by evidence.
However, it noted that buprenorphine products “have been found to be a useful tool in treating many individuals with opioid use disorders.”
More than 1,000 lawsuits have been filed against the makers and distributors of prescription painkillers by state and local governments, alleging the companies misled the public about the risks of opioids and encouraged overprescribing.
But companies such as Indivior that make treatments for opioid addiction had previously attracted little scrutiny from prosecutors.
Judges, prosecutors and social services workers in Southwest Virginia — where the federal indictment was filed — warned years ago that the drugs meant to help addiction had replaced heroin and painkillers as the most popular street drugs.
The indictment filed Tuesday said Indivior officials promoted the film strips as less likely to be abused by opioid addicts than tablets, and offering better protection against accidental use by children, even though the company knew those claims weren’t true.
“We need to develop a story about childhood exposures to set the stage for switching patients” from tablets to film strips, an unnamed company official wrote in an internal 2009 message, according to the indictment.
In fact, prosecutors said Indivior knew the film strips had several traits that could make them more dangerous to children than tablets, including the fact that they dissolve quicker and were “formulated to taste better.”
Pien said the U.S. Centers for Disease Control and Prevention has data showing that accidental use by children dropped significantly after Suboxone film was introduced.
“We are frankly surprised the Justice Department would indict a company for making claims the government’s own researchers believe are true,” Pien said.
The indictment also said the company lied when it announced in 2012 that it was halting production of the tablet form of Suboxone because of “concerns regarding pediatric exposure.” The primary motivation was to delay the FDA’s approval of generic forms of the tablet version, prosecutors said.
Prosecutors also said that Indivior officials knew the film strips were easier to conceal and more susceptible to smuggling than tablets.
Prison officials around the country have struggled to keep Suboxone strips from being given improperly to prisoners. A Virginia woman was arrested last year after prison guards said she hid 230 Suboxone strips in her vagina. A North Carolina man who posed as a pastor was arrested after trying to smuggle Suboxone strips into a jail by hiding them in a Bible, authorities said.
Prosecutors also alleged that Indivior steered opioid-addicted patients who sought medical assistance through an internet and phone program to doctors who company executives knew were prescribing Suboxone strips in a “careless and clinically unwarranted manner.”