Suboxone Creators Shocking Scheme to Profit Off of Heroin Addicts

The company behind Americas most popular drug to treat addicts actually claimed its pills could kill kids to get a new patent and $1 billion.”>

PHILADELPHIA In 2009, with opioid-painkiller deaths at an all time high in America, a British consumer goods company youve probably never heard of was facing a crisis of its own.

That year, Reckitt Benckisers patent for its opiate-treatment drug Suboxone expired, opening the gates for cheaper generic versions of the medication to hit the market. At stake was the loss of the companys 85 percent hold on the market for medication-assisted treatment, which was booming thanks to the growing opiate epidemic. Hundreds of millions stood to be lost from the patents expiration.

According to a massive antitrust lawsuit made public last week, thats when Reckitt Benckiser decided to destroy the Suboxone market in order to keep it.

Thirty-five states and the District of Columbia are named as plaintiffs in the suit, which was filed under seal in federal court in Philadelphia on Sept. 23.

A copy of the 92-page, partially redacted complaint describes how the company, spin-off company Indivior, and a third company called MonoSol RX gamed the pharmaceutical regulatory process using a variety of deceptive and unconscionable practices to maintain a chokehold on the emerging market for medicine-based addiction treatment.

The case against Reckitt Benckiser accuses it of product hopping, in which a company tweaks its product slightly, often without any actual improvements, and then applies for a new patent with the intent of keeping its market share intact. In Reckitt Benckisers case, the product switch was from the orange Suboxone tablets it had been successfully marketing to a new dissolvable film strip that was developed by co-defendant MonoSol RX.

The plaintiffs in the lawsuit say Reckitt Benckiser took product hopping to a nefarious new level by using feared-based messaging and sham science to illegally subvert the market for Suboxone tablets while aggressively promoting its new film variation, which was introduced in 2010 and is under patent until 2023.

The circumstances alleged in this case are particularly egregious in that, in the midst of an epidemic of opioid abuse and addiction consumers and taxpayers have had to pay more for a drug that may help to mitigate some of the problem, said George Jepsen, the attorney general of Connecticut, in a statement announcing the suit.

Reached for comment, a spokesperson for Reckitt Benckisers Suboxone division Indivior told The Daily Beast that while the company cant comment in detail about pending litigation, we disagree with a number of the claims made by the attorneys general, and we will contest this lawsuit vigorously.

Patent expiration is a conundrum faced by all drug makers and ordinarily it wouldnt be a terribly big deal for a global monolith like Reckitt Benckiserwhich generated more than $2.5 billion in revenue during the first half of 2016 through its ownership of popular brands like Lysol disinfectant, Mucinex cold medicine, and Durex condoms.

But nothing was quite like Suboxone, a blend of the painkiller buprenorphine and the opiate blocker naloxone.

Buprenorphine was first developed by Reckitt Benckiser in the 1960s and has been used to treat moderate pain for years. Since 2000, physicians have been authorized to use the drug to treat a limited number of patients for opiate dependency. By combining the drug with naloxonewhich causes the immediate onset of withdrawal symptoms if the product is inappropriately melted and injectedReckitt Benckiser made it harder to abuse, greatly broadening its appeal as a drug for treating opioid dependency.

Reckitt Benckiser won exclusive rights to market Suboxone in 2002, and prior to that had fought a laborious and costly battle to convince legislators to approve buprenorphine as a first-line treatment for opioid dependency. But since both of its active ingredients are so-called legacy drugsmeaning they are no longer individually under patentthe company was only granted a seven-year orphan drug patent for Suboxone instead of the standard 20 years given to most new drugs.

By the time it lost its monopoly, Suboxone accounted for 85 percent of all spending on medication-assisted treatment in the U.S.almost all of it subsidized by taxpayersand Reckitt Benckiser was sitting on the pharmaceutical equivalent of a goldmine.

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Thats when it got creative.

The plaintiffs accuse the company of undermining the market for generics through a multi-step scheme that began in 2010 with an aggressive effort to get prescribers to stop dispensing its own Suboxone tablets and replace them with the new film version.

Over the next two years, Reckitt Benckiser allegedly compensated doctors for being advocates of the drug, lobbied legislators on the benefits of Suboxone film, and penalized employees for not meeting sales targets for the new drug. It also raised the price of its tablets, making them more expensive than the newer film version, even though the pills are cheaper to make.

In September 2012, with generics getting closer to approval, Reckitt Benckiser announced its intention to take tablet versions of its drug off the market on the grounds that the pills posed a safety threat to children who might inadvertently eat them. On the same day it filed a Citizens Petition with the Food and Drug Administration calling on the agency to postpone approval of generics in the interest of public safety.

The company based its child-safety claims on a single study it had paid for itself. According to the plaintiffs it used the findings to sow fear among medical professionals and encourage them to dispense only Suboxone film.

According to an article in the Financial Times, the company said its study demonstrated that the risk factor for accidental ingestion by children was eight times greater in bottled tablets than in its individually packaged film. Yet its own data only showed six cases of pediatric poisoning in children under six for every million tablet doses dispensed.

Compared to the more than 20,000 deaths in 2012 from prescription opiates and heroin, pediatric poisoning from Suboxone was far from a public health crisis. A preliminary study commissioned by Reckitt Benckiser found just 46 cases of serious injury or death out of more than 2,200 accidental pediatric exposures to Suboxone tablets between 2010 and 2012which researchers described as not significantly different from poisonings from the film.

Along the way, the company racked up about a dozen antitrust lawsuits against it that were filed by would-be competitors and health care payees who say they overpaid for buprenorphine treatment.

The FDA called Reckitt Benckisers study inconclusive and noted that accidental pediatric exposure to Suboxone had actually been on the declinewhich it attributed to new labeling requirements.

After review of the clinical study report our overall conclusion is that the study was poorly designed and conducted and was not useful for demonstrating any difference in the safety profile or abuse potential of the two formulations, the FDA said in its response to the petition. The agency has determined, on the basis of data available, that withdrawal of Suboxone tablets is not necessary for safety reasons.

It went on to say that Reckitts own actions also undermine, to some extent, its claims with respect to the severity of this safety issue. Notwithstanding the availability of data showing an increasing rate of accidental pediatric exposure through at least the first part of 2010, and the first report of pediatric death in June 2010, Reckitt did not discontinue marketing of the tablets in multi-dose containers for more than two years.

The FDA rejected Reckitt Benckisers petition to essentially ban the very product it had been happily selling for seven yearsand that it continues to sell throughout Europe, where Suboxone tablets are still under patent. The company is also working aggressively to get the tablets approved for use in China, according to the suit.

The FDA further noted that timing of [Reckitt Benckisers effort]… given its close alignment with the period in which generic competition for this product was expected to begin, cannot be ignored, and referred the company to the Federal Trade Commission for possible anti-competitive behavior.

In June 2013 the FTC opened an investigation into whether Reckitt Benckiser abused public regulatory processes and fought for nearly two years to obtain more than 20,000 documents the company was fighting to withhold. That case is ongoing. In December of that year, federal agents raided Reckitt Benckisers West Virginia offices after the Department of Justice launched a criminal probe into the companys Suboxone business. That investigation continues.

Consumer advocates agree that Reckitt Benckiser broke new ground with its product-hopping scheme.

Few, if any, companies have gone as far as to pre-emptively withdraw an off-patent drug from the market to make way for a newly patented successor in the way that British-based Reckitt Benckiser Pharmaceuticals did, said Public Citizen, an advocacy group that says it exposes malfeasance in industries that threaten consumer interests.

For its part, the company stands by its actions.

We make our decisions based on how best to address the unmet needs of patients from a treatment and public health perspective, a spokesperson said via email.

Jose Sierra, an attorney with the Boston law firm Laredo Smith who advises pharmaceutical companies on ethics and compliance issues, says that doesnt pass the smell test.

I think this has a serious optics problem, he told The Daily Beast. No one bothered to tell them this is going to look terrible. I dont want to say that these guys disregarded everything for money, but I can agree it does look that way.

Indeed, if the allegations in the new lawsuit are true, Reckitt Benckiser sought to exploit the nationwide hysteria over the increasing use of opioids to line its own pockets by blocking competition and keeping prices artificially high. According to one estimate, between 2009 and March 2013 when the FDA finally approved generic buprenorphine/naloxone, Suboxone generated more than $1 billion in annual sales, or 20 percent of the companys profit base, and 3 million Americans had been treated with the drug.

Three weeks after the first generics hit the market, Reckitt Benckiser made good on its promise to withdraw tablets from the U.S. market. Against the odds, the off-brand drugs have managed to chip away at Reckitt Benckisers market for addiction treatment drugs.

According to a recent investor presentation by Indivior (PDF), generics now make up about 20 percent of the market for buprenorphine treatment.

But that hasnt really translated into a payoff for consumers. There are only four alternatives to Suboxone for sale in the U.S. market. And none of them can be substituted for the brand name. Thats because two of themZubsolv and Bunavailarent really generic at all. They contain different dosages of the active ingredients than Suboxone, making them more like alternative brands.

The other twodeveloped by the the pharmaceutical companies Amneal and Actavis, share the same drug formulation as Suboxone tablets, but since Reckitt Benckiser no longer sells tablets in the U.S., pharmacists cant substitute the generics for the branded version (as they are required to do under many state laws). The fact that generic Suboxone has any market at all is primarily due to health insurers like CVS Caremark and United Healthcare dropping the branded version from their formularies in favor of ostensibly cheaper generic equivalents.

Partly as a result of limited competition, however, prices for both Suboxone and its generic alternatives remain highwith treatment ranging from $200-$500 a month per patient.

For the approximately 15 percent of patients who pay for the drug in cash, the financial burden is even steeper.

Dosing guidelines recommend a maintenance dose of 16mg of buprenorphine a day, the equivalent of two standard Suboxone films. A pharmacy in North Philadelphia quoted The Daily Beast a cash price of $10 a pill for the generic version made by Amneal Pharmaceuticals.

Meanwhile, due to limited choices and delayed competition, to many patients and doctors, Suboxone has become synonymous with any treatment involving the buprenorphine/naloxone combination.

A nurse at one North Philadelphia drug-treatment clinic that dispenses Suboxone said she had never heard of the drugs Zubsolv or Bunavail when visited recently by The Daily Beast.

An addiction doctor in Philadelphia, who asked that his name be withheld, said he defaults to writing Suboxone prescriptions unless a patient specifically asks for something else. Out of 118 patients, only about five take something other than brand-name Suboxone, he said.

A representative from the company that makes Bunavail visited me and I tried recommending it to patients but they dont want to switch, he said. Its like patients are paranoid it wont be the same, or something. Theres a lot of misinformation on the street.

Whether Reckitt Benckiser was illegally gaming the system or simply practicing good business will now be decided in a courtroom in Philadelphia. States could recoup millions if it is determined that the company violated antitrust laws.

Legal experts disagree about whether product hopping is a crime. The Federal Trade Commission has argued that it can be if it has the effect of coercively undermining consumer choice. The agency has recommended that extra scrutiny be placed on the pharmaceutical industry where the potential for anticompetitive product redesign is particularly acute.

Yet courts have been reluctant to bring the hammer down on the practice of product hopping, and the cases that have been litigated appear to fall in Reckitt Benckisers favor.

Just days after the multi-state suit against Reckitt Benckiser was made public, a federal appeals court upheld the legality of product hopping in an ongoing antitrust case filed by Mylan against its competitor Warner Chilcott.

The judge overseeing the Suboxone antitrust litigation apparently thinks it has merit. In rejecting Reckitt Benckisers motion for a summary judgment in a related antitrust case in 2014, Judge Mitchell Goldberg wrote:

The the facts presented sufficiently allege that the disparagement of Suboxone tablets took place alongside coercive measures. The threatened removal of the tablets from the market in conjunction with the alleged fabricated safety concerns could plausibly coerce patients and doctors to switch from tablet to film.

Whatever the outcome, Reckitt Benckiser will have a difficult time shaking the public relations impact of the accusations against it. But if recent scandals have taught us anything, its that in the pharmaceutical industry, image is rarely as important as profits.

Correction, 10/05/16, 1:20 p.m.: Indivior is not a subsidiary of Reckitt, it was spun off from Reckitt’s buprenorphine division in 2014 as a standalone company, with Shaun Thaxter, the head of Reckitt Benckiser Pharmaceuticals, named as CEO.

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