RB fears Indivior legal battle cost could 'significantly' pass $400m

By Hull Daily Mail | Posted: 8 May 2019

RB has warned a legal battle it could become embroiled in surrounding Indivior could cost “significantly” more than the $400m it previously set aside.

Indivior, which has a £23m research centre in Priory Park in Hessle, is locked in a dispute with a rival firm over the sale of a similar product to one it manufactures.

The company also faces 28 fraud charges involving a marketing scheme used to boost prescriptions of its opioid addiction drugs.

Indivior was owned by health giant RB, which has a base in Dansom Lane in Hull, until 2014. The fraud charges date back to before the company was de-merged from RB.

The legal battle now threatens to engulf RB, which said in recently-filed accounts the $400m it had set aside to cover any fallout may not cover the cost.

Indivior's facility in Henry Boot Way, Hull

RB said: “The Group remains involved in ongoing investigations by the US Department of Justice (“DoJ”) and the US Federal Trade commission and related litigation proceedings in the US, arising from certain matters relating to the RB Pharmaceuticals (“RBP”) business prior to its demerger in December 2014 to form Indivior PLC…

“These investigations and related proceedings are continuing and the Group has been in discussions with the DoJ.

“The Group made a provision of $400 million in H1 2017. The Group remains committed to ensuring these issues are concluded or resolved satisfactorily but we cannot predict with any certainty whether we will be able to reach any agreement with the DoJ or other parties who are involved in any other investigation or related proceedings.

Read more: RB to unveil new £105m Hull research centre 'by end of June'

“The final cost for the Group may be substantially higher than this provision.

“This indictment is not against Reckitt Benckiser Group plc or any other group company.”

Indivior unveiled its state-of-the-art facility in Henry Boot Way in August 2017. 

The centre is focused on research and innovation into drugs which can help people battle opioid addiction and schizophrenia.

Watch: Indivior opens £23m research centre in Hull

But a series of redundancies have hit the centre in recent months, as Indivior remains locked in a legal dispute with rival firm, Dr Reddy’s Laboratories, over its sale of a similar product called Suboxone in the US.

It faces a fine of up to $3bn after a grand jury in the Western District of Virginia issued an indictment of 28 fraud charges.

The felonies, issued in connection with a federal criminal investigation initiated by the US Department of Justice in 2013, detail a host of allegations including conspiracy to commit mail, wire and healthcare fraud.

Read more: Indivior shares tumble as company faces $3bn fine over 28 fraud charges

Indivior recently released its financial results for the first three months of 2019.

In it, the company recorded “a solid performance,” but again acknowledged the launch of a rival product for its Suboxone drug.

Sales at Indivior dropped to $238m in the first quarter of the year, compared to $255m at the same time in 2018.

Operating profits also fell from $116m to $75m.



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