Shares of the British drugmaker Indivior (INDV.L) plunged early on Wednesday after the firm said that it disputes allegations made by a grand jury in the Western District of Virginia surrounding a federal criminal investigation and plans to contest them.
Indivior said on Tuesday that a grand jury in the Western District of Virginia had issued an indictment in connection with the federal criminal investigation initiated by the Department of Justice in December 2013.
The indictment includes 28 felony counts – one count of conspiracy to commit mail, wire and health care fraud; one count of health care fraud; four counts of mail fraud; and twenty-two counts of wire fraud.
Indivior said that the government had claimed that it had aided “the careless and clinically unwarranted prescribing” by doctors of SUBOXONE products to too many people or in too high doses. It said that “to the contrary, we have engaged in an extensive education campaign to teach doctors about recommended SUBOXONE dosing limits and patient caps and have developed a process to identify concerning prescribers, going beyond what the law requires”. It said that it had never deliberately diverted its product.
Indivior said that the allegations are based on actions that occurred almost exclusively prior to Indivior becoming an independent company in its demerger from Reckitt Benckiser Group plc at the end of 2014. The company went on to say that it believes the allegations are unsupported by the facts and the law. Key allegations have been contradicted by the US government’s scientific agencies, the Food and Drug Administration and the Centers for Disease Control, it said.
The company went on to say that it cannot predict the timing of the case with certainty, stating that similar cases could take twelve months or more to be heard. “While the company believes that it will successfully defend itself against the government’s allegations, an adverse verdict may have a material adverse effect on the company and its financial position and outlook,” Indivior’s statement said.
“We have turned over millions of pages of documents and spent extensive time explaining the company’s operations to the department,” Indivior stated. “In the interest of resolving this matter and providing certainty to our shareholders, we have made numerous attempts to reach a settlement that went far beyond what we believe the facts of this case support. It is unfortunate the Justice Department decided to choose an alternative path, but we will fight these allegations on the facts and on the law in court, and we are confident of our position,” it added.
The jury’s indictment is another blow to the company, whose earnings are already under pressure from competitive generic drugs.
In February, Indivior’s US affiliate introduced an authorized generic version of its best-selling opioid addiction drug after the US Supreme Court lifted selling restrictions for two rivals, putting the company’s top and bottom lines at risk.