AUDIE CORNISH, HOST:
The U.S. government will collect $1.4 billion in a settlement connected to the opioid epidemic. The record amount will be paid by the British company Reckitt Benckiser. North Country Public Radio's Brian Mann joins us now with details.
Hey there, Brian.
BRIAN MANN, BYLINE: Hi, Audie.
CORNISH: So needless to say, it's not a household name 'cause I'm pretty sure I messed it up.
CORNISH: Can you tell us (laughter) about the name of this firm and about the drug that it makes that's at the center of this deal?
MANN: Right. Reckitt Benckiser made Suboxone Film. It was actually made by a division of the company called Indivior, which the parent company spun off five years ago. This is an opioid medication that's actually used to treat people recovering from addiction. You take it by dissolving it under your tongue rather than in tablet form. And back in April, Audie, the Justice Department filed criminal charges, claiming this drug was marketed using false claims that it's safer, less prone to abuse than cheaper alternative drugs. The feds said the company earned billions of dollars bilking healthcare providers and insurers, including Medicaid.
CORNISH: The $1.4 billion - what is the U.S. government going to do with that money?
MANN: Yeah. Well, most of this will go into the federal government's coffers. But interestingly here, $200 million will be divided up between any states that sign onto the settlement - the money going to reimburse their Medicaid budgets.
CORNISH: But if the company doesn't make this drug anymore and now you've got the spin-off company that makes it, why did they agree to this huge payout?
MANN: Yeah, so Reckitt Benckiser issued a statement today denying any wrongdoing. But they basically said they want to get out from under all the uncertainties stemming from possible criminal indictments and civil lawsuits tied to the epidemic. A lot of big drug companies are in this same box right now. They made billions of dollars selling opioid medications, and now they face this wave of lawsuits and possible criminal charges and a ton of harsh publicity.
CORNISH: Speaking of that wave of lawsuits, how does this fit into the other kind of payments that we've seen from drug companies this year?
MANN: Yeah. This is really kind of a year of reckoning for Big Pharma. Insys Therapeutics, Purdue Pharma, Teva Pharmaceuticals - they've agreed to pay more than half a billion dollars between them to state and federal agencies. And these shockwaves just keep rolling through the drug industry. In May, seven Insys executives were found guilty on racketeering charges. That company later declared bankruptcy. Purdue Pharma, another big player - they've talked openly about filing for Chapter 11. And Johnson & Johnson, a really big name-brand company - they're in court right now in Oklahoma. That state's attorney general is demanding $17 billion in compensation. And this is really the kind of opioid-related legal chaos that Reckitt Benckiser is hoping to leave behind.
CORNISH: Now that Reckitt Benckiser has made this deal, are they cleared from future litigation?
MANN: Well, they're not. And this is one thing that the industry is afraid of - that they'll make these big payouts and still face lingering liability. The Centers for Disease Control and Prevention reports more than 200,000 Americans have died from prescription opioid overdoses. A lot of communities have been very hard-hit, so there are a lot of potential lawsuits out there. Reckitt Benckiser is still being sued right now by dozens of states. Their attorneys general have filed those suits. Some of those states may choose to take part in this federal settlement, but others could keep fighting in court. And that could mean a push for separate settlements.
CORNISH: That's North Country Public Radio's Brian Mann. He covers opioid litigation for NPR.
Thank you so much, Brian.
MANN: Thank you, Audie.
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