Pharma arm too reliant on heroin addict drug

RECKITT Benckiser’s pharmaceuticals (RBP) arm has always been an odd fit for the rest of the company, which specialises in big bright cleaning brands like Harpic and Finish dishwasher tablets. The drugs division is interested in something altogether darker: heroin addiction.

Things aren’t looking good for Suboxone, RBP’s drug for opiate addicts. It lost US patent protection in October 2009 and a raft of cheaper generics are around the corner.

Reckitt has had some success moving users of Suboxone off tablets and on to a film version, which is still under patent, that is placed under the tongue. If a patient has a prescription for the film variant, the pharmacy can’t dispense cheaper generic tablets. Forty-one per cent of users now take the drug this way, although analysts had hoped for a faster pace of conversion.

US insurance companies are unlikely to agitate for policyholders to take cheaper tablets either. The cost of failure – rehab, trips to the emergency room etc – is far greater.

Management is hopeful that a range of other dependency drugs it has in development – which treat addiction to alcohol, cannabis, and cocaine – could replace the profits lost from Suboxone, although none of these will hit the market until 2018 at the earliest.

We’re still uneasy about RBP’s reliance on one drug, however. The medicine accounts for virtually all of the division’s revenues, which stood at £320m in the first half and represents almost a quarter (22 per cent) of group operating profits. It is about as dependent on Suboxone as its customers were on heroin.