Methadone Treatment Giant Settles Wrongful Death Claim for Huge $10.5M

Methadone treatment giant New Seasons, formerly called Colonial Management Group, has settled a wrongful death claim out of South Carolina for a staggering $10.5M, one of the biggest wrongful death settlements in addiction treatment industry history.

Details of the settlement are sketchy as non-disclosure was a key requirement of the big payout. New Seasons has said however that the settlement has exhausted the limits of its liability insurance coverage. The lawsuit involved a client of its West Columbia, SC clinic who killed three people in an auto crash while under the influence of drugs.

Founded in the mid-1980s as Colonial Management Group, New Seasons has grown into a for-profit giant with about 100 clinics in 28 states. Before the introduction of Suboxone, and the growth of new MAT clinic chains in recent years, New Seasons was the biggest methadone clinic company in what was a $1B a year national methadone marketplace.

Around the year 2000, CRC Health Corp., now part of publicly traded treatment behemoth Acadia Healthcare, overtook Colonial as the largest methadone clinic operator through an aggressive acquisition rollup campaign of mom-and-pop clinics across the country.

The notion of the methadone clinic has become somewhat outdated due to the growth of Suboxone, which was developed and manufactured by the former Reckitt Benckiser Pharmaceuticals, now called Invidior. At its zenith Suboxone was a gigantic seller for Reckitt Benckiser, selling $2B a year globally, now down to $1B due to generics competition.

Last week Invidior shares tanked by over 60 percent when a New Jersey federal judge lifted a temporary injunction thereby allowing the widespread marketing of generic Suboxone, a move seen as opening the floodgates for much cheaper buprenorphine-based pharma products and the end-of-line for the monopolistic hold Invidior for years held on the buprenorphine marketplace.

New Seasons executives were not immediately available for comment.