Federal Trade Commission, New York Attorney General seek lifetime ban for 'Pharma bro' Martin Shkreli for 'illegally monopolizing' drug
The Federal Trade Commission and New York’s attorney general on Monday sued incarcerated “pharma bro” Martin Shkreli and his firm Vyera Pharmaceuticals for allegedly “illegally monopolizing” the anti-parasite medication Daraprim — costing patients and other purchasers to pay tens of millions of dollars more each year than they otherwise would.
The Manhattan federal court lawsuit — which seeks a lifetime ban of Shkreli from the pharmaceutical industry — comes almost five years after he gained widespread infamy by purchasing the rights to sell Daraprim, and increasing its price to $750 per tablet, an increase of more than 5,000 percent.
The suit alleges that as recently as last August — while in prison serving a current seven-criminal sentence — Shkreli had discussions with Vyera executives taking illegal steps to thwart competitors from coming to market with an alternative to Daraprim, a decades-old drug which has no patent protection.
Daraprim is used to treat the condition known as toxoplasmosis, which is found in pregnant women, babies and people with HIV.
“Daraprim is a lifesaving drug for vulnerable patients,” said Gail Levine, Deputy Director of the Bureau of Competition at the Federal Trade Commission.
“Vyera kept the price of Daraprim astronomically high by illegally boxing out the competition.”
Shkreli due to be released in September 2023 from his sentence for financial crimes that occurred before he launched Vyera, the Manhattan-based firm that originally was known as Turing Pharmaceuticals. The suit also names as a defendant Phoenixus AG, a privately held Swiss corporation that wholly owns Vyera.
Also named as a defendant is Kevin Mulleady, a friend of Shkreli’s who is an officer and director of Phoenixus, and a former Vyera executive.The suit seeks a lifetime pharmaceuticals industry ban for Mulleady as well.
And the suit the suit seeks to enjoin Vyera’s conduct, and obtain monetary relief from the alleged victims of the company’s conduct.
The lawsuit claims that Shkreli’s company took illegal actions to prevent competitors from entering the market with competing medications after its massive price hike of Daraprim in 2015.
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“Martin Shkreli and [Phoenixus] not only enriched themselves by despicably jacking up the price of this life-saving medication by 4,000 percent in a single day, but held this critical drug hostage from patients and competitors as they illegally sought to maintain their monopoly,” said New York Attorney General Letitia James.
“We filed this lawsuit to stop Vyera’s egregious conduct, make the company pay for its illegal scheming, and block Martin Shkreli from ever working in the pharmaceutical industry again. We won’t allow ‘Pharma Bros’ to manipulate the market and line their pockets at the expense of vulnerable patients and the health care system.”
Shkreli’s lawyer Benjamin Brafman, in a statement, said, “Mr. Shkreli looks forward to defeating this baseless and unprecedented attempt by the FTC to sue an individual for monopolizing a market.”
The lawsuit said Vyera illegally restricted the sale and distribution of Daraprim to thwart generic drug-makers from buying enough of the medication to conduct tests that are necessary to get approval from federal drug regulators to market so-called bioequivalent medications.
“Vyera also prevented competitors from accessing a critical ingredient used to manufacture Daraprim,” according to a press release about the suit issued by James’s office.
“As a result of Vyera’s anticompetitive conduct, generic entry into the pharmaceutical marketplace continues to be delayed today — causing hospitals, physicians, and patients to pay exorbitant prices or otherwise be forced to make difficult treatment decisions without affordable access to the most effective treatment,” the release said.
