Wednesday, September 27, 2023
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Shkreli Faces Civil Lawsuit Over Huge Hike in Drug Price

Martin Shkreli, currently serving a seven-year prison sentence for securities fraud, is in legal trouble yet again.

MANHATTAN (CN) — Martin Shkreli, currently serving a seven-year prison sentence for securities fraud, is in legal trouble yet again.

On Monday, New York Attorney General Letitia James filed a joint lawsuit with the Federal Trade Commission against Shkreli for jacking up the price of life-saving drug Daraprim, then allegedly scheming to stifle the competition, during his tenure as CEO of Vyera Pharmaceuticals.

“Martin Shkreli and Vyera not only enriched themselves by despicably jacking up the price of this life-saving medication by 4,000% in a single day, but held this critical drug hostage from patients and competitors as they illegally sought to maintain their monopoly,” James said in a statement Monday.

The lawsuit, which seeks an injunction and money damages for victims, also intends to block Shkreli from ever working in the pharmaceutical industry again.

After buying the rights to the drug in 2015, Shkreli and Vyera — formerly known as Turing — immediately raised the price of Daraprim, the only treatment for the parasitic infection toxoplasmosis, from $17.50 a pill to $750 in a single day, according to the 68-page lawsuit, large sections of which are redacted.

Toxoplasmosis is particularly dangerous for pregnant women and those with weakened immune systems, and is considered by the Centers for Disease Control to be a leading cause of death by foodborne illness in the U.S.

Shkreli and Vyera, as well as parent company Phoenixus and former Vyera executive Kevin Mulleady, knew they had to act fast to preserve the resulting profits, the lawsuit alleges, since Daraprim didn’t have a patent and lower-priced generic competitors were certain to step up and take business away. All four are defendants in the suit.

That scheme to stifle competition “continues to this day,” the complaint states. The now 36-year-old Shkreli and his colleagues allegedly applied contractual restrictions that prohibited distributors from reselling the drug to generic companies, which blocked them from conducting comparison tests required by the FDA.

The defendants also allegedly cut off access to the active ingredient in Daraprim, pyrimethamine, and blocked companies from viewing data on Daraprim sales.

Shkreli’s lawyer, Benjamin Brafman, disputed the claims in a statement Monday.

“Mr. Shkreli looks forward to defeating this baseless and unprecedented attempt by the FTC to sue an individual for monopolizing a market,” he said.

Though the Daraprim price-jacking and Shkreli’s securities fraud conviction are unrelated, it is the former action for which he’s most famous and reviled. After the increase, a smirking Shkreli invoked the Fifth Amendment during a 2016 congressional hearing on rising drug prices.

“Hard to accept that these imbeciles represent the people in our government,” he tweeted during the hearing.

Shkreli was busted in spring 2019 for reportedly running company operations via smartphone from prison in New Jersey, and was placed in solitary confinement as a result.

“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,” James said in her statement Monday. “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.”

Representatives at Vyera and Phoenixus AG did not immediately return requests for comment Monday. It was not immediately clear who would represent Mulleady.

Categories / Business, Consumers, Government, Health

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