US regulators sue ‘pharma bro’ Shkreli over drug monopoly
The US Federal Trade Commission (FTC) and New York’s attorney general have sued incarcerated ‘pharma bro’ Martin Shkreli for allegedly monopolising the market for life-saving drug Daraprim (pyrimethamine).
The lawsuit, filed yesterday, January 27, accuses Shkreli and his company Vyera Pharmaceuticals of engaging in an anticompetitive scheme to preserve a monopoly for anti-parasite medication Daraprim.
New York attorney general Letitia James said the suit is partly to block Shkreli from “ever working in the pharmaceutical industry again”.
“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,” said James.
According to the claim, in 2015, Vyera (previously known as Turing Pharmaceuticals) acquired the US rights to Daraprim from the only existing supplier and immediately raised the price from $17.50 to $750 per tablet.
“Instead, toxoplasmosis patients who need Daraprim to survive have been denied the opportunity to purchase a lower-cost generic version, forcing them and other purchasers to pay tens of millions of dollars a year more for this life-saving medication,” alleged the claim.
Shkreli’s price hike ensured his infamy. He became a household name and was dubbed by the “pharma bro” and “most hated man in America”.
Later that same year, Shkreli was arrested by the FBI after a federal indictment was filed, charging him with securities fraud.
Shkreli was convicted on two counts of securities fraud and one count of conspiring to commit securities fraud and, in 2018, was sentenced to seven years in federal prison and up to $7.4 million in fines.
The FTC’s suit alleged that as recently as August 2019 (while in prison) Shkreli had discussions with Vyera executives about limiting all sales of Daraprim to one bottle at a time in order to prevent a generic competitor from obtaining sufficient Daraprim samples to conduct bioequivalence testing.
The suit claimed that Vyera illegally restricted the sale and distribution of its own drug to prevent generic drug makers from obtaining sufficient pills to complete bioequivalence tests, necessary to obtain approval by the Food and Drug Administration.
Daraprim is on the World Health Organization’s essential medicines list because it treats toxoplasmosis, an infection that is dangerous to pregnant women, people with compromised immune systems, and the elderly.
“Daraprim is a lifesaving drug for vulnerable patients,” said Gail Levine, deputy director of the bureau of competition at the FTC. “Vyera kept the price of Daraprim astronomically high by illegally boxing out the competition.”
In addition, the defendants allegedly signed “data blocking” agreements preventing several distributors from selling Daraprim sales data to third-party data reporting companies.
The FTC is seeking monetary relief to provide redress to purchasers who have overpaid for the drug, in addition to injunctive relief to restore competitive conditions to the market. It is also seeking to halt any ongoing anticompetitive conduct and to prevent the defendants from engaging in similar conduct in the future.
James concluded: “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.”
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