Martin Shkreli is sued by the FTC and NY attorney general for illegally cornering a market
More than four years after Martin Shkreli incensed Americans by raising the price of a life-saving medicine by more than 4,000%, the Federal Trade Commission and the New York attorney general sued the infamous “pharma bro” for trying to corner the market for such drugs. The joint action accused Shkreli and Vyera Pharmaceuticals, which was formerly known as Turing Pharmaceuticals, of scheming to “illegally” prevent would-be generic competitors from selling a version of Daraprim. Shortly after purchasing the decades-old drug, which is the only drug approved in the U.S. to treat a serious parasite infection that afflicts people with HIV, the list price was raised from $17.50 to $750 per tablet.
The lawsuit argued that Shkreli and Vyera knew the price hike would attract generic rivals, so they used various means to block lower-cost alternatives from coming to market. One method involved distribution agreements that ensured generic companies could not buy samples of Daraprim that would be needed for testing required for regulatory approval from the Food and Drug Administration. Another tactic involved what were called “data blocking” agreements that prevented several distributors from selling Daraprim sales data to third-party data companies. Generic companies rely on this data to assess whether a given development project is worth pursuing. With these agreements, Shkreli and Vyera sought to keep potential generic competitors from accurately assessing the market. As a result, consumers and other Daraprim purchasers would likely have saved tens of millions of dollars by buying generic versions of the medicine, according to the lawsuit. Meanwhile, there is no generic version available today.
“Daraprim is a lifesaving drug for vulnerable patients,” said Gail Levine, deputy director of the Bureau of Competition at the FTC, in a statement. “Vyera kept the price of Daraprim astronomically high by illegally boxing out the competition.” The commission voted 5-to-0 in favor of filing the lawsuit. “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 New York Attorney General Letitia James in a statement. “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.”
We asked Vyera for comment and will update you accordingly. We will also pass along any reply we receive from attorneys who represent Shkreli. The lawsuit also named Kevin Mulleady, a former Shkreli associate who allegedly was directly responsible for orchestrating the anticompetitive scheme, as well as Phoenixus, the Vyera parent company.
https://www.statnews.com/pharmalot/2020/01/27/martin-shkreli-is-sued-by-the-ftc-and-ny-attorney-general-for-illegally-cornering-a-market/
https://www.ftc.gov/news-events/press-releases/2020/01/ftc-ny-attorney-general-charge-vyera-pharmaceuticals-martin?utm_source=govdelivery
https://ag.ny.gov/press-release/2020/attorney-general-james-sues-pharma-bro-martin-shkreli-and-vyera-pharmaceuticals