"Pharma Bro" Martin Shkreli charged with fixing price of life-saving drug
The Federal Trade Commission on Monday charged former drug industry executive Martin Shkreli and Vyera Pharmaceuticals with allegedly restricting competition in order to maintain a monopoly on a life-saving drug.
Shkreli, who once earned the nickname "Pharma Bro," is currently serving a seven-year sentence for securities fraud. The FTC, joined by New York's attorney general, now says that he helped orchestrate an "elaborate anticompetitive scheme" to control the market for Daraprim. The drug is used to treat toxoplasmosis, a disease that results from infection by a parasite found in cat feces and contaminated food. It can be deadly in individuals with HIV/AIDS.
Former pharmaceutical executive Kevin Mulleady and Phoenixus AG, Vyera's parent company, are also named as defendants in the case.
"Daraprim is a life-saving drug for vulnerable patients," Gail Levine, deputy director of the Bureau of Competition at the FTC, said in a statement announcing the complaint. "Vyera kept the price of Darapim astronomically high by illegally boxing out the competition."
The FTC said Vyera, formerly Turing Pharmaceuticals, jacked up the list price of Daraprim from $17.50 a tablet to $750 each, an increase of more than 4,000%. The price hike "significantly impacted access to care," according to regulators.
The defendants moved to discourage potential competitors in the generic drug market "through restrictive distribution agreements" that prevented other drugmakers from buying samples of Daraprim, the FTC said Monday. The defendants also blocked competitors from accessing a key Daraprim ingredient, making it impossible for them to replicate the drug, according to the complaint.
Had the defendants not acted illegally, consumers could have saved tens of millions of dollars by purchasing generic versions of the drug, the complaint alleges. There is no generic version of the drug on the market today.
Vyera issued a statement Monday saying the FTC's allegations are "without merit." The pharmaceutical company claims it did not take any actions to prevent competitors from entering the market for toxoplasmosis treatment.
"These allegations are unsupported by the facts and overlook the realities in the marketplace," the drugmaker said.
Former executive Mulleady could not be located for comment.
Shkreli gained notoriety after a drug company he founded, Turing Pharmaceuticals, spent $55 million for the U.S. rights to sell Daraprim and promptly raised the price about 4,000% to $750 per pill. It was renamed Vyera in 2017.