Martin Shkreli, center, former hedge fund manager, arrives at federal court in Brooklyn in 2017. Photo: Peter Foley/Bloomberg
The Federal Trade Commission and New York Attorney General Letitia James on Monday sued disgraced pharmaceutical executive Martin Shkreli and his former company for "illegally monopolizing" the market for a drug used to treat potentially fatal parasitic infections.
The lawsuit, filed in Manhattan federal court, accused Shkreli and Vyera Pharmaceuticals of blocking generic competition for the drug, Daraprim, so that the company could later raise its price by more than 4,000 percent—to $750 per pill— in August 2015.
The suit seeks the return of millions of dollars in illegally obtained profits, as well as an order permanently barring Shkreli and his former business partner, Kevin Mulleady, from ever working in the pharmaceutical industry ever again.
"Martin Shkreli and Vyera 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," James said in a prepared statement.
Shkreli is serving a seven-year prison sentence after a federal appeals court last year upheld his conviction on unrelated charges that he defrauded investors in two of his hedge funds.
But it was Shkreli's work as CEO of Vyera which first propelled the young executive to notoriety and earned him the moniker of "Pharma Bro" and, briefly, the "most hated man in America."
In her lawsuit, James said that Daraprim, which is also used to treat HIV, had been "cheap and accessible" for decades, until Turing purchased the drug and then dramatically raised its price overnight. According to the complaint, the firm laid the groundwork for the price spike by restricting the distribution of its own drug and blocking generic competitors from accessing a key ingredient.
Hospitals, physicians and patients, James said, were still feeling the effects of the alleged anti-competitive scheme in the form of "exorbitant prices" and difficult treatment decisions.
"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," James said.
Vyera's press shop did not immediately respond to an email Monday afternoon seeking comment on the lawsuit.
An online docket-tracking service did not immediately list representation for Shkreli.
The AG's office said that it began investigating Vyera shortly after Daraprim's price soared in 2015 and later shared its findings with the FTC, culminating in the filing of Monday's lawsuit. The FTC voted 5-0 to authorize the filing of the complaint, the commission said in a statement.
"Daraprim is a lifesaving drug for vulnerable patients," said Gail Levine, deputy director of the FTC's Bureau of Competition. "Vyera kept the price of Daraprim astronomically high by illegally boxing out the competition."
The case, captioned FTC v. Vyera, has been assigned to U.S. District Judge Denise L. Cote of the Southern District of New York.
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Tom McParland
Tom McParland of New York Law Journal can be contacted at [email protected]. Follow him on Twitter @TMcParlandALM.
