‘Pharma bro’ Shkreli sued by US regulators for drug price hike

Martin Shkreli increased the price of a crucial drug by more than 4,000 percent in 2015 after buying rights to make it.

Martin Shkreli
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, centre, was convicted of securities fraud in 2015 for misleading investors regarding his track record and performance [File: Peter Foley/Bloomberg]

Martin Shkreli, the “Pharma Bro” in prison for defrauding investors, faces a lawsuit filed by the Federal Trade Commission and New York attorney general’s office for an alleged scheme to preserve his monopoly for the drug Daraprim, whose price was increased by more than 4,000 percent in one day.

The lawsuit was filed in Manhattan on Monday and also named Vyvera Pharmaceuticals, a company once headed by Shkreli that was formerly Turing Pharmaceuticals, as a defendant in the case.

The FTC and the New York attorney general’s office accuse the defendants of quickly raising the price of Daraprim from $17.50 per tablet to $750 in 2015 after buying rights to the crucial drug while taking steps to ensure there would not be a cheaper generic version of the medicine.

Daraprim is used to treat toxoplasmosis – a disease resulting from a parasite infection.

“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,” New York Attorney General Letitia James said in a statement. “We won’t allow ‘pharma bros’ to manipulate the market and line their pockets at the expense of vulnerable patients and the healthcare system.”

Shkreli, who is in prison in Pennsylvania, became notorious as “Pharma Bro” when he sharply raised the price of Daraprim as the chief executive of Turing Pharmaceuticals.

Vyera Pharmaceuticals said in a statement that the claims “are without merit” and it will “vigorously defend these claims in court”.

The lawsuit also names Shkreli associate Kevin Mulleady, the FTC said. The FTC and the New York attorney general’s office are seeking monetary relief for people who overpaid for the medicine and an order requiring the company to halt illegal conduct.

A lawyer for Shkreli, 36, did not respond to a request by Reuters news agency for comment. Shkreli is slated for release in September 2023, according to the Federal Bureau of Prisons.

The FTC alleged that the company protected its dominance of the drug by restricting distribution to ensure generic drugmakers could not get the samples needed to make their own version of the drug. The company also prevented potential competitors from buying one of the medicine’s ingredients, the FTC said.

The United States Supreme Court said in November that Shkreli must remain in prison, rejecting his effort to overturn his conviction and a seven-year sentence for securities fraud and conspiracy.

The justices refused to hear Shkreli’s appeal of his August 2017 conviction and $7.36m forfeiture for cheating investors in two hedge funds he founded and trying to prop up the stock price of biotechnology company Retrophin Inc, which he once ran.

Shkreli, who taught himself biology, and his company Turing Pharmaceuticals were among those included in a 2016 US Senate committee report that called for the government to stop a “monopoly business model” used by some drugmakers to raise prices on certain medications.

In Washington, the infamously sarcastic Shkreli has remained the face of increasingly high drug costs. US President Donald Trump has called the former hedge-fund-manager-turned-drug-executive a “spoiled brat”, while the presidential campaign of Vermont Senator Bernie Sanders has called him a “poster boy for drug company greed”.

Source: News Agencies