FTC And State Of New York Sue Martin “Pharma Bro” Shkreli For Alleged Drug Price-Fixing

Martin Shkreli, who became the poster boy for runaway drug prices in 2015, will now face price-fixing charges brought by the Federal Trade Commission (FTC) and state of New York.

Shkreli, the so-called “Pharma Bro,” used his hedge fund to purchase an old drug and raised the price from $17.50 a pill to $750. The drug, Daraprim, is a highly effective treatment for a rare, potentially fatal parasitic infection known as toxoplasmosis.

While the infection isn’t that serious in most healthy people, patients with weakened immune systems — such as people with HIV/AIDS, cancer patients, or recipients of organ transplants — can suffer deadly infections of the brain and lungs from toxoplasmosis.

Shkreli became the public face of skyrocketing drug prices even after several other drug companies were singled out for what were said to be excessive prices.

Currently behind bars

The FTC and state of New York are suing Vyera Pharmaceuticals and Shkreli, who is currently serving a prison sentence on unrelated charges. Regulators are seeking monetary damages and a permanent ban on Shkreli’s participation in the drug industry.

“Daraprim is a lifesaving drug for vulnerable patients,” said Gail Levine, Deputy Director of the Bureau of Competition at the Federal Trade Commission. “Vyera kept the price of Daraprim astronomically high by illegally boxing out the competition.”

The complaint alleges that when Vyera acquired the rights to Daraprim, the drug had been an affordable, life-saving treatment for more than 60 years. Besides jacking up the price, the defendants are also accused of maneuvering to preserve the Daraprim revenue stream by preventing other generic drugmakers from competing.

“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,” said New York Attorney General Letitia James.

Monopoly drug

James notes that Daraprim is the only FDA-approved drug to treat this rare condition. She says the action taken by her state and the federal government should serve as a warning to the industry.

“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,” she said. “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.”

The lawsuit claims that consumers and other patients who require Daraprim would have probably saved tens of millions of dollars by purchasing generic versions of Daraprim. Instead, as a result of the defendants’ anticompetitive conduct, there is no generic version on the market today.