Martin Shkreli faces another lawsuit, this time from insurer, alleging plans to create a monopoly for Daraprim
The notorious “Pharma Bro” Martin Shkreli prompted national outrage in 2015 when he and then-Turing Pharmaceuticals raised the price of Daraprim, the “gold standard” treatment of the parasitic infection toxoplasmosis, from $17.50 to $750 per tablet. Despite this, he was ultimately jailed in 2017 for unrelated securities fraud charges for misleading investors in one of his other companies, Retrophin.
Now, though, a prominent insurance company is taking Shkreli to court over the Daraprim uproar, alleging a scheme to create a monopoly for the drug and block generic competition.
Blue Cross Blue Shield of Minnesota is suing Shkreli and Turing-turned-Vyera Pharmaceuticals over plans to utilize what are known as “resale restrictions,” preventing producers of potential Daraprim generics from obtaining the necessary samples of the drug needed for FDA evaluation.
Shkreli, Vyera and the other defendants named — the Swiss biotech Phoenixus and its CEO Kevin Mulleady — also allegedly tried to buy up all the supply of Daraprim’s active ingredient pyrimethamine, and refused access to the Daraprim sales data needed to determine whether a generic product would be commercially viable.
All of this happened, the lawsuit says, while Shkreli made repeated public comments about how Vyera “welcomed” generic competition. Shkreli and the other defendants also hatched their scheme before instituting the price hike, according to the suit.
“Absent Defendants’ anticompetitive and deceptive conduct, multiple generic competitors would have entered the Daraprim market sooner and at lower prices, rendering Defendants’ price hike unsustainable — such that they would not have pursued it in the first place,” the suit says.
Bloomberg was among the first to report on the lawsuit, which was filed last Thursday.
This is not the first suit Shkreli is facing over alleged anti-competitive tactics. In January 2020, the FTC and the state of New York made similar accusations into Shkreli’s activity, and are aiming to bar him and Mulleady from the pharmaceutical industry permanently.
Shkreli also allegedly ran parts of his business while serving his prison sentence using a contraband cell phone and through emails sent via the prison system. The FTC is seeking to render the latter communications as unprivileged, saying the emails took place on monitored prison servers and thereby voiding attorney-client privilege, the regulatory body said last August.
Then in December, Shkreli came under scrutiny again after allegedly trying to manipulate Phoenixus’ board of directors for his own personal gain, handpicking board members he knew would operate in his interests. Phoenixus is the parent company of Vyera, which is also based in Switzerland.
Toxoplasmosis is caused by a parasite most often found in cat stool, and rarely causes symptoms in healthy individuals. But the disease can prove deadly for those with compromised immune systems, such as people with HIV/AIDS and pregnant women.