Martin Shkreli to go toe-to-toe with new FTC chair over Daraprim price spikes
Much ink has been spilled over “Pharma Bro” Martin Shkreli, the entrepreneur who raised the price of a lifesaving antiparasitic more than 55-fold overnight and is currently serving a seven-year prison sentence for securities fraud.
But he’s also facing antitrust charges from the FTC and the agency’s new chair Lina Khan, and a court date has finally been set for the case.
Shkreli has been ordered to appear in person for the antitrust trial on Dec. 14, as Khan looks to bring the hammer down on what the FTC alleges were monopolistic practices by Turing Pharmaceuticals, now Vyera. Regulators have asserted that Vyera attempted to buy up most — if not all — supply of the drug that catapulted Shkreli into infamy, Daraprim, in order to prevent generic competition.
Arguments will be heard in the Southern District Court of New York. Shkreli’s holding company Phoenixus, as well as former director Kevin Mulleady, were also implicated in Wednesday’s order.
The saga began in January 2020, when the FTC first sued Shkreli and Vyera for trying to keep Daraprim generics from entering the market. Regulators said Shkreli knew that as soon as he raised the price from $13.50 to $750 per pill, Vyera would be vulnerable to cheaper, generic meds.
So he prevented generic drugmakers from obtaining the samples they’d need to develop the generics and blocked access to sales numbers to make sure no one could accurately size up the market. The first generic version of Daraprim was approved by the FDA in February 2020, about a month after the suit landed.
As the ensuing months unfolded, the FTC further alleged in August 2020 that Shkreli was engaging in market manipulation while behind bars. The agency said at the time it had phone and email records from the prison system in which Shkreli discussed with Mulleady how to keep generic Daraprim off the market.
Shkreli has argued the communications are privileged, but the FTC said because the emails took place on monitored prison servers, he had essentially waived that right.
Then, in December 2020, Shkreli made news again when he supposedly attempted to manipulate the selection of the Phoenixus board for his own personal gain, handpicking board members he knew would operate in his interests. An activist group attempting to take over the company failed in July, when Shkreli voted from prison to help keep four of the five current directors.
Shkreli isn’t only facing antitrust suits from the FTC, however. Back March 2021, Blue Cross Blue Shield of Minnesota got into the action, suing Shkreli and Vyera over plans to utilize the same “resale restrictions” regulators alleged they used to stop Daraprim sample distribution. The moves came in the backdrop of what the insurer said were comments by Shkreli claiming he and then-Turing “welcomed” generic competition.
For Khan, a conviction would mark an early splash in the chief’s tenure that has seen little in the way of the Big Pharma trust-busting that had been promised. Though Khan entered her new position as a champion of antitrust reform, the FTC waved through AstraZeneca’s $39 billion acquisition of Alexion without a hitch, viewed by analysts as a bellwether for industry M&A.