
Pharma menace Martin Shkreli's old company to pay up to $40M to states for Daraprim price gouging
The Federal Trade Commission and seven states on Tuesday announced a new order under which the states will recoup $40 million from pharma badboy Martin Shkreli, who’s currently in prison for securities fraud, and who spiked the price of an old, cheap toxoplasmosis drug Daraprim by 4,000% overnight.
The order follows a January 2020 complaint against Shkreli, his associate Kevin Mulleady, who’s banned from working in for pharma for 7 years, their company Vyera Pharmaceuticals and its parent company Phoenixus AG. The complaint alleged that Shkreli and Mulleady not only hiked the price of Daraprim but used restrictive distribution and supply agreements, as well as data secrecy, to illegally block cheaper generic versions of the drug.
“Today’s action puts money back in the pockets of drug patients fleeced by a monopolistic scheme,” FTC chair Lina Khan said in a statement. “While litigation against Shkreli continues, the order shuts down the illegal enterprise run by his companies, Vyera and Phoenixus, and bans his associate from the industry. This strong relief sets a new standard and puts corporate leaders on notice that they will face severe consequences for ripping off the public by wantonly monopolizing markets.”
Vyera and Phoenixus are now required to make Daraprim available to any potential generic competitor at list price and to provide prior notification of any planned pharmaceutical transaction valued at $25 million or more. Mulleady, Vyera, and Phoenixus also are prohibited for 10 years from engaging in any conduct similar to what the FTC and the states alleged in their complaint.
For every defendant except Shkreli, this settlement resolves all claims brought by the FTC and the states, the FTC said, as well as those brought in a related class action suit. The trial against Shkreli is set to begin on Dec. 14.
The order requires Vyera and Phoenixus to pay up to $40 million total — $10 million is guaranteed upfront and up to $30 million more is payable over 10 years if the companies’ financial condition improves. The Commission vote authorizing staff to seek entry of the order in the US District Court for the Southern District of New York was 4-0.