Pharma Bro Martin Shkreli faces class-action suit over drug ‘monopoly’

Lawsuit claims Vyera Pharmaceuticals facilitated monopoly by stopping ‘competitors from obtaining Daraprim samples needed to launch generic product’

Related video: Who is Martin Shkreli?

Pharma Bro Martin Shkreli, who became infamous when he raised the price of Daraprim by over 4,100 per cent, is facing a class-action lawsuit from health insurers who say he created a drug monopoly around the HIV medication.

Insurers Blue Cross and Blue Shield of Minnesota sued Mr Shkreli in a Manhattan federal court claiming that he and his company Vyera Pharmaceuticals facilitated the monopoly on the drug by stopping “competitors from obtaining the Daraprim samples they needed to launch a generic product," The New York Post reported.

The drug is given to HIV patients with compromised immune systems and is also used to treat toxoplasmosis, a disease coming from parasites that can be deadly.

Generic products are cheaper versions of a brand-name drug. Mr Shkreli and Vyera Pharmaceuticals hid their actions, publicly rejecting the idea that they were stopping companies from getting samples, the suit claims.

Without any competitors, Mr Shkreli decided to raise the price of the drug from $17.50 to $750. The lawsuit said the “Defendants determined they could impose monopoly prices and reap significant profits at the expense of Plaintiff and Class members, who were forced to pay inflated prices in violation of the federal antitrust laws".

Read More: Judge orders Martin Shkreli to hand over Wu-Tang Clan album

Mr Shkreli is currently serving a seven-year prison sentence after he was convicted of securities fraud concerning two hedge funds he managed. Mr Shkreli's business partner Kevin Mulleady is also part of the lawsuit, according to The New York Daily News.

Maintaining the monopoly by limiting the supply of the drug, the lawsuit claims that Vyera Pharmaceuticals also enforced its actions by making distributors and customers of the drug sign agreements that they wouldn’t sell samples of the drug to companies that would then make a generic version at a lower price to consumers.

Mr Shkreli orchestrated the scheme from prison, telling Mr Mulleady and fellow Vyera executive Akeel Mithani in August 2019 to start to sell the drug one bottle at a time, The New York Daily News alleged

The lawsuit states that Mr Shkreli “urged Mulleady to ‘really carefully screen every doctor; and ensure that no one could ‘sell more than one bottle at a time’ to prevent a generic company from “get[ting its] hands on anything,’”.

According to The Wall Street Journal, Mr Shkreli used a contraband phone to tweet and run the drug company Phoenixus AG from prison.

New York Attorney General Letitia James and the Federal Trade Commission filed a lawsuit concerning Daraprim in January of last year. They want Vyera's profits to be returned and to forever ban the 37-year-old Mr Shkreli from working in the drug market.

The Independent has reached out to Vyera Pharmaceuticals, Mr Mulleady, Mr Mithani, and Mr Shkreli's lawyer Benjamin Brafman for comment.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in