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".
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.
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