Business

‘Pharma Bro’ firm reaches $40M settlement in gouging case

A company previously owned by “Pharma Bro” Martin Shkreli will pay up to $40 million to settle allegations that it raised the price of the life-saving drug by nearly 4,000% after it gained exclusive rights to the drug, the Federal Trade Commission announced Tuesday.

The Federal Trade Commission (FTC) said Vyera Pharmaceuticals LLC and its parent company Phoenixus AG have agreed to settle allegations that it has manipulated buyers and monopolized sales of Daraprim, which is used to treat toxoplasmosis, an infection that can be fatal to people with HIV or other immune systems. . It can cause serious problems for babies born to mothers who were infected during pregnancy.

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Vyera raised the price of the decades-old drug from $17.50 to $750 per pill after acquiring exclusive rights to it in 2015.

“It should be a very nice investment for all of us,” Shkreli wrote in an email to a contact at the time.

File- Pharmaceutical division chief Martin Shkreli speaks on Capitol Hill in Washington, February 4, 2016. A company owned by Shkreli will pay up to $40 million to settle allegations that it raised the price of the life-saving drug by nearly 4,0

The increase left some patients facing co-payments of up to $16,000 and sparked angry protests that fueled congressional hearings.

The company was sued in federal court in New York by the Federal Trade Commission and seven states: New York, California, Illinois, North Carolina, Ohio, Pennsylvania, and Virginia.

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The lawsuit alleged that Vyera raised the price of Daraprim and illegally created a “network of anticompetitive restrictions” to prevent other companies from creating cheaper generic versions by, among other things, blocking their access to a key component of the drug and companies’ data. You may want to evaluate the drug’s market potential.

The after-hours email to Vyera requesting comment was not immediately returned. But after the lawsuit was filed last year, the company called its claims unfounded and denied that its actions had frozen potential competitors.

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The settlement filed Tuesday requires Vyera and Phoenixus to provide up to $40 million in relief over 10 years to consumers allegedly deceived by their actions and requires them to make Daraprim available to any potential generic competitor at the cost of producing the drug.

Vyera’s former CEO, Kevin Moledy, agreed to pay $250,000 if he violated the settlement, which generally prevents him from “working for, consulting for, or controlling a pharmaceutical company” for seven years, according to an FTC statement.

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The settlement did not stop the litigation against Shkreli, who has been dubbed a “Pharma Bro” and allegedly masterminded the plan as Vyera’s first CEO. The lawsuit brought against him by the Federal Trade Commission and the states is due to go to trial next week.

Shkreli is currently serving a seven-year prison sentence for securities fraud related to the hedge funds he manages prior to entering the pharmaceutical industry.

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