State and federal authorities sued imprisoned entrepreneur Martin Shkreli on Monday over tactics that shielded a profitable drug from competition after a price hike made the so-called “Pharma Bro” infamous.
Shkreli was scorned as the bad-boy face of pharmaceuticals profiteering after he engineered a roughly 4,000 per cent increase in the price of a decades-old medication for a sometimes life-threatening parasitic infection.
Monday’s lawsuit, filed by the New York attorney general’s office and the Federal Trade Commission, centres on subsequent actions by Shkreli and his former company.
They “held this critical drug hostage from patients and competitors as they illegally sought to maintain their monopoly,” Attorney General Letitia James said in a statement.
At least four potential competitors have so far been kept from making cheaper generic versions of the medication, the suit says.
Lawyer Benjamin Brafman said Shkreli “looks forward to defeating this baseless and unprecedented attempt by the FTC to sue an individual for monopolizing a market.”
Shkreli, 36, is serving a seven-year prison sentence for a securities-fraud conviction related to hedge funds he ran before getting into the pharmaceuticals industry.
Shkreli was CEO of Turing Pharmaceuticals — later called Vyera Pharmaceuticals LLC and Phoenixus AG — in 2015, when it acquired the rights to a drug called Daraprim. It is used to treat toxoplasmosis, an infection that can be deadly for people with HIV or other immune-system problems and can cause serious problems for children born to women infected while pregnant. Hospitalized patients typically take the drug daily for several weeks, and sometimes for months or even years, according to the lawsuit.
The company boosted the cost from less than US$20 to US$750 per pill.
“Should be a very handsome investment for all of us,” Shkreli put it in an email to a contact at the time.
The increase left some patients facing co-pays as high as US$16,000 and sparked an outcry that fueled congressional hearings.
Then the company “kept the price of Daraprim astronomically high by illegally boxing out the competition,” FTC official Gail Levine said in a statement Monday.