Pharma Bro faces lifetime ban
State, feds sue to keep Shkreli out of drug industry
NEW YORK — State and federal authorities sued imprisoned drug entrepreneur Martin Shkreli on Monday over business tactics that helped make him the badboy face of profiteering in the pharmaceuticals industry, seeking to bar the so-called “Pharma Bro” from the industry for life.
Shkreli became infamous in 2015 for engineering a huge price hike for a long-existing 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, centers on actions his company took afterward that kept potential competitors at bay.
He and the company “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. “We won’t allow ‘Pharma Bros’ to manipulate the market and line their pockets at the expense of vulnerable patients and the health care system.”
Shkreli, 36, is currently serving a seven-year prison sentence for a securities-fraud conviction related to hedge funds he ran before getting into the pharmaceuticals industry in the early 2010s. His lawyers were preparing a response Monday.
Shkreli was CEO of Turing Pharmaceuticals — later Vyera Pharmaceuticals LLC and now Phoenixus AG — in 2015, when it acquired the rights to a drug called Daraprim. It has been used for six decades to treat toxoplasmosis, an infection that can be deadly for people with HIV or other immune-system problems and can cause birth defects if pregnant women get infected. They 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 $20 to $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 sparked an outcry that fueled congressional hearings as some patients faced copays as high as $16,000.
Meanwhile, the company “kept the price of Daraprim astronomically high by illegally boxing out the competition,” FTC official Gail Levine said in a statement Monday.
The drug’s patent protection had expired, but the company used what’s known as a “closed distribution system” to restrict who could buy it — meaning that companies interested in making a generic version of Daraprim couldn’t get enough pills to do required testing, according to the lawsuit.
“An elaborate, multi-part scheme” has likely kept cost consumers and other drug buyers from saving tens of millions of dollars by buying cheaper, generic alternatives, the suit says. The suit seeks unspecified financial relief and penalties, plus an order barring Shkreli from owning or working for any pharmaceutical company.