Martin Shkreli, nicknamed the 'pharma bro,' was sentenced to seven years in prison for securities fraud in 2018.
The Federal Trade Commission (FTC) and New York Attorney General Tish James filed a complaint Monday afternoon against Martin Shkreli and Vyera Pharmaceuticals related to an anticompetitive price scheme involving the life-saving drug, Daraprim.
The complaint alleges that Vyera acquired Daraprim in 2015, raised its list price from $17.50 to $750 per tablet, and established "restrictive distribution agreements" to ensure that generic drugmakers would not be able to purchase samples of the drug.
Daraprim, according to the FTC and Office of the New York Attorney General, is the only drug approved by the Food and Drug Administration for the treatment of toxoplasmosis, a parasitic disease which can cause life-threatening conditions.
"Martin Shkreli and Vyera not only enriched themselves by despicably jacking up the price of this life-saving medication by 4,000 percent in a single day, but held this critical drug hostage from patients and competitors as they illegally sought to maintain their monopoly," James said in a statement.
Shkreli, nicknamed the 'pharma bro,' came to prominence after he increased the price of Daraprim by 5,000% while serving as CEO of Turing Pharmaceuticals, (the former name for Vyera).
He was sentenced to seven years in prison for securities fraud in 2018.
Vyera is also accused of preventing competitors from accessing a key ingredient to produce Daraprim and prohibiting distributors from selling Daraprim sales data to third-party data reporting companies.
This tactic hobbled generic drugmakers' ability to assess a particular prescription drug market and decide whether or not to pursue a development project.
"Daraprim is a lifesaving drug for vulnerable patients," Gail Levine, Deputy Director of the Bureau of Competition at FTC, said in a statement. "Vyera kept the price of Daraprim astronomically high by illegally boxing out the competition."
The FTC and the Office of the New York Attorney General seek to enjoin Vyera's conduct, obtain monetary relief for patients affected by the pricing scheme, and ban Shkreli and his associate Kevin Mulleady from the pharmaceuticals industry.
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.
Photo credit: NEW YORK - JUNE 29, 2017 - Martin Shkreli leaves federal court on June 29, 2017 in Brooklyn, New York. / Editorial credit: JStone / Shutterstock.com