The Eagan, Minnesota-based health insurer alleges that Phoenixus and its U.S. subsidiary Vyera schemed to raise the price of its toxoplasmosis treatment.
Blue Cross and Blue Shield of Minnesota has filed a class action lawsuit against the drug company founded by Martin Shkreli, alleging that the infamous "Pharma Bro" schemed to monopolize the market for the drug Daraprim, and then jacked up the price by 4,000%.
Baar, Switzerland-based Phoenixus AG and its U.S. subsidiary Vyera Pharmaceuticals were named in the complaint, which was filed this month in a federal district court in New York City on behalf of BCBS Minnesota and other third-party payers in more than 30 states, Washington D.C. and Puerto Rico.
Attempts by HealthLeaders to get a comment from Vyera were not successful.
The suit, which seeks damages based on the alleged overcharges, claims that Vyera "executed a multifaceted plan to enrich themselves and maintain their monopoly" by refusing to allow generic drug makers to develop lower-cost alternatives.
"Everyone deserves access to safe, effective, and affordable medication," BCBS Minnesota President and CEO Craig Samitt, MD, said in a media release. "This lawsuit is an important step in advancing that goal. Drug companies need to be held accountable for their role in making sure healthcare costs are sustainable for all," he said.
Vyera Pharmaceuticals was founded and led by Shkreli as Turing Pharmaceuticals in 2015. The company was sold to Phoenixus in 2017. The alleged scheme occurred when Shkreli was CEO of Turing in 2015.
A federal jury in August 2017 convicted Shkreli on two counts of securities fraud. He was sentenced to seven years in prison, where he now resides.
Daraprim is the leading treatment for toxoplasmosis. Under Turing Pharmaceuticals, the price for one Daraprim pill rose from $17.50 to $750 for treatments that often require multiple doses each day for weeks and months.
The suit alleges that Vyera, Phoenixus, Shkreli and fellow executive Kevin Mulleady "specifically targeted Daraprim for the price hike due to the relatively small patient population and ability to tightly control who could access the drug."
The suit noted that, from the time of its purchase of Daraprim rights in 2015 until the first generic option was available in March 2020, Vyera maintained a 100% share of the market for pyrimethamine products approved for sale in the United States.
“Drug companies need to be held accountable for their role in making sure healthcare costs are sustainable for all.”
Craig Samitt, MD, President / CEO, Blue Cross Blue Shield Minnesota
John Commins is the news editor for HealthLeaders.
KEY TAKEAWAYS
Under Turing Pharmaceuticals, the price for one Daraprim pill rose from $17.50 to $750 for treatments that often require multiple doses each day for weeks and months.
The suit alleges that Vyera "specifically targeted Daraprim for the price hike due to the relatively small patient population and ability to tightly control who could access the drug."
From the time of its purchase of Daraprim rights in 2015 until the first generic option was available in March 2020, Vyera maintained a 100% share of the market for pyrimethamine products.