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FTC sues Martin Shkreli for illegally monopolizing drug

FTC sues Martin Shkreli for illegally monopolizing drug
Attorney Benjamin Brafman puts his hand on the shoulder of former Turing Pharmaceuticals CEO Martin Shkreli as he exits the United States Federal courthouse after being found guilty of multiple criminal charges in his federal securities fraud trial on Aug. 4, 2017 in New York City. Photo by John Angelillo/UPI | License Photo

Jan. 28 (UPI) -- The Federal Trade Commission has charged disgraced former drug industry executive Martin Shkreli and Vyera Pharmaceuticals with concocting an elaborate competition-fixing scheme to maintain their monopoly over the life-saving drug Daraprim.

The FTC and the State of New York filed the complaint in federal court against the pharmaceutical company and its former executive who is currently severing a seven-year jail sentence for fraud, accusing them of pursuing "an elaborate anticompetitive scheme" to prevent generic versions of Daraprim from being introduced into the market.

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According to the complaint, Daraprim, which treats a rare parasitic infection that is fatal in those with compromised immune systems, was relatively affordable for some 60 years until Vyera, then known as Turing Pharmaceuticals, hiked up its price from $17.50 a tablet to $750 immediately after purchasing the drug in 2015.

It then prevented other companies from developing a generic equivalent of the drug through drawing up restrictive distribution agreements that barred them from buying samples of the medication while also limiting their access to a necessary ingredient used in its manufacturing, the FTC said in the complaint.

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"Daraprim is a lifesaving drug for vulnerable patients," said Gail Levine, deputy director of the Bureau of Competition at the FTC. "Vyera kept the price of Daraprim astronomically high by illegally boxing out the competition."

The regulators also said Vyera and its then-executive Shkreli created other so-called data blocking agreements to prevent sales information on Daraprim from getting into the hands of companies that make generic drugs in order to prevent them from assessing whether it is in their interest to even pursue manufacturing a cheaper version of the drug.

"Absent Defendants' anticompetitive conduct, Daraprim would have faced generic competition years ago," regulators said in the complaint. "Instead, toxoplasmosis patients who need Daraprim to survive have been denied the opportunity to purchase a lower-cost generic version, forcing them and other purchasers to pay tens of millions of dollars a year more for this life-saving medication."

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The FTC is suing for monetary relief for those who suffered due to the alleged scheme to keep the price of the drug artificially inflated, remedial injunctive relief to restore competitive conditions to the market and to bar Shkreli and other named defendants from working in the pharmaceutical industry again.

Along with Shkreli, who is also known as "Pharma Bro," former pharmaceutical executive Kevin Mulleady and Vyera's parent company Phoenixus AG are named as defendants in the complaint.

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New York Attorney General Letitia James accused the defendants of not only "despicably" jacking up the price of Daraprim but also holding it hostage from those who needed it.

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"We filed this lawsuit to stop Vyera's egregious conduct, make the company pay for its illegal scheming and block Marin Shkreli from ever working in the pharmaceutical industry again," 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 was convicted in August of 2017 for running a Ponzi scheme and bilking investors out of $11 million and was sentenced to seven years in prison.

Shkreli's lawyer Benjamin Brafman said in a statement that "Mr. Shkreli looks forward to defeating this baseless and unprecedented attempt by the FTC to sue an individual for monopolizing a market."

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