'Pharma Bro' Martin Shkreli Is Being Sued for Fixing Price for Life-Saving Drug

Currently incarcerated "Pharma Bro" Martin Shkreli is the target of a state and federal lawsuit that was announced on Monday.


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Martin Shkreli

On Monday, New York state and federal authorities made public a lawsuit against currently imprisoned "Pharma Bro" Martin Shkreli over shady business practices which will seek (in part) to ban him for life from the pharmaceuticals industry. The suit is also looking for financial relief and penalties, though specific figures weren't available for those.

Shkreli infamously caught the attention of the public when he obtained the manufacturing license for the antiparastic medication Daraprim, then jacked up the price from $13.50 to $750 per pill

According to TIME, Monday's lawsuit was filed by the Federal Trade Commission and the NY attorney general's office, and it focuses on actions that Shrekli's company utilized to ward off potential competitors. 

According to Attorney General Letitia James, Skhreli's company “held this critical drug hostage from patients and competitors as they illegally sought to maintain their monopoly."

James added, “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 is currently in the midst of a seven-year sentence he's serving at the Federal Correction Complex in Allenwood, Pennsylvania. That began in 2018, and was the result of a conviction for securities-fraud that was tied to hedge funds he ran prior to getting into pharmaceuticals. 

Shkreli was the CEO of Turing Pharmaceuticals, which now goes by Phoenixus AG, when they acquired the rights for Daraprim in 2015. For more than 60 years Daraprim was used to treat the infection toxoplasmosis. When Shkreli's company got those rights they boosted the price by a factor of nearly 56. 

That increase combined with Shkreli's hubris (he's not nearly the only ghoul in the pharmaceuticals industry, he's just the guy who chose to rub it in everyone's face) led to public outrage that sparked congressional hearings due to outrageous co-pays that touched $16,000. 

In a statement on Monday, FTC official Gail Levine said that Skhreli's company "kept the price of Daraprim astronomically high by illegally boxing out the competition." 

Though the patent protection for the drug had expired, the company is alleged to have prevented cheaper options using a "closed distribution system." The lawsuit explains that this prevented companies who were interested in making a generic version from acquiring enough pills to conduct required tests. 

The lawsuit further accused Phoenixus AG of using schemes that included blocking potential opponents' access to a key ingredient for a rival pill, and also from hiding sales data manufacturers would want to estimate how a new pill would do. 

The suit contends that the moves Phoenixus AG is accused of employing probably prevented consumers from purchasing cheaper, generic alternatives. As of this date, no generic version of Daraprim exists in the U.S. 

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