New York, FTC sue ‘pharma bro’ Shkreli, others over Daraprim price hikes

FILE PHOTO: Former drug company executive Martin Shkreli exits U.S. District Court after being convicted of securities fraud, in the Brooklyn borough of New York City, U.S., August 4, 2017. REUTERS/Carlo Allegri/File Photo

WASHINGTON (Reuters) – Martin Shkreli, the “pharma bro” in prison for defrauding investors, faces a lawsuit filed by the Federal Trade Commission and New York Attorney General’s office for a scheme to preserve his monopoly for the drug Daraprim, which has seen gigantic price increases.

The lawsuit accuses a company that Shkreli once ran of buying the rights to Daraprim, which is used to treat toxoplasmosis, and quickly raising the price from $17.50 per tablet to $750 while also taking steps to ensure that there would not be a generic version of the medicine. The company named is Vyera Pharmaceuticals, formerly Turing Pharmaceuticals, which was headed by Shkreli.

For example, the FTC alleges that the company restricted distribution of the medicine to ensure that generic drug makers could not get the samples that they would need to make their own version of the drug. The company also prevented potential competitors from buying one of the ingredients needed for the medicine, the FTC said.

A spokeswoman for Vyera and a lawyer for Shkreli did not immediately respond to a request for comment.

Shkreli became notorious as “Pharma Bro” when he raised the price of the anti-parasitic drug Daraprim by more than 5,000% in 2015 as chief executive of Turing Pharmaceuticals.

The U.S. Supreme Court said in November that Shkreli must remain in prison, rejecting his effort to overturn his conviction and seven-year sentence for securities fraud and conspiracy.

The justices refused to hear Shkreli’s appeal of his August 2017 conviction and $7.36 million forfeiture for cheating investors in two hedge funds he founded, and trying to prop up the stock price of biotechnology company Retrophin Inc, which he once ran.

Reporting by Diane Bartz; Editing by David Gregorio

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