Ohio Sues Drug Company Once Led By 'Pharma Bro' Martin Shkreli

COLUMBUS, OH — Ohio, along with six other states and the Federal Trade Commission (FTC), is suing a pharmaceutical company and its former executive, Martin Shkreli, state officials announced Wednesday. The lawsuit accuses the company of blocking the creation of generic drugs used to treat infections.

“A free market is an unfettered market,” Ohio Attorney General Dave Yost said. “When a business uses secret agreements to tie down even the possibility of competition, both the market and the people are hurt — in this case, hurt badly.”

In 2015, Vyera Pharmaceuticals bought the rights to Daraprim, a medication used to treat toxoplasmosis, a parasitic infection usually transmitted in undercooked meat and infected cat feces. Daraprim is the only FDA-approved drug for treating the infection.

Vyera executives then raised the drug's price by nearly 4,000 percent, from $17.50 per tablet to $750 per tablet, according to the lawsuit.

Revenues jumped immediately, Yost's office said. Vyera's annual revenue went from $5 million to more than $60 million, the lawsuit said.

To maintain its higher revenue stream, Vyera began cutting off access to pyrimethamine, the active ingredient used in Daraprim, the lawsuit said. Executives signed restrictive and exclusive contracts to prevent generic drug manufacturers from obtaining pyrimethamine, according to the lawsuit.

At the time, Vyera was led by Shkreli and Kevin Mulleady. Through their actions, and the actions of Vyera's parent company, Phoenixus AG, the lawsuit says the companies, "denied toxoplasmosis patients, who need Daraprim to survive, the opportunity to purchase a lower-cost generic version, forcing them and other purchasers, like hospitals, to pay tens of millions of dollars a year more for the medication."

In a statement issued earlier this year, Vyera denied the accusations in the lawsuit, saying they were "without merit."

"Robust competition from other products for the treatment of toxoplasmosis already exists and no action taken by Vyera has prevented additional potential competitors from entering the market," the company said.

Shkreli, known as "Pharma Bro," is currently incarcerated after he was found guilty of lying to investors. Last week, he asked for his release from prison so he can help research a treatment for the coronavirus, his lawyer said Tuesday.

The lawsuit against Vyera was filed in the New York. The lawsuit accuses Vyera and its former executives of violating Ohio's Valentine Act, the FTC Act, the Sherman Act and other states' antitrust laws.

The other states joining the lawsuit are California, Illinois, New York, North Carolina, Pennsylvania and Virginia.

In Feb. 2020, the FDA announced the approval of the first generic version of Daraprim.