AG Yost Helps Stop ‘Pharma Bros’
COLUMBUS, OH, Dec. 8, 2021 — The attorneys general of seven states — including Ohio’s Dave Yost — and the Federal Trade Commission (FTC) have reached a historic settlement that shuts down an illegal scheme orchestrated by Martin Shkreli, founding CEO of Vyera Pharmaceuticals, that fleeced patients who were using the lifesaving drug Daraprim.
“These ‘Pharma Bros’ thought they could raise the price 4,000% overnight and get away with it,” Yost said. “They got a dose of justice, and there’s more where that came from.”
A complaint filed in 2020 by the attorneys general and FTC alleges that Shkreli and Kevin Mulleady, another former Vyera CEO, violated antitrust laws by establishing the company with a plan to buy Daraprim, raise the price significantly and then block generic competitors from entering the market.
Under the settlement, Vyera and parent company Phoenixus AG will pay up to $40 million in penalties, with $10 million guaranteed and the remaining $30 million paid over 10 years if the company has available funds.
For his part, Mulleady faces an unprecedented seven-year ban from the pharmaceutical industry.
The agreement also essentially creates a marker for what the states and FTC consider behavior that violates antitrust laws.
Daraprim for decades was the only drug approved by the Food and Drug Administration to treat toxoplasmosis, a serious infection caused by a common parasite. The Centers for Disease Control and Prevention, the National Institutes of Health, the HIV Medicine Association, and the Infectious Diseases Society of America all recommended Daraprim as the initial therapy of choice for acute toxoplasmosis.
When the Pharma Bros. bought the drug in 2015, they immediately raised the price from $17.50 to $750 per pill. To preserve the astronomical price and their ill-gotten gains, the two created a paperwork logjam to box out for as long as possible manufacturers of generic competitors.
With the scheme now thwarted, the coalition of attorneys general and the FTC continue to pursue their lawsuit against Shkreli, who is expected to go on trial next week for masterminding the scheme.
Besides the seven-year ban, Mulleady also agreed to limit his shareholdings in any pharmaceutical company to nominal amounts for 10 years.
Daraprim is now unpatented, and a generic version of the drug is available in the United States.
In addition to the FTC and Yost, the coalition consists of the attorneys general of California, Illinois, New York, North Carolina, Pennsylvania, and Virginia.
