Convicted securities fraudster Martin Shkreli is facing fresh allegations that he and his company purposely and illegally inflated the price of the drug Daraprim, a life-saving medication used to prevent malaria and treat deadly diseases caused by foodborne illness.
New York Attorney General Leticia James and the U.S. Federal Trade Commission (FTC) announced the lawsuit against Shkreli on Monday, accusing him and his former company, Vyera Pharmaceuticals, of manipulating the market to “line their pockets at the expense of the vulnerable patients and the heath care system.”
With Shkreli, a former hedge fund manager, as CEO, Vyera—known as Turing Pharmaceuticals at the time—purchased the rights to Daraprim in August 2015. The company then overnight raised the cost of the drug, which is used to treat toxoplasmosis, a parasitic infection that can carry severe consequences for babies of mothers infected during pregnancy, from $US13.50 ($20) a tablet to $US750 ($1,110).
Medical experts immediately warned the price hike would be disastrous for patients who require the drug, which has been considered the standard of treatment for toxoplasmosis patients for decades.
Patients with AIDS, HIV, and other immunosuppressive diseases also rely on Daraprim.
“Martin Shkreli and Vyera not only enriched themselves by despicably jacking up the price of this life-saving medication by 4,000 per cent in a single day, but held this critical drug hostage from patients and competitors as they illegally sought to maintain their monopoly,” James said in a statement.
The attorney general’s lawsuit alleges that even as Shkreli and Vyera ensured a life-saving medication was prohibitively expensive, they also worked to prevent their competitors from obtaining data necessary for developing a generic alternative.
“Daraprim is a lifesaving drug for vulnerable patients,” said Gail Levine, deputy director of the FTC’s bureau of competition. “Vyera kept the price of Daraprim astronomically high by illegally boxing out the competition.”
Shkreli was previously handed an 84-month prison sentence in 2017 for securities fraud and conspiracy and ordered to forfeit more than $US7.3 ($11) million. His conviction was unanimously upheld last summer by a three-judge panel at the U.S. appeals court in Manhattan.