Blue Cross and Blue Shield of Minnesota has filed a class-action lawsuit against the infamous “pharma bro” Martin Shkreli and Vyera Pharmaceuticals, alleging they engaged in illegal drug pricing.
The suit, filed March 4, claims that Vyera Pharmaceuticals intentionally monopolized the market for Daraprim — the leading treatment for toxoplasmosis, a parasitic infection that can be fatal for those with compromised immune systems.
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The company monopolized the market in order to increase the price of the drug by more than 4,000%, the suit alleges.
BCBS of Minnesota filed the suit on behalf of itself and other third-party payers in more than 30 states, Washington D.C. and Puerto Rico. The suit names Vyera, its parent company, Phoenixus AG, and owners Shkreli and Kevin Mulleady as defendants.
Shkreli first gained notoriety for the hefty price increase on Daraprim in 2015. Shkreli’s company, then called Turing Pharmaceuticals, bought Daraprim and raised its price to $750 a tablet from $13.50. He was found guilty of securities fraud in connection with two hedge funds he managed and a different pharma company and was sentenced to seven years in prison in 2017.
According to the insurers’ current class-action suit, the defendants’ Daraprim scheme, which began before the price increase, spanned multiple fronts.
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First, the suit claims that the defendants prevented competitors from obtaining the Daraprim samples they needed to launch a generic product. Second, they made sure that their competitors would not be able to gain access to the necessary ingredients to manufacture generic Daraprim. Third, they denied generic suppliers access to the sales data that was needed to determine whether developing generic Daraprim would be commercially viable, the suit alleges.
“[The defendants] publicly denied their efforts to exclude generic competition, misrepresented the scope and purpose of their sale and distribution restrictions on Daraprim, and claimed what little was known about their scheme was necessary to serve patients’ interests,” the suit states. “None of their claims were truthful.”
The first generic option for Daraprim was finally made available last March. But, for the five years prior, Vyera maintained a 100% share of the market for pyrimethamine (Daraprim) products approved for sale by the Food and Drug Administration, according to a news release issued by BCBS of Minnesota.
The plaintiff and other members of the class-action lawsuit were forced to pay inflated prices in violation of federal antitrust laws, as well as various state antitrust and consumer protection laws, the suit alleges.
The lawsuit further claims that Shkreli controlled and participated in the practices described in the complaint even while incarcerated. Shkreli continued to direct the defendants’ operations, communicating with Vyera executives and Phoenixus’ board of directors “via a contraband cellphone and email and telephone services managed by the Bureau of Prisons,” the suit states.
The plaintiff and class members are seeking monetary damages, and they are demanding a jury trial for all claims that can be tried.
Vyera Pharmaceuticals did not respond to MedCity News’ request for comment.
Photo: z_wei, Getty Images
