Health Care

Company once owned by Martin Shkreli settling price-gouging allegations for $40M

Vyera Pharmaceuticals, LLC, previously owned by now-jailed “Pharma bro” Martin Shkreli, and its parent company reached a settlement with the Federal Trade Commission and multiple states to pay up to $40 million for allegedly hiking up the price of the Daraprim drug by 4,000 percent.

A settlement reached between the FTC, seven states, Vyera, parent company Phoenixus AG and Shkreli associate Kevin Mulleady on Tuesday requires the two companies to pay up to $40 million in relief and says that Mulleady cannot serve on or “exercise control over” a pharmaceutical company for seven years.

According to the agreement, Mulleady will pay $250,000 if he violates the terms of the settlement.

“Vyera and Phoenixus are required to make Daraprim available to any potential generic competitor at list price, and to provide prior notification of any planned pharmaceutical transaction valued at $25 million or more,” the FTC said in a release.

The settlement comes after a complaint alleged that the price of a drug called Daraprim that is used by AIDS patients was hiked up by 4,000 percent by Shkreli and Mulleady, according to the FTC.

After the drug was acquired by their company Vyera in 2015, the complaint alleged that the anti-competitive restrictions were instituted in place to make it more difficult for competitors to sell a cheaper option, according to the FTC.

The settlement on Tuesday said that litigation would continue against Shkreli, who in 2018 was sentenced to seven years in jail related to two hedge funds he once ran and securities fraud.

“Martin Shkreli masterminded an elaborate plan to dramatically jack up the price of life-saving drug Daraprim by blocking cheaper options. While litigation against Shkreli continues, the order shuts down the illegal enterprise run by his companies, Vyera and Phoenixus, and bans his associate from the industry,” FTC Chair Lina Khan said in a statement upon the announcement.

“This strong relief sets a new standard and puts corporate leaders on notice that they will face severe consequences for ripping off the public by wantonly monopolizing markets,” she added.

An attorney representing Mulleady said in a statement that his client denies any wrongdoing “but recognizes that under the circumstances this resolution is best for him and the companies in order to move forward.”

“With this matter behind him, he looks forward to the next chapter of his life and career,” attorney Marc Kasowitz said. 

The Hill has reached out to the lawyer for Phoenixus AG and Vyera Pharmaceuticals, LLC for comment.

Tags Daraprim FTC Lina Khan Martin Shkreli Pharma Bro

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