‘Pharma Bro’ firm reaches $40M settlement with price-gouging victims
A drug company previously run by ‘Pharma Bro’ Martin Shkreli has been ordered to pay up to $40 million to compensate victims after he jacked up the price of life-saving drug Daraprim 4,000 percent.
The Federal Trade Commission filed the order on Tuesday demanding that the pharmaceutical company Vyera and its parent Phoenixus compensate victims and make Daraprim “available to any potential generic competitor at list price.”
Vyera and Phoenixus must pay $10 million to victims up front. If the financial conditions of the companies improve, they will be forced to shell out an additional $30 million over the next 10 years. The order also bans Shkreli’s associate Kevin Mulleady from the pharmaceutical industry for seven years.
“With respect to every defendant except Shkreli, this settlement resolves all claims brought by the FTC and the state co-plaintiffs, as well as those brought in a related class action suit,” the FTC said in a statement.
Shkreli is already serving a seven-year sentence through 2023 for securities fraud he committed while running two hedge funds. The 38-year-old rose to notoriety after he hiked the price of life-saving AIDS treatment Daraprim from $17.50 to $750 a pill after obtaining the exclusive rights to it in 2015.
���Should be a very handsome investment for all of us,” Shkreli put it in an email to a contact at the time.
The increase left some patients facing co-pays as high as $16,000 and sparked an outcry that fueled congressional hearings. The company was sued in federal court in New York by the FTC and seven states: New York, California, Illinois, North Carolina, Ohio, Pennsylvania, and Virginia.
Shkreli now faces a looming antitrust trial over those charges that’s slated to begin next week. The FTC and the states have accused him of creating a “monopolistic scheme” that enabled him to gouge consumers.
“Martin Shkreli masterminded an elaborate plan to dramatically jack up the price of life-saving drug Daraprim by blocking cheaper options,” FTC chair Lina Khan said Tuesday. “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.”
Daraprim is used to treat toxoplasmosis, an infection that can be deadly for people with HIV or other immune-system problems and can cause serious problems for children born to women infected while pregnant.
With the Associated Press