Six More States Join FTC and NY Attorney General’s Case Against Vyera Pharmaceuticals, Martin Shkreli, and Other Defendants

The Federal Trade Commission has filed an amended complaint in federal court against Vyera Pharmaceuticals, LLC, adding six new states as co-complainants.

The FTC filed the original complaint jointly with the New York State Office of the Attorney General on January 27, 2020, alleging an elaborate anticompetitive scheme by the defendants to preserve a monopoly for the life-saving drug, Daraprim. The amended complaint adds California, Illinois, North Carolina, Ohio, Pennsylvania, and Virginia.

Daraprim is the gold standard treatment for a rare, potentially fatal parasitic infection known as toxoplasmosis. The FTC and the states allege that when Vyera acquired Daraprim, the drug had been an affordable, life-saving treatment for more than 60 years. Vyera immediately raised the list price from $17.50 to $750 per tablet, which purportedly had a significant impact on access to care. To prevent generic competitors from lowering the price, the defendants crafted unlawful restrictive distribution agreements to keep competitors from buying the Daraprim samples they needed to conduct FDA-required tests, the complaint alleges. They also kept competitors from accessing a critical ingredient needed to make Daraprim, according to the complaint. Finally, they allegedly signed “data blocking” agreements preventing several distributors from selling Daraprim sales data to third-party data reporting companies.  

The FTC’s complaint also names as defendants Martin Shkreli and Kevin Mulleady, who allegedly were directly responsible for orchestrating the anticompetitive scheme, as well as Phoenixus AG, Vyera’s parent company.

The amended complaint was filed on April 14, 2020, in the U.S. District Court for the Southern District of New York.