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Martin Shkreli’s former company to pay $40M in settlement over drug price hikes

Shkreli became a symbol of pharmaceutical greed after his company, formerly Turing Pharmaceuticals, bought Daraprim in 2015 and then raised the price to $750 a tablet from $17.50.

The Federal Trade Commission, joined by seven states include New York and California, alleged that Shkreli and Mulleady had a whole scheme to keep competition out of the market as their company raked in exorbitant profits. The agency said the plan delayed generic versions from reaching the market for years and caused “tens of millions of dollars in harm to consumers.”

A key step, according to the FTC statement Tuesday, was entering resale-restriction agreements with distributors that kept generic manufacturers from acquiring the drug. That meant generic companies couldn’t begin tests needed to win regulatory approval of copycat versions that would be much cheaper for consumers.

The FTC said Shkreli’s company also locked up exclusive supplies of drug ingredients and signed agreements with two distributors that blocked sales data. As a result, would-be competitors didn’t know the potential size of the market.

FTC Chair Lina Khan, who appears to be guiding the commission on a more aggressive path, said her agency’s settlement tells corporate leaders “that they will face severe consequences for ripping off the public by wantonly monopolizing markets.”

Turing now operates as Vyera Pharmaceuticals under the parent company Phoenixus AG. Under the settlement, Vyera and Phoenixus will be required to pay $10 million upfront and $30 million over 10 years if their financial condition improves.

That’s not guaranteed. The drugmaker has been struggling with lawsuits, a drop in revenue and continuing drama since Shkreli went to jail, including an effort by Mulleady to keep Shkreli from having any input into actions of the company, according to STAT.