Blue Cross Minnesota sues ‘Pharma Bro’ Shkreli over antitrust allegations

Blue Cross Minnesota sues 'Pharma Bro' Shkreli over antitrust allegations

Blue Cross and Blue Shield of Minnesota sued now-incarcerated Martin “Pharma Bro” Shkreli on Thursday, alleging the company intentionally monopolized the market and illegally jacked up the price of a “gold-standard” drug.

The Eagan, Minn.-based insurer filed a proposed class action lawsuit in the U.S. District Court for the Southern District of New York on Thursday, saying Vyera Pharmaceutical and its parent company Phonexius strategically cornered the market to increase the price of Daraprim by more than 4,000%. Vyera Pharmaceutical, formerly known as Turing Pharmaceuticals, did not respond to an interview request. The suit also names Shkreli, Phoenxius and Phoenxius’ ex-chairman Kevin Mulleady as defendants.

Dr. Craig Samitt, president and CEO of Blue Cross and Blue Shield of Minnesota, said the lawsuit represented an essential step in advocating for patients’ affordable medicines.

“Drug companies need to be held accountable for their role in making sure healthcare costs are sustainable for all,” Samitt said in a statement.

According to the insurer’s complaint, in August 2015, Shkreli and Mulleady paid Impax $55 million to acquire the rights to Daraprim, a prescription medication used to treat toxoplasmosis. The drug is often used multiple times per day by HIV and AIDs patients and those with compromised immune systems. The day after the two purchased the drug, they raised its price from $17.50 per pill to $750, according to the suit.

BCBS Minnesota alleges the duo prevented other companies from manufacturing generics by preventing competitors from accessing the samples they needed to test the bioequivalence of new medicines, restricting access to vital ingredients and preventing competitors from accessing sales data to determine whether developing generic Daraprim was commercially viable. If Vyera had not engaged in anti-competitive behavior, the suit said at least five generic versions of Daraprim would exist in the market today.

Defendants’ “anticompetitive conduct successfully thwarted generic competition for years and continues to cause supracompetitive prices to this day,” the suit reads.

The not-for-profit insurer seeks an unspecified amount of damages. BCBS Minnesota wants to represent more than 30 parties across the nation. Its claims echo those made by federal regulators and the state of New York last year, where Shkreli was essentially accused of pocketing millions at the expense of patients. Shkreli was sentenced to prison in 2017 for defrauding hedge fund investors through a different pharmaceutical company.

Last year, Shkreli requested an early release from prison, saying that he could use his pharmaceutical expertise to cure coronavirus. A judge denied his request. BCBS Minnesota’s complaint alleges that he continues to direct the operations at Vyera through a contraband cell phone.

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Marie Maynes
Marie Maynes is a Sports enthusiast and writes for the Sports section of ANH.