Convicted securities fraudster Martin Shkreli is facing fresh allegations that he and his company purposely and illegally inflated the price of the drug Daraprim, a life-saving medication used to prevent malaria and treat deadly diseases caused by foodborne illness.
New York Attorney General Letitia James and the Federal Trade Commission (FTC) announced a lawsuit against the former hedge fund manager on Monday, accusing him and his former company, Vyera Pharmaceuticals, of manipulating the market to “line their pockets at the expense of the vulnerable patients and the heath care system.”
With Shkreli as CEO, Vyera—known then as Turing Pharmaceuticals—purchased the rights to Daraprim in August 2015. Overnight, it raised the cost of the drug from $13.50 a tablet to $750. Daraprim is used to treat toxoplasmosis, a parasitic infection that can carry severe consequences for babies of mothers infected during pregnancy.
Medical experts immediately warned the price hike would be disastrous for patients who require the drug, which has been considered the standard of treatment for toxoplasmosis patients for decades.
Patients with AIDS, HIV, and other immunosuppressive diseases also rely on Daraprim.
“Martin Shkreli and Vyera not only enriched themselves by despicably jacking up the price of this life-saving medication by 4,000 percent in a single day, but held this critical drug hostage from patients and competitors as they illegally sought to maintain their monopoly,” James said in a statement.
The attorney general’s lawsuit alleges that even as Shkreli and Vyera ensured a life-saving medication was prohibitively expensive, they also worked to prevent their competitors from obtaining data necessary for developing a generic alternative.
“Daraprim is a lifesaving drug for vulnerable patients,” said Gail Levine, deputy director of the FTC’s bureau of competition. “Vyera kept the price of Daraprim astronomically high by illegally boxing out the competition.”
Shkreli was previously handed an 84-month prison sentence in 2017 for securities fraud and conspiracy and ordered to forfeit more than $7.3 million. His conviction was unanimously upheld last summer by a three-judge panel at the U.S. appeals court in Manhattan.
Correction: A previous version of this article identified New York’s attorney general by the name “Leticia James.” Her first name is Letitia, not Leticia. We regret the error.