Six States Join Antitrust Action Against Vyera Pharmaceuticals and Martin Shkreli for Daraprim Scheme

The FTC and New York State Attorney General recently amended their original January 2020 complaint against Vyera Pharmaceuticals and its now-infamous CEO, Martin Shkreli, to include six additional states as plaintiffs.  The coalition of antitrust enforcers allege that Vyera engaged in an elaborate scheme to protect its monopoly on Daraprim – a sixty-year-old drug that treats toxoplasmosis, a disease that can be fatal to immunocompromised individuals.  

In 2015, Vyera acquired the rights to market and distribute Daraprim throughout the United States.  The very day after it acquired its marketing rights, Vyera raised the per-tablet price from $17.50 to $750 – a more than 4,000% increase. Though there were no competing companies manufacturing Daraprim, there was also no patent prohibiting generic manufacturers from entering the market.  

The FTC and the States allege that Vyera engaged in litany of anticompetitive conduct to maintain its monopoly, at Shkreli’s behest.  First, Vyera imposed contractual restrictions prohibiting its customers from reselling Daraprim to generic manufactures.  This prevented would-be generic competitors from acquiring the drug for FDA-mandated bioequivalence testing.  Second, Vyera entered exclusive agreements with the manufacturers of the active pharmaceutical ingredient required to produce Daraprim.  Third, Vyera imposed “data-blocking” agreements on its customers so that potential competitors would not have access to the information needed to determine the extent of the market opportunity.  Through these tactics, Vyera successfully hindered competition for years, with a generic competitor finally obtaining approval only on February 28, 2020. 

The FTC and the States allege the defendants violated the Sherman Act, as well as state antitrust and consumer protection laws.

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Faruqi & Faruqi, LLP focuses on complex civil litigation, including securities, antitrust, wage and hour, personal injury and consumer class actions as well as shareholder derivative and merger and transactional litigation. The firm is headquartered in New York, and maintains offices in California, Delaware, Georgia and Pennsylvania.

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About Raymond N. Barto

Raymond N. Barto's practice is focused on antitrust litigation. Ray is a senior associate in the firm's New York office.Prior to joining F&F, Ray was an associate at a prominent New York City law firm where he represented consumers, shareholders, and employees in class action cases that involved consumer fraud, breach of fiduciary duty, and ERISA.While at Brooklyn Law School, Ray served as an Articles Editor for the Brooklyn Law Review. As well, Ray served as an intern to the Honorable Judge William Pauley III of the United States District Court for the Southern District of New York; the United States Attorney's Office for the Eastern District of New York; the litigation department for Marsh & McLennan Companies; and the Kings County District Attorney's Office.

Tags: FTC, Sherman Act, Antitrust, generic drugs, New York, Attorney General, monopoly, Letitia James, Tish James, Martin Shkreli, Pharma Bro, Vyera Pharmaceuticals, Daraprim Raymond N. Barto Raymond N. Barto
Senior Associate at Faruqi & Faruqi, LLP

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