Vyera Pharmaceuticals and a former CEO, Kevin Mulleady, entered into an agreement Tuesday with the New York Attorney General’s Office to end anticompetitive behavior in the pricing of a drug to treat toxoplasmosis.
The agreement also requires the company to pay up to $40 million and bans Mulleady from the pharmaceutical industry for seven years.
Legal action against the remaining defendant Martin Shkreli, the former Vyera CEO who was the architect of the illegal scheme, is pending. His trial is scheduled to begin on Dec. 14.
In January 2020, the agency and the Federal Trade Commission filed a lawsuit against Vyera, previously Turing Pharmaceuticals, Shkreli, and Mulleady for antitrust violations. It charged that the defendants stifled competition and permitted the defendants to protect their monopoly profits from their more than 4,000 percent overnight increase – to $750 per pill – of the drug Daraprim (pyrimethamine).
Daraprim is used to treat the parasitic disease toxoplasmosis, and, until recently, was the only approved source of this life-saving medication by the U.S. Food and Drug Administration.
“Vyera and Mulleady, along with Martin Shkreli, shamelessly engaged in illegal conduct that allowed them to maintain their exorbitant and monopolistic price of a life-saving drug – letting pharma bros get rich, while others paid the price,” said Attorney General Letitia James.
Parasitic disease may pose serious consequences for those with compromised immune systems, including babies born to women infected with the disease and people with HIV. Despite being unpatented, no generic version of Daraprim was sold in the United States until recently.
Before Mulleady and Shkreli’s actions, Daraprim was cheap and accessible for decades. Then, in August 2015, Vyera purchased the drug, increased the price overnight, altered its distribution, and engaged in other conduct to delay and prevent generic competition – all so that it could maintain the new sky-high price, according to the lawsuit.
The high price and distribution changes limited access to the drug, forcing many patients and physicians to make difficult and risky decisions for the treatment of a life-threatening disease, the lawsuit said.
The illegal scheme by Vyera, Shkreli, and Mulleady involved restrictive distribution and supply agreements, as well as data secrecy, to delay lower cost generic competitors from making the drug, according to the lawsuit.
In April 2020, the states of California, Illinois, North Carolina, Ohio, Pennsylvania, and Virginia joined the lawsuit.