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NY AG Sues ‘Pharma Bro’ Martin Shkreli, Says He’s Still Committing Crimes from Prison

New York State Attorney General and Trump-instigator Letitia James just came after villainous “Pharma Bro” Martin Shkreli in a federal lawsuit. James joined forces with the Federal Trade Commission (FTC), and is determined to get some justice for the victims of Shkreli’s nefarious scheme to wildly inflate the price of live-saving medication. Perhaps most outrageous is that, according to the lawsuit, Shkreli continues to wreak havoc on healthcare from inside his prison cell.

The lawsuit names as defendants Vyera Pharmaceuticals, LLC  (formerly known as Turing Pharmaceuticals) and two of its former CEOs: Shkreli and Kevin Mulleady. Shkreli is currently serving a 7-year sentence in federal prison for securities fraud – but James’s lawsuit goes far more to the heart of that which made Shkreli the object of infamy. James alleges that Shkreli and Mulleady illegally created—and continue to maintain–a monopoly for the drug Daraprim.

Daraprim is the brand-name for the drug pyrimethamine, which is the primary medication used to treat toxoplasmosis, a common parasitic infection typically transmitted through undercooked meat. For those who are immunocompromised – such as individuals with HIV/AIDS or cancer, and organ transplant recipients—toxoplasmosis can be fatal. Expectant mothers can also pass the parasite in utero, causing severe birth defects. Pyrimethamine is listed as an “essential medicine” by the World Health Organization and is the only FDA-approved pyrimethamine product available for the treatment of toxoplasmosis, and has been on the market for more than 60 years.

The lawsuit’s allegations call out Shkreli’s sinister actions: in 2015, Shkreli’s company acquired the U.S. rights to Daraprim, and then suddenly raised the price from $17.50 to $750 per tablet. Then, knowing that generic alternatives to Daraprim would likely enter the market, Shkreli and Mulleady engaged in an elaborate scheme top block generic alternatives and keep a monopoly for their company. That monopoly, even while Shkreli is serving a prison sentence, “continues to this day.”

According to the complaint, Shkreli doubled down on his misdeeds after going to prison. He continued to work with Mulleady as well as his protégé Akeel Mithani:

Since his incarceration in September 2017, Shkreli has remained in regular contact with Mulleady and Mithani through phone calls, emails, in-person visits, and potentially other means. From June to December 2019 alone, Shkreli exchanged 240 emails with Mulleady and 391 emails with Mithani. In these communications, Shkreli continues to discuss strategies to prevent generic competition to Daraprim, as well as other matters of Vyera business strategy.

James has asked the District Court for the Southern District of New York for financial compensation for Shkreli’s victims, as well as for an injunction stopping Shkreli and Mulleady from continuing their conduct, and for an order banning the two from the pharmaceutical industry for life.

“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. “We filed this lawsuit to stop Vyera’s egregious conduct, make the company pay for its illegal scheming, and block Martin Shkreli from ever working in the pharmaceutical industry again. We won’t allow ‘Pharma Bros’ to manipulate the market and line their pockets at the expense of vulnerable patients and the health care system.”

[Martin Shkreli via Drew Angerer and Getty Images]

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Elura is a columnist and trial analyst for Law & Crime. Elura is also a former civil prosecutor for NYC's Administration for Children's Services, the CEO of Lawyer Up, and the author of How To Talk To Your Lawyer and the Legalese-to-English series. Follow Elura on Twitter @elurananos