Herring helps secure $40M from Vyera Pharmaceuticals in price-gouging case
A coalition of seven state attorneys general and the FTC have announced an agreement that will force Vyera Pharmaceuticals – previously known as Turing Pharmaceuticals – to pay up to $40 million, and ban former CEO Kevin Mulleady from almost any role at a pharmaceutical company for seven years.
Attorney General Mark Herring and his colleagues continue to pursue their lawsuit against remaining defendant Martin Shkreli, the former Vyera CEO who was the architect of a scheme to push the price of the drug Darapim overnight to $750 per pill.
Daraprim is used to treat the parasitic disease toxoplasmosis and, until relatively recently, was the only approved source of this life-saving medication by the U.S. Food and Drug Administration.
“Vyera Pharmaceuticals and Kevin Mulleady made the unconscionable decision to hold onto their monopoly and astronomically raise the price of the life-saving drug Daraprim, in order to make as much money as possible,” Herring said. “Bad acting drug companies and their executives must be held accountable when they put profits over human lives and I’m proud of the work my colleagues and I did on this case.”
Daraprim was, until recently, the only FDA-approved drug for the treatment of toxoplasmosis, a parasitic disease which may pose serious and often life-threating consequences for those with compromised immune systems, including babies born to women infected with the disease and individuals with HIV.
Until recently, Daraprim had been the only FDA-approved drug to treat acute toxoplasmosis, and it was the gold standard for decades — recommended by the Centers for Disease Control and Prevention, the National Institutes of Health, the HIV Medicine Association, and the Infectious Diseases Society of America as the initial therapy of choice for acute toxoplasmosis. Until recently, there had never been a generic version of Daraprim sold in the United States, despite its being unpatented.
Before Mulleady and Shkreli’s involvement, Daraprim had been affordable and accessible for decades. Then, in August 2015, Vyera purchased the drug, increased the price dramatically overnight, altered its distribution, and engaged in other conduct to delay and impede generic competition — all so that it could maintain its new sky-high price. 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 this life-threatening disease.
The scheme perpetrated by Vyera, Shkreli and Mulleady involved restrictive distribution and supply agreements, as well as data secrecy, with the intent and effect of delaying entry by lower cost generic competitors.
The terms of the agreement include a strict injunction against both the corporate defendant and Mulleady to avoid repetition of a similar scheme. In addition to the $40 million Vyera will pay for its wrongdoing, Mulleady will be subject to a seven-year ban from the pharmaceutical industry. Mulleady has also agreed to limit his shareholdings in any pharmaceutical company to nominal amounts, for ten years.
Joining Attorney General Herring and the FTC in this agreement are the attorneys general of California, Illinois, New York, North Carolina, Ohio and Pennsylvania.