Martin Shkreli Sued by Blue Cross Over 2015 Drug Price Hike
(Bloomberg) -- Martin Shkreli, the “Pharma Bro” who’s serving seven years behind bars for defrauding hedge fund investors, was sued by a health insurance company for raising the price of a crucial drug by 4,000% overnight in 2015 -- the first private lawsuit against him.
Blue Cross and Blue Shield of Minnesota accuses Shkreli in the suit filed Thursday in federal court in Manhattan of scheming to monopolize the U.S. market for Daraprim -- the “gold standard” drug for treating a potentially fatal parasitic infection called toxoplasmosis. The insurer’s claims echo those made in an antitrust suit filed last year by federal regulators and the state of New York, which accused Shkreli of pocketing millions of dollars at the expense of patients.
Shkreli, who is scheduled to be released in October 2023, acquired U.S. rights to the drug in 2015 for $55 million -- more than three times its assessed value at the time, according to the Blue Cross suit. He proceeded to rip off health plans and their members “by inflating Daraprim’s price while unlawfully blocking the development of lower-cost generics, causing treatment delays, access problems, and unlawful overcharges,” the suit says.
Shkreli’s lawyer Benjamin Brafman, declined to comment.
The allegations are separate from what landed Shkreli in prison, though the drug at the center of the case is the same. He was sentenced in 2018 for defrauding investors in hedge funds he ran by lying to them about his track record and performance as well as a fraud scheme involving Retrophin Inc., a company he founded in 2011.
Last year, a judge denied Shkreli’s request for an early release from prison, which he argued was justified because he could use his pharmaceutical expertise to help cure coronavirus.
The case is BCBSM, Inc. v. Vyera Pharmaceuticals, 21-cv-01884, U.S. District Court, Southern District of New York (Manhattan).
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