Shkreli allegedly used a “contraband” cell phone to continue manipulating drug prices from prison.
Blue Cross and Blue Shield of Minnesota have filed a class action lawsuit against Martin Shkreli, the infamous former drug executive better known as “Pharma bro.”
According to The Star Tribune, Blue Cross and Blue Shield of Minnesota have alleged that Shkreli and other defendants—including his old company, Turing Pharmaceuticals, and its successor, Vyera Pharmaceuticals, LLC—conspired to drastically increase the price of the life-saving drug Daraprim, which is used to treat a serious form of parasitic infection.
Daraprim is also used to prevent respiratory complications and disease in people with HIV/AIDS.
Shkreli, notes the Star Tribune, attracted national ire for smirking his way through a congressional hearing in which legislators questioned his company’s business practices—practices which included artificially inflating the price of Daraprim by more than 4,000%.
Despite a lack of competition, Shkreli and his cohorts allegedly worked to increase the price of a single tablet of Daraprim from $13.50 per dose to $750—making an average treatment cost upwards of $75,000, not accounting for medical administration costs and physician fees.
While Shkreli was never held accountable for his company’s moral misconduct, he was later sentenced to prison for seven years in an unrelated securities case.
However, the claims in Blue Cross and Blue Shield’s class action echo the accusations of Congress.
In their suit, Blue Cross and Blue Shield states that Vyera engaged in anti-competitive practices by preventing rival drug companies from acquiring the samples and ingredients needed to produce more affordable alternatives to Shkreli’s Daraprim.
Dr. Craig Samitt, the chief executive of Blue Cross of Minnesota, said the pharmaceutical industry must be held accountable for its role in making certain drugs prohibitively expensive.
“Drug companies need to be held accountable for their role in making sure health care costs are sustainable for all,” Samitt said.
The lawsuit explains, in basic terms, how Shkreli and Vyera worked to prevent affordable alternatives to Daraprim from threatening their profits.
“Because Daraprim lacked patent and regulatory protections, defendants understood that such an astronomical price increase would cause competitors to develop generic versions of Daraprim and sell them at lower prices,” the lawsuit states.
“To prevent this, and to make their planned price increase commercially viable, defendants executed a scheme to thwart generic competition and force Daraprim purchasers to pay grossly inflated prices,” the suit says,” all while concealing and misleading the public about their anti-competitive conduct.”
While Shkreli has been behind bars for years, Blue Cross of Minnesota alleges that while incarcerated, “defendant Shkreli has continued to direct Defendants’ operations, communicating with Vyera executives and Phoenixus’s board of directors […] via a contraband cellphone and e-mail and telephone services managed by the Bureau of Prisons.”
Shkreli had petitioned to be released from prison early due to coronavirus-related health concerns, but his appeal was denied by a federal judge who found that the “Pharma bro’s” claims lacked merit.