Minnesota Blues plan sues Shkreli, others for illegal pricing of Daraprim

Blue Cross and Blue Shield of Minnesota announced today that it had filed a lawsuit against Martin Shkreli and others for taking advantage of the monopoly position of Daraprim (pyrimethamine) to illegally price

"We’re bringing this lawsuit today because payers have been overpaying for this medication for years, and there is still not robust generic competition to drive the price down,” Kellie Lerner, a partner in Robins Kaplan, the law firm representing the Minnesota Blues plan, said in an emailed statement.

According to Lerner, the Minnesota Blues plan's lawsuit the first private lawsuit against the defendants seeking to recover the alleged overcharges.

Shkreli founded Turing Pharmaceuticals in 2015 and used the company to acquire Daraprim, which is used mainly to treat toxoplasmosis, a parasitic infection. People with compromised immune systems are vulnerable to having serious cases. Turing raised the price of Daraprim from $13.50 a tablet to $750, and Shkreli became notorious for price gouging — and his shameless attitude.

He is currently serving a seven-year prison sentence for securities fraud that wasn’t directly related to Turing or Daraprim pricing.

Turing Pharmaceuticals reorganized as a different company, Vyera Pharmaceuticals.

In the complaint filed in the U.S. District Court for the Southern District of New York, the Minnesota Blues plan alleges that Vyera Pharmaceuticals; its parent company, Phoenixus AG; Shrkeli and another former executives, Kevin Mulleady, targeted Daraprim for a large price hike because of the relatively small patient population and ability to tightly control who could access the drug, according to the insurer’s press release. From the time of its purchase of Daraprim rights in 2015 until the first generic option was available in March 2020, Vyera maintained a 100% of the market for pyrimethamine products approved for sale in the United States by the FDA, the press release says.

The complaint outlines Blue Cross’ claims that Vyera “executed a multifaceted plan" to enrich themselves and keep their their monopoly by preventing generic drug companies from acquiring Daraprim samples and ingredients needed to develop lower-cost alternatives, the press release says.

“The health care industry is still feeling the impact of these alleged anticompetitive practices today," Lerner said in her statement. "If there had been multiple generic companies in the market, there would likely have been a significant price drop for this medication years ago, as we see with other drugs when generic competition enters the market."

The Minnesota Blues plan has filed the suit on behalf of itself and other similar third-party payers under the laws of more than 30 states, Washington D.C. and Puerto Rico, according to the company press release. The lawsuit suit seeks monetary damages based on allegations of market overcharges for Daraprim that were the result of anticompetitive, deceptive and unjust conduct, the press release says.