WASHINGTON (Reuters) – The U.S. Federal Trade Commission and seven states on Tuesday settled claims accusing Vyera Pharmaceuticals of trying to block generic versions of its life-saving drug Daraprim, but are preparing for a Dec. 14 trial against accused mastermind Martin Shkreli.
Tuesday’s settlement, worth up to $40 million, addressed claims in a Jan. 2020 lawsuit that Shkreli and co-defendant Kevin Mulleady launched Vyera with a goal of buying an important drug, raising the price, and using illegal anticompetitive strategies to thwart cheaper generics.
Vyera, then Turing Pharmaceuticals, allegedly protected its dominance of Daraprim by ensuring that generic drugmakers could not obtain samples for cheaper versions, and kept potential rivals from buying a key ingredient.
Shkreli gained notoriety in 2015 when he boosted the price of Daraprim overnight to $750 from $17.50 per tablet.
Daraprim is used to treat toxoplasmosis, a common parasitic infection that threatens people with weakened immune systems.
The settlement calls for Vyera to pay $10 million upfront plus up to $30 million over 10 years, and halt anticompetitive practices.
Mulleady, who like Shkreli was also a Vyera chief executive, agreed to a seven-year ban from most roles in the pharmaceutical industry.
U.S. District Judge Denise Cote in Manhattan approved the accord. She would oversee Shkreli’s trial.
Mulleady’s lawyer Marc Kasowitz said his client “vehemently” denied the claims against him, but believed the resolution was best for him and the companies.
Vyera, its lawyers and Shkreli’s lawyers did not immediately respond to requests for comment.
Shkreli is serving a seven-year prison term after his 2017 conviction for cheating investors in two hedge funds and trying to prop up the stock price of another drug company he led, Retrophin Inc. He is eligible for release in October 2022.
New York Attorney General Letitia James, whose state co-led the lawsuit, welcomed the proposed settlement.
Alluding to a common nickname for Shkreli, James said the defendants “shamelessly engaged in illegal conduct that allowed them to maintain their exorbitant and monopolistic price of a life-saving drug — letting Pharma Bros get rich, while others paid the price.”
(Reporting by Jonathan Stempel and Diane Bartz; Editing by Mark Porter and David Gregorio)