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FTC Alleges Anticompetitive Conduct By Vyera On Life-saving Drug

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The Federal Trade Commission (FTC) and the New York State Office of the Attorney General jointly filed a complaint in federal court against Vyera Pharmaceuticals, LLC, and its CEO Martin Shkreli for allegedly engaging in anticompetitive schemes in order to maintain a monopoly over the life-saving drug Daraprim.

Daraprim is the gold standard treatment for a rare, potentially fatal parasitic infection known as toxoplasmosis and cystoisosporiasis. It is generally used in combination with leucovorin to treat parasite diseases. It is on the World Health Organization's List of Essential Medicines, the safest and most effective medicines needed in a health system.

Vyera is alleged to have kept the price of Daraprim astronomically high at $750 per tablet or $75,000 for a course of treatment, after it acquired Daraprim, which was selling at a list price of $17.50 per tablet until then. The drug was an affordable, life-saving treatment for more than 60 years.

The complaint seeks to restore competitive market conditions, stop anticompetitive conduct, and prevent the defendants from practicing this in the future. It also seeks to provide monetary relief to those who overpaid for the drug.

It was alleged that the pharma company knew very well that an increase in price would invite genetic competition. Therefore, it maneuvered to maintain the Daraprim revenue stream by restraining trade through restrictive distribution agreements to ensure that a proposed generic entrant could not buy samples of Daraprim.

The company also prevented competitors from accessing a critical ingredient used to manufacture Daraprim. The generics were unable to conduct the FDA-mandated bioequivalence tests necessary for obtaining approval as the samples were not freely available to the market.

The complaint further alleges that the defendants signed "data blocking" agreements that prevented several distributors from selling Daraprim sales data to third-party data reporting companies. The data is important to generic companies as it would help them gauge the market acceptance for the drug before investing in making the generic version of the drug.

The complaint was filed on Monday in the U.S. District Court for the Southern District of New York by the of the New York Attorney General's office and the FTC, which works to promote competition as well as protect and educate consumers.

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