Martin Shkreli’s complaint leads to FTC drug price settlement
New York Post
18th January 2017
Martin Shkreli . . .
whistleblower? The Federal Trade Commission, following an exclusive report by The Post, has settled charges against drug maker Mallinckrodt for allegedly creating a monopoly to jack up the price of a drug used to treat infant spasms by 85, 000 percent since 2001, to $34, 000 a vial. The twist: the FTC had launched its investigation into Mallinckrodt shortly after “pharma bro” Shkreli, then the chief executive of drugmaker Retrophin, filed suit in 2014 alleging anticompetitive tactics by Questcor, a drug company that Mallinckrodt now owns. Specifically, Shkreli had accused Questcor of acquiring the competing drug Synacthen from Novartis — and then shutting it down so it could continue to charge prices for its own drug.
Following The Post’s report that regulators were prepping charges, the FTC said Wednesday Mallinckrodt will pay $100 million to settle the charges, and will be forced to grant a license to a rival firm to make the competing drug, Synacthen, within 120 days. “We charge that, to maintain its monopoly pricing, [Questcor] acquired the rights to its greatest competitive threat, a synthetic version of Acthar, to forestall future competition,” FTC Chairwoman Edith Ramirez said. “This is precisely the kind of conduct the antitrust laws prohibit.
” Mallinckrodt, which hasn’t admitted wrongdoing, confirmed the settlement in a Wednesday statement. A source close to Mallinckrodt added, meanwhile, that Shkreli filed his suit against Questcor after he tried and failed to buy Synacthen. Indeed, the irony in the case is thick.
Shkreli, as the CEO of Turing Pharmaceuticals in 2015, drew national derision when he acquired the rights to Daraprim, a drug used to treat parasitic infections, and The old — for allegedly cheating investors in a hedge fund he was running. The FTC has been investigating whether Questcor’s deal to acquire Synacthen gave it a monopoly. Mallinckrodt bought Questcor in 2014 for $5.
8 billion. Acthar reportedly generates roughly $1 billion in annual revenue. Mallinckrodt warned its investors in June of the FTC probe, saying it “could have a material adverse effect on its financial condition, results of operations and cash flows.
” Mallinckrodt’s shares were halted Wednesday afternoon after The Post’s report on the possible FTC charges, falling nearly 14 percent before closing at $46. 53, down 5. 9 percent for the day.
“Think you know everything about me? I was a whistleblower against high drug prices, too,” Shkreli posted on his Facebook page Wednesday, attaching The Post’s article. “Details, context, subtlety. Try it sometime.
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