Blue Cross and Blue Shield of Minnesota Discloses Terms of Daraprim Antitrust Settlement

On February 10, 2022, the U.S. District Court for the Southern District of New York preliminarily approved a class settlement between Blue Cross and Blue Shield of Minnesota, on behalf of a putative class of health care payors, and Vyera and two of its executives, including Martin Shkreli, over their alleged anticompetitive conduct to protect exorbitant price increases for Daraprim. Daraprim is a drug used to treat toxoplasmosis, a parasitic infection most commonly suffered by individuals with compromised immune systems, such as those with HIV/AIDS.

Under the terms of the settlement, Vyera and a co-defendant, Phoenixus, will make an initial payment of $7 million to the class. They will pay up to an additional $21 million if certain conditions relating to the financial state of the defendants are met.

This private class settlement comprises seventy percent of the total $10 to $40 million settlement reached by the U.S. Federal Trade Commission and the Attorneys General of New York, California, Illinois, North Carolina, Ohio, Pennsylvania, and Virginia against all defendants except Shkreli.

Vyera acquired the exclusive rights to Daraprim in March 2015. It immediately increased the price of the drug from $13.50 per tablet to $750 per tablet, an increase of more than 4,000 per cent. This price increase led to public outrage and congressional hearings. In order to preserve this price increase in the face of expected generic competition, BCBS Minnesota alleges that Vyera: (1) restricted distribution of Daraprim to specialty pharmacies who were not allowed to sell the drug without Vyera’s approval – a power Vyera used to prevent potential generic competitors from obtaining the drug for the required bio-equivalency testing; (2) entered into exclusive supply contracts with the sole FDA-approved supplier and all potential suppliers of Daraprim’s active pharmaceutical ingredient, pyrimethamine; and (3) prohibited distributors of Daraprim from providing sales data to aggregators of market data. A generic version of Daraprim was first made available in 2020 even though it had been sold since 1953 and was not covered by any patents.

BCBSM, Inc. v. Vyera Pharmaceuticals, LLC et al., 1:21-cv-01884 (S.D.N.Y.)