Company founded by Shkreli off the hook
in $43 million lawsuit: judge
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[September 30, 2017]
By Brendan Pierson
NEW YORK (Reuters) - Vyera Pharmaceuticals,
formerly known as Turing Pharmaceuticals, does not have to pay Impax
Laboratories Inc $43 million in a dispute stemming from Turing founder
Martin Shkreli's decision to boost by 5,000 percent the price of a drug
Turing bought from Impax, a U.S. judge ruled on Friday.
U.S. District Judge Edgardo Ramos in Manhattan said Vyera was liable for
the money under its contract with Impax, but did not have to pay it
because Impax had violated the contract as well.
Impax and Vyera did not immediately respond to requests for comment.
Impax sold Daraprim, an anti-infection drug often used in AIDS patients,
to Turing in August 2015. Turing, under Shkreli's leadership,
immediately raised its price to $750 per pill, from $13.50, sparking
outrage among patients and U.S. lawmakers.
Shkreli stepped down as Turing's chief executive officer in December
2015 after he was charged with defrauding investors in two hedge funds
he once ran.
The 34-year-old former executive was convicted of securities fraud in
August. He was jailed earlier this month after he placed a $5,000 bounty
on former presidential candidate Hillary Clinton's hair, prompting a
federal judge to revoke his bail.
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Shkreli's lawyer, Benjamin Brafman, said at a court hearing in June that
Shkreli still owned a substantial share of Turing worth between $30 and
$50 million.
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Impax sued Turing in May 2016, claiming that as a result of the
price increase, state Medicaid agencies had demanded tens of
millions of dollars in rebates for Daraprim pills that still had
Impax branding. It said Turing was liable for those rebates.
Drug companies must agree to pay such rebates, which are calculated
using a formula that depends in part on the manufacturer's price, in
order to be eligible for Medicaid coverage.
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Turing countered that Impax had provided faulty information to the
federal health agency that calculated the rebates, and was required
to submit corrected information. Impax said it had no obligation to
do that under the contract, but Ramos rejected that argument on
Friday.
The Wall Street Journal reported last week that Impax was in talks
to merge with privately held Amneal Pharmaceuticals LLC, citing
unnamed sources.
(Reporting By Brendan Pierson in New York; Editing by David
Gregorio)
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