Martin Shkreli receives lifetime industry ban, forced to return almost $65M in profits after anticompetitive scheme
Martin Shkreli will have to find a new nickname.
A federal judge banned the former biotech CEO and “Pharma Bro” from the drug industry on Friday, ordering him to pay nearly $65 million in illicit profits. Shkreli was convicted of securities fraud in 2017 and is currently serving a seven-year prison sentence, though he originally gained notoriety for raising the price of the antiparasitic drug Daraprim from $13.50 to $750 in 2015.
“The risk of a recurrence here is real,” Judge Denise Cote wrote in a 135-page opinion. “Shkreli has not expressed remorse or any awareness that his actions violated the law. While he takes full responsibility in his direct testimony for the increase of Daraprim’s price from $17.50 to $750 per pill, he denies responsibility for virtually anything else.”
New York attorney general Letitia James also chimed in, saying in a statement that “Americans can rest easy because Martin Shkreli is a pharma bro no more.”
The FTC and seven states — California, New York, Illinois, North Carolina, Ohio, Pennsylvania and Virginia — brought the suit against Shkreli in 2020, essentially claiming he was running a drug monopoly from prison. Shkreli, regulators and states said, attempted to prevent Daraprim generics from reaching the market by blocking competitors’ access to a key ingredient.
Details of the saga continued trickling out in the two years since. Having previously brought attention to himself through his prison blogs and use of a contraband cell phone, Shkreli began actively engaging in the anticompetitive scheme using the prison’s communications systems, which were recorded and monitored.
Opposing lawyers pounced, using the calls against him in their arguments — claiming attorney-client privilege did not apply here — and pushing for the lifetime ban. Shkreli’s lawyers, meanwhile, asserted his status as a first-time offender meant he likely wouldn’t repeat his illicit activities and sought a more lenient 10-year industry restriction.
Ultimately, the judge found Shkreli’s actions violated federal and state laws that prohibit anticompetitive conduct. Daraprim generics were delayed market entry by at least 18 months, Cote wrote, with Vyera profiting $64.6 million from the scheme.
Friday’s ruling comes on the heels of another court decision against Shkreli last month, in which Vyera and its parent company, Phoenixus AG, were ordered to pay more than $40 million for blocking generic Daraprim access. Vyera was required to make Daraprim available to any potential generic competitor at list price and to provide prior notification of any planned pharmaceutical transaction valued at $25 million or more.
Daraprim had been the only FDA-approved drug to treat a potentially life-threatening condition known as toxoplasmosis. Immunocompromised individuals and those with HIV are particularly vulnerable to the parasitic disease. Shkreli’s 2015 move to spike the price by more than 4,000% became a flashpoint in growing criticism against industry-wide price-gouging.