'Pharma Bro' Martin Shkreli is ordered to return $64M, barred from drug industry

‘Pharma Bro’ Martin Shkreli is ordered to return $64M, barred from drug industry

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NEW YORK — Martin Shkreli must return $64.6 million in profits that he and his former company reaped from raising the price of the lifesaving drug Daraprim, a federal judge ruled Friday, while also barring the provocative, imprisoned ex-CEO from participating in the pharmaceutical industry for the rest of his life.

U.S. District Judge Denise Cote’s ruling came several weeks after a seven-day bench trial in December. The Federal Trade Commission and seven states brought the case in 2020 against the man dubbed “Pharma Bro” in the media.

Shkreli’s lawyer did not immediately respond to a request for comment.

Shkreli was CEO of Turing Pharmaceuticals — later Vyera — when it jacked up the price of Daraprim from $13.50 to $750 per pill, after obtaining exclusive rights to the decades-old drug in 2015. It treats a rare parasitic disease that strikes pregnant women, cancer patients and AIDS patients.

He defended the decision as capitalism at work and said insurance and other programs ensured that people who need Daraprim would ultimately get it.

But the move sparked outrage from medical centers to Congress to the 2016 presidential campaign trail, where candidate Hillary Clinton termed it price-gouging and future President Donald Trump called Shkreli “a spoiled brat.”

Shkreli eventually offered hospitals half off — still amounting to a 2,500% increase. But patients normally take most of the weekslong treatment after returning home, so they and their insurers still faced the $750-a-pill price.

He resigned as Turing’s CEO in 2015, a day after he was arrested on securities fraud charges related to hedge funds he ran before getting into the pharmaceutical industry. He was convicted and is serving a seven-year prison sentence.

Vyera Pharmaceuticals was sued in federal court in New York by the FTC and seven states: New York, California, Illinois, North Carolina, Ohio, Pennsylvania and Virginia.

They alleged that Vyera hiked the price of Daraprim and illegally created “a web of anticompetitive restrictions” to prevent other companies from creating cheaper generic versions by, among other things, blocking their access to a key ingredient for the medication and data the companies would want in order to evaluate the drug’s market potential.

Vyera and its parent company, Phoenixus, settled last month, agreeing to provide up to $40 million in relief over 10 years to consumers and to make Daraprim available to any potential generic competitor at the cost of producing the drug.

Former Vyera CEO Kevin Mulleady agreed to pay $250,000 if he violates the settlement, which bars him from working for a pharmaceutical company for seven years.

Shkreli proceeded to trial.

Alert: Judge orders Martin Shkreli to return $64.6M in drug profits, bars him from pharmaceutical industry for life

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NEW YORK (AP) — Judge orders Martin Shkreli to return $64.6M in drug profits, bars him from pharmaceutical industry for life.

U.S. court bars Martin Shkreli from pharma industry, orders $64.6 million payment

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WASHINGTON (Reuters) – A U.S. court said on Friday that Martin Shkreli, who famously raised the price of Daraprim, would be ordered to pay $64.6 million and would be barred for life from the pharmaceutical industry.

The drug is used to treat toxoplasmosis, a parasitic infection that threatens people with weakened immune systems.

(Reporting by Diane Bartz)

Judge bans ‘Pharma Bro’ Martin Shkreli from pharmaceutical industry ‘for life’

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By Sonia Moghe, CNN

A federal judge ruled Friday former pharmaceutical executive Martin Shkreli should be barred “for life” from participating in the pharmaceutical industry and ordered him to pay nearly $65 million in fines to seven states.

The decision by US District Judge Denise Cote Friday was part of a civil case brought by the Federal Trade Commission, and attorneys general for New York, California, Ohio, Pennsylvania, Illinois, North Carolina and Virginia in 2020, who alleged Shkreli violated federal and state laws that ban anticompetitive conduct. A week-long trial took place in December, which Shkreli opted not to attend, according to the ruling.

“Based on the trial evidence, Shkreli will be barred for life from participating in the pharmaceutical industry and is ordered to disgorge $64.6 million in net profits from his wrongdoing,” Cote wrote in her ruling.

CNN has reached out to attorneys for Shkreli for comment. He is currently serving a prison sentence on unrelated charges at a federal facility in Pennsylvania and is expected to be released in November, according to Bureau of Prisons online records.

Shkreli was convicted of securities fraud and conspiracy in 2017 for defrauding investors out of more than $10 million between 2009 and 2014 in what prosecutors called a Ponzi scheme. In 2018, he was sentenced to seven years in federal prison and was ordered to forfeit nearly $7.4 million in assets along with a $75,000 fine.

Shkreli was reportedly continuing to run the remains of a drug company from prison, and Cote referenced in her ruling Shkreli communicated with executives using a contraband cell phone.

New York Attorney General Letita James, representing one of the states that will receive money from the fine, said in a statement the court’s decision puts corporate executives on notice her office is prepared to seek personal accountability for anticompetitive conduct that impedes people’s access to affordable medications.

“The rich and powerful don’t get to play by their own set of rules, so it seems that cash doesn’t rule everything around Mr. Shkreli,” James said in a statement. “New Yorkers can trust that my office will do everything possible to hold the powerful accountable, in addition to fighting to protect their health and their wallets.”

The-CNN-Wire

‘Pharma Bro’ fraudster Martin Shkreli handed lifetime ban from drug industry, ordered to pay US$64.6M in damages

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‘Pharma Bro’ fraudster Martin Shkreli handed lifetime ban from drug industry, ordered to pay US$64.6M in damages The judge said Shkreli’s scheme to hike the drug Daraprim’s price overnight to $750 per tablet from $17.50 was ‘particularly heartless and coercive’ Photo by Carlo Allegri/Reuters/File

Article content WASHINGTON — A U.S. judge on Friday barred Martin Shkreli from the pharmaceutical industry for life and ordered him to pay $64.6 million after he famously raised the price of the drug Daraprim and fought to block generic competitors.

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Article content U.S. District Judge Denise Cote in Manhattan ruled after a trial where the U.S. Federal Trade Commission and seven states had accused Shkreli, the founder of Vyera Pharmaceuticals, of using illegal tactics to keep Daraprim rivals out of the market. We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or ‘Pharma Bro’ fraudster Martin Shkreli handed lifetime ban from drug industry, ordered to pay US$64.6M in damages Back to video Shkreli drew notoriety in 2015 after hiking Daraprim’s price overnight to $750 per tablet from $17.50. The drug treats toxoplasmosis, a parasitic infection that threatens people with weakened immune systems. In a 130-page decision, Cote faulted Shkreli for creating two companies, Vyera and Retrophin Inc, designed to monopolize drugs so he could profit “on the backs” of patients, doctors and distributors. She said the Daraprim scheme was “particularly heartless and coercive,” and a lifetime industry ban was needed because of the “real danger” that Shkreli could become a repeat offender.

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Article content “Shkreli’s anticompetitive conduct at the expense of the public health was flagrant and reckless,” the judge wrote. “He is unrepentant. Barring him from the opportunity to repeat that conduct is nothing if not in the interest of justice.” More On This Topic Martin Shkreli caught trying to run his company from behind bars How Martin Shkreli went from ‘spoiled brat’ pharma exec to inmate After the ruling, FTC Chair Lina Khan tweeted the decision, calling it a “just outcome.” Shkreli’s lawyers did not immediately respond to a request for comment. Shkreli is serving a seven-year prison sentence for securities fraud. He did not attend the trial held last month. Vyera was founded in 2014 as Turing Pharmaceuticals, and acquired Daraprim from Impax Laboratories Inc in 2015. Regulators accused Vyera of protecting its dominance of Daraprim by ensuring that generic drugmakers could not obtain samples for cheaper versions, and keeping potential rivals from buying a key ingredient. The seven states joining the FTC case included California, Illinois, New York, North Carolina, Ohio, Pennsylvania and Virginia.

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