Former pharmaceutical executive Martin Shkreli points as he exits the courthouse after the jury issued a verdict in his case at the U.S. District Court for the Eastern District of New York, Aug. 4, 2017 in the Brooklyn borough of New York City.
Martin Shkreli, known as the “Pharma Bro,” will remain subject to a lifetime ban from working in the pharmaceuticals industry and as well as an order to pay $64.6 million in disgorged profits after a federal appeals court upheld a ruling against Shkreli on Tuesday.
A three-judge panel of the U.S. Court of Appeals for the Second Circuit handed down a unanimous ruling that upheld the district court’s decision that Shkreli must keep out of the pharmaceutical business because of his anti-competitive behavior in distributing a potentially lifesaving drug.
New York State Attorney General Letitia James (D), the Federal Trade Commission, and seven individual states sued Shkreli and his companies in 2020 for antitrust violations. They maintained that Shkreli and his business partner illegally created a monopoly for Daraprim — a brand-name drug used to treat toxoplasmosis. For the immunocompromised — particularly those with HIV/AIDS or cancer, and organ transplant recipients — toxoplasmosis can be fatal. James said that Shkreli continued to carry out his scheme even when he was in federal prison serving a 7-year sentence for securities fraud. Shkreli’s company raised the price of Daraprim by 4,000% overnight.
When U.S. District Judge Denise Cote issued the underlying ruling against Shkreli nearly two years ago, she said, “Without a lifetime ban, there is a real danger that Shkreli will engage in anticompetitive conduct within the pharmaceutical industry again.”
In an eight-page summary ruling, the panel, which consisted of George W. Bush appointee Barrington D. Parker Jr., and Joe Biden appointees Myrna Pérez and Sarah A.L. Merriam, said that Shkreli’s arguments were entirely unpersuasive. The panel summed up Shkreli’s nefarious past:
The district court found, and Shkreli does not dispute, that Shkreli’s illegal scheme was “egregious, deliberate, repetitive, long-running, and ultimately 5 dangerous.” The district court found that Shkreli’s comprehensive and effective scheme led to the price increase of a life-saving drug, Daraprim, from $17.50 to $750 per tablet and successfully blocked the entry of generic drug competition to maintain Daraprim’s inflated price. The district court further found that Shkreli’s scheme was far-reaching and was implemented using many means. It pointed to the record demonstrating that Shkreli facilitated extensive research; established at least two companies; recruited and worked through others even while in prison; and took advantage of regulatory requirements designed to safeguard the pharmaceutical industry to carry out his illegal scheme.
In response to the ruling, Letitia James posted online, “Once again, we won our case against ‘Pharma Bro’ Martin Shkreli for his illegal scheme to monopolize a lifesaving drug. A federal court just rejected his appeal, and he’ll be banned from the pharmaceutical industry for life and must pay $64.6 million.”
Shkreli also responded to the ruling online. He posted on X, formerly Twitter, specifically calling out the Second Circuit for its decision:
Thanks to the @FTC, and now the 2nd Circuit, I am the first inividual [sic] person in the history of the USA to be sued under the Sherman Act Section 2 (130 year old law) as a monopolist. Not Gates, Zuckerberg, Rockefeller, but little old me. Even if you believe the monopolist allegations, which you should not–because they are bullshit–I did no different from what AbbVie and countless others do everyday in pharma. Anyway, with this ruling, every executive in America can be held jointly and severally liable for antitrust actions levied against their companies. Have fun out there!
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