MANHATTAN (CN) — The biotech executive infamous for jacking up the price of a lifesaving drug used to treat HIV won’t be making a comeback once he’s released from prison after a federal judge banned him for life from the pharmaceutical industry.
In addition to the lifelong ban, Martin Shkreli, 38, will have to pay $64.6 million for violating antitrust laws, monopolizing access to the drug Daraprim through restrictive distribution contracts and cutting off generic drug competitors’ access to the drug’s active ingredient.
Daraprim had been cheap and readily accessible before 2015 when Shkreli, as CEO of Turing Pharmaceuticals, raised the price of the life-saving drug from $17.50 to $750 per pill.
Turing would later change its name to Vyera and settle an ensuing lawsuit from the Federal Trade Commission for $40 million, leaving Shkreli as the lone defendant. He did not attend his seven-day trial in New York's Southern District.
“This extraordinarily tight control of the supply of Daraprim had its intended effect. It actually delayed the entry of generic pharmaceutical companies,” U.S. District Judge Denise Cote wrote Friday.
The 135-order order from the Clinton-appointed Cote addresses the severity of the penalties levied against the disgraced former executive.
“Shkreli’s egregious, deliberate, repetitive, long-running, and ultimately dangerous illegal conduct warrants imposition of an injunction of this scope,” it states.
Cote shot down Shkreli’s argument that putting Daraprim in “specialty distribution” helped patients by giving them access to advice from specialty pharmacies on how to foot the bill for the high cost of the drug and getting insurance coverage.
“Shkreli offered no evidence, however, that patients were assisted in any of these ways. Patients didn’t need help figuring out how to pay for Daraprim, of course, until Shkreli raised its price to a scandalous level and put his anticompetitive scheme in place to protect that price,” Cote wrote.
FTC Chair Lina Khan called the decisions a “significant win for American consumers.”
“This precedent-setting relief should be a warning to corporate executives everywhere that they may be held individually responsible for the anticompetitive conduct they direct or control,” Khan said in a statement.
Shkrelli is serving a seven-year prison sentence for his separate 2017 securities fraud conviction that followed a six-week trial in the Eastern District of New York.
After his 2015 arrest, Shkreli resigned as CEO but kept control from Vyera from behind bars, Cote found.
“Even when incarcerated, Shkreli managed to direct its policies and choose Vyera’s executives,” the order states. “Whether he used a smuggled phone or the prison’s authorized phones, he stayed in touch with Vyera’s management and exercised his power over Vyera as its largest shareholder.”
Seven states joined the lawsuit: New York, California, Ohio, Illinois, North Carolina, and the commonwealths of Pennsylvania and Virginia.
On Friday, New York Attorney General Letitia James applauded the outcome in a statement riddled with shout-outs to the Wu-Tang Clan. Shrkreli owned a one-of-a-kind album from the iconic Staten Island hip hop group.
Shkreli was ordered to pay a $7.4 million forfeiture judgment in 2018, settled by the United States government’s sale of the album, “Once Upon a Time in Shaolin.”
“‘Envy, greed, lust, and hate,’ don’t just ‘separate,’ but they obviously motivated Mr. Shkreli and his partner to illegally jack up the price of a life-saving drug as Americans’ lives hung in the balance,” said James, quoting from the song "A Better Tomorrow," released by the group in 1997.
Referencing the 1994 "C.R.E.A.M.," one of the group’s biggest hits, James continued: “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.”
An attorney for Shkreli did not return a request for comment on Friday.
Follow @NinaPullano
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