Monday, November 28, 2022 | Back issues
Courthouse News Service Courthouse News Service

Locked Up ‘Pharma Bro’ Spurns Deal on Drug-Hike Suit

During a telephone conference Wednesday over Martin Shkreli's pharmaceutical price-rigging, the Federal Trade Commission reported little progress on court-ordered settlement talks.

(CN) — As ever, Martin Shkreli will not go down quietly. 

Roughly halfway through a seven-year sentence for securities fraud, Shkreli now faces civil liabilities over an unrelated scandal that first earned him the nickname “Pharma Bro” — his decision, as CEO of Turing Pharmaceuticals, to jack up the price of the life-saving drug Daraprim from $17.50 a pill to $750 in a single day.

During a telephone conference Wednesday over the antitrust case that this decision triggered, the Federal Trade Commission reported little progress on court-ordered settlement talks. 

“We're always open to further discussions,” the commission’s attorney Markus Meier said this afternoon, before adding that he was “not optimistic” about their outcome.

Several obstacles stand in the way of a negotiated resolution to the lawsuit that the commission filed with New York Attorney General Letitia James earlier this year. None of the parties wanted the talks to commence; U.S. District Judge Denise Cote had ordered them to the table.

Because the coronavirus pandemic has closed the courts meanwhile, today’s telephone conference occurred without a key participant. Shkreli was not on the line today because correctional authorities could not provide him with a phone inside his low-security federal prison in Allenwood, Pennsylvania.

U.S. Magistrate Judge Robert Lehrburger, tasked with steering the parties toward a resolution, made clear that he held no illusions about the difficulty of striking a deal inside “virtual rooms.”

“We would be in La La Land,” Lehburger remarked.

Even if the attorneys resolved to draw up an agreement, various political entities would have to sign-off on it. That would require the endorsement of the three Republicans and two Democrats who sit as FTC commissioners, and various state attorneys general approving the work of their assistants.

Then, there is then the reputation of Shkreli himself, a man not known for backing down from a fight.

Some four years ago, Shkreli smirked his way through congressional testimony where he invoked his Fifth Amendment right not to answer any questions from the House Oversight and Government Reform Committee. The disgraced pharmaceutical executive trashed his congressional inquisitors on Twitter.

“Hard to accept that these imbeciles represent the people in our government,” he wrote at the time. 

Being convicted of unrelated charges of pulling a “Ponzi-like scheme” on investors in his other company Retrophin did not tamp down his defiance.

The Wall Street Journal reported on how Shkreli while in prison exercised “shadow power” over Phoenixus AG, the parent company of Turing, which was later rebranded Vyera, installing close associates and a protegé inside the Swiss company.

“Their unlawful scheme to maintain a monopoly on Daraprim continues to this day,” the antitrust suit against Shkreli; his associate, Kevin Mulleady; and their companies, Vyera and Phoenixus, states. 

Essential in fighting the parasitic infection toxoplasmosis, Daraprim attacks a disease afflicting pregnant women and those with weakened immune systems from conditions such as AIDS.

Shkreli’s more than 40-fold price hike of a drug protecting society’s most vulnerable made him a poster child for pharmaceutical greed, but the 37-year-old gained a cult following among acolytes drawn to his unapologetic self-defense justifying profiteering as necessary for medical innovation. 

Compulsively broadcasting his tales of high-living on social media, Shkreli bragged about his sexual conquests, spent $2 million to buy a Wu Tang Clan album, and spun conspiratorial narratives of his alleged political persecution.

At his sentencing two years ago, Shkreli appeared to show uncharacteristic signs of self-reflection and remorse.

“The only person to blame for me being here today is me,” he told a federal judge in March 2018. “There is no conspiracy to take down Martin Shkreli. I took down Martin Shkreli.” 

Now state and federal regulators claim that Shkreli is up to his old devices: law-breaking in the interest of a big payday.

“Absent [Shkreli and his associates]’ anticompetitive conduct, Daraprim would have faced generic competition years ago,” the antitrust complaint states. “Instead, toxoplasmosis patients who need Daraprim to survive have been denied the opportunity to purchase a lower-cost generic version, forcing them and other purchasers to pay tens of millions of dollars a year more for this life-saving medication.”

Shkreli is charged with five civil violations of state and federal law. He and his companies recently filed motions to dismiss the complaint.

Read the Top 8

Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.