MANHATTAN (CN) — The Second Circuit Court of Appeals on Tuesday affirmed a lifetime ban on “Pharma Bro” Martin Shkreli from working in the pharmaceutical industry ordered two years ago by a federal judge in a civil antitrust case over his price-gouging of a popular HIV treatment.
The 40-year-old Brooklyn native was deemed responsible for pumping up the price of HIV drug Daraprim from $17.50 to $750 per pill after his company Vyera Pharmaceuticals bought the drug’s rights in 2015. Two years later, he was convicted in Brooklyn federal court of lying to hedge fund investors and cheating investors in a drug company, a scheme unrelated to the Daraprim controversy from which he first gained notoriety.
The three-judge panel for the Second Circuit on Tuesday was not persuaded to reverse a permanent injunction ordered by U.S. District Judge Denise Cote in the antitrust case, banning Shkreli from participating in the pharmaceutical industry.
“We conclude that the district court did not abuse its discretion by imposing a lifetime ban from the pharmaceutical industry on Shkreli because an injunction of that scope was within the range of permissible decisions,” the panel wrote in its opinion.
“The district court found, and Shkreli does not dispute, that Shkreli’s illegal scheme was ‘egregious, deliberate, repetitive, long-running, and ultimately dangerous,'" the panel wrote.
“Given Shkreli’s pattern of past misconduct, the obvious likelihood of its recurrence, and the life-threatening nature of its results, we are persuaded that the district court’s determination as to the proper scope of the injunction was well within its discretion,” the panel wrote.
U.S. Circuit Judges Barrington Parker Jr., a George W. Bush appointee, and Myrna Pérez and Sarah A. L. Merriam, both Biden-appointed judges, made up the panel.
Shkreli immediately responded to the ruling on social media Tuesday morning, writing on X, formerly Twitter: “Thanks to the FTC, and now the 2nd Circuit, I am the first individual 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,” he continued. “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 every day in pharma. Anyway, with this ruling, every executive in America can be held jointly and severally liable for antitrust actions levied against their companies.”
In addition to the lifetime industry ban, Shkreli was ordered 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.
During oral arguments in December, Shkreli’s lawyers argued he never banked any ill-gotten gains from the antitrust scheme, and therefore should not be subjected to the nearly $65 million disgorgement.
The appellate panel noted Shkreli challenged the financial penalty for “the first time on appeal that district court erred by relying on federal law remedies in imposing joint and several disgorgement on him under New York law.”
As to the issue of disgorgement, the Second Circuit found “Shkreli never made this argument, and he proffers no reason now for his failure to raise arguments there.”
The antitrust case was brought by the Federal Trade Commission, joined by a coalition of states including New York, California, Virginia, Illinois, North Carolina, Ohio, and Pennsylvania.
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 FTC for $40 million, leaving Shkreli as the lone defendant.
He did not attend his seven-day civil antitrust trial in New York's Southern District.
Shkreli was originally due to be released from prison on the securities fraud conviction in September 2023, but was released early from a prison in Allenwood, Pennsylvania in May 2022 to a halfway house overseen by the Federal Bureau of Prisons' New York Residential Reentry Management Office.
He reportedly does consulting work for a law firm and now lives with his sister in Queens, New York, according to the U.S. Probation Office.
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