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Martin Shkreli banned from drug industry in pharmaceutical monopoly case

A federal judge on Friday ordered notorious “Pharma Bro” Martin Shkreli banned for life from the pharmaceutical industry and also ruled that he must disgorge $64.6 million in profits he earned from hiking the price of the life-saving drug Daraprim by more than 5,000% overnight.

The ruling in U.S. District Court in Manhattan came in response to a lawsuit alleging illegal and monopolistic behavior connected with Daraprim by Shkreli, who is currently incarcerated for a securities fraud conviction.

The plaintiffs in the case were the Federal Trade Commission, and seven states, including New York and California.

Those same plaintiffs last month obtained a $40 million settlement for the same claims from Vyera Pharmaceuticals, the company that Shkreli had founded, as well as a seven-year ban of his former business partner Kevin Mulleady.

“Americans can rest easy because Martin Shkreli is a pharma bro no more,” said New York Attorney General Letitia James.

The other state plaintiffs in the case were Ohio, Pennsylvania, Illinois, North Carolina and Virginia.

Shkreli is serving a seven-year federal prison term for financial crimes unrelated to his controversial price increase of Daraprim, a drug used to treat parasitic infections in pregnant women, babies, HIV patients, and others. Shkreli controversially raised the drug’s price from $13.50 per pill to a whopping $750 per pill in 2015.

In her 135-page ruling Friday, Judge Denise Cote found that Shkreli, while serving as Vyera’s CEO, violated federal and state laws with anticompetitive conduct to protect profits from Daraprim, which until recently was the only drug federally approved to treat the parasitic condition toxoplasmosis.

Cote, who presided over a seven-day trial in the case last month without a jury, noted in her ruling that the lifetime ban from any role in the drug industry for Shkreli that was sought by the plaintiffs “is a serious remedy and must be done with care and only if equity demands.”

But, she concluded, “Shkreli’s egregious, deliberate, repetitive, long-running, and ultimately dangerous illegal conduct warrants imposition of an injunction of this scope.”

Cote wrote that Shkreli in 2015 “initiated a scheme to block the entry of generic drug competition so that he could reap the profits from Daraprim sales for as long as possible” when he increased the price of the drug.

“Through his tight control of the distribution of Daraprim, Shkreli prevented generic drug companies from getting access to the quantity of Daraprim they needed to conduct testing demanded by the Food and Drug Administration,” the judge wrote.

“Through exclusive supply agreements, Shkreli also blocked off access to the two most important manufacturers of the active pharmaceutical ingredient … for Daraprim.”

Cote noted that with his illegal conduct, “Shkreli delayed the entry of generic competition for at least eighteen months. Shkreli and his companies profited over $64 million from this scheme.”

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

Vyera had been known as Turing Pharmaceuticals when Shkreli ordered the stunning price hike for the drug, earning him widespread condemnation at the time from a wide range of people, including former President Donald Trump and then-Democratic presidential contender Hillary Clinton.

That outrage, along with his incessant trolling of critics on Twitter and stunts like purchasing a one-a-kind Wu-Tang Clan album for a reported $2 million, led to Shkreli becoming internationally infamous under the sobriquet “Pharma Bro.”

In 2016, federal prosecutors charged him with defrauding investors in two hedge funds he ran years before founding Turing, and with using their funds to found another drug company, Retrophin.

Shkreli was also accused of looting Retrophin to pay back investors for their investment losses in his hedge funds.

He was convicted a trial in mid-2017 in Brooklyn federal court of several charges in the case.

Within weeks, he had his $5 million release bond revoked by a judge despite a pending appeal of his conviction after offering his followers on social media a bounty for each strand of hair they could pull off Clinton’s head during her book tour that year.

In addition to his prison sentence, which is due to end in early November, Shkreli was ordered as part of his criminal conviction to pay $7.4 million in forfeiture.

That criminal penalty was satisfied last July with the sale by the U.S. government of the surrendered Wu-Tang Clan album, “Once Upon a Time in Shaolin” for what was likely at least almost $2.4 million.

The government previously had obtained $5 million held in Shkreli’s brokerage account, and other assets that included the Lil Wayne album “Tha Carter V,” an engraving on paper by Pablo Picasso.

Read More: Martin Shkreli banned from drug industry in pharmaceutical monopoly case

2022-01-14 19:14:21

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