Martin Shkreli, a former pharmaceutical executive known for raising the price of a life-saving drug, will have to pay $64.6 million and will be banned for life from the drug industry for violating antitrust law, a federal court ordered Friday.
Mr. Shkreli is serving a seven-year prison sentence for defrauding investors in connection with his work managing two hedge funds and a different pharmaceutical company. This conviction has nothing to do with the drug-pricing saga that raised him to fame. He is expected to be released this year.
In 2015, Shkreli – then a pharmaceutical entrepreneur in his early 30s who wasn’t well known outside his line of work – acquired a decades-old drug known as Daraprim, which is used to treat a life-threatening parasitic infection, and raised its price to 750 dollars. Tablet, from $13.50. The move alarmed politicians and the public, who were already concerned about rising drug prices and the role drug companies could play in making drugs expensive.
Most pharmacy executives quietly and gradually raise prices, with reassurances about ensuring patient access, but Shkreli appeared unrepentant. He became known as “Pharma Brothers” for his reckless attitude in the face of criticism. The BBC called him probably “the most hated man in America”.
On Friday, Judge Dennis L. Cote of the US District Court for the Southern District of New York that Mr. Shkreli attempted to maintain Daraprim’s monopoly through anticompetitive tactics. The lawsuit was filed by the Federal Trade Commission and attorneys general in seven states, including New York.
The judge found that Shkreli had violated state and federal antitrust laws and that his former company, now known as Vyera Pharmaceuticals, had brought in $64.6 million in excess profits from its sales from Daraprim due to this behavior.
The court found that under Shkreli’s control, Vyera changed the way the drug was distributed and hindered competition in the generic drug market. The New York attorney general’s office said in a news release that consumers have been hurt by high prices and fewer options for the drug, “which has forced many patients and physicians to make difficult and dangerous decisions to treat life-threatening illnesses.”
In 2020, the Food and Drug Administration approved the first generic version of Daraprim.
“Mr. Shkreli’s anti-competitive behavior at the expense of public health was blatant and reckless,” the court’s fatwa said.
Mr. Shkreli’s lawyers did not immediately respond to a request for comment on Friday.
Shkreli has repeatedly defended his decision to raise the price of Daraprim, saying the profits would allow his company to develop better antiparasitic drugs. When he was convicted of securities fraud, he said he was never motivated by money and that he made mistakes in trying to bolster his reputation.
While incarcerated, Mr. Shkreli has remained in the headlines.
Around the same time that Daraprim’s price increased, he bought the Wu-Tang Clan’s one-of-a-kind album, “Once Upon a Time in Shaolin,” at auction for $2 million. After Mr. Shkreli was found guilty of securities fraud, the government confiscated the album to pay part of the $7.36 million it owed.
The government announced last summer that it had sold the album, but did not reveal the buyer or price. In the fall, a group working on the frontiers of digital art and cryptocurrency said it had bought the recording for $4 million.
In late 2020, Kristi Smith, a former Bloomberg News reporter who helped break the story of Shkreli’s 2015 arrest in the securities case, revealed in an Elle magazine article that she had fallen in love with him and that they were in a relationship. I continued to defend him.
This month, another healthcare entrepreneur, Elizabeth Holmes, founder of blood-testing startup Theranos, was found guilty of defrauding investors. Sentencing is scheduled for September 26.