Legal Woes Keep Pouring in for Jailed "Pharma Bro"

Shkreli_Spencer Platt/Getty Images

Spencer Platt/Getty Images

Although Martin Shkreli continues to serve a prison sentence for fraud, the so-called "Pharma Bro" remains in legal hot water over antitrust charges. 

Last week, a federal judge ruled that government regulators could point to his past antics of excessively increasing prices of medications while he helmed the pharmaceutical company Retrophin when the antitrust trial for Daraprim began.

The U.S. Federal Trade Commission filed a complaint in federal court against Vyera Pharmaceuticals, LLC last year, formerly known as Turing Pharmaceuticals, which he founded. In the complaint, the FTC claimed Shkreli and Vyera formed an "elaborate anticompetitive scheme to preserve a monopoly" on Daraprim. 

Law360 reported that U.S. District Judge Denise L. Cote denied Shkreli's request to omit previous anti-competitive behavior ahead of the Dec. 14 bench trial over the 5,000% price hike for the anti-parasitic Daraprim and the subsequent blocking of generic production of the drug. 

Shkreli became a poster boy of pharmaceutical infamy after the company now known as Vyera Pharmaceuticals acquired the 60-year old toxoplasmosis drug Daraprim and his follow-up laments that he didn't increase the price even higher.

While at Retrophin, which he also founded, Shkreli led the acquisition of Chenodal and Thiola and raised their prices by 400% and 2,000%, respectively. The government argued that it's similar behavior to what he did with Turing. 

In October, Shkreli argued that his past behavior surrounding the prices and competition for Chenodal and Thiola when he was the chief executive officer of Retrophin Pharma should not be allowed to be brought up in the coming trial. He explained that the government could not prove his alleged actions prevented generic competition.

However, Judge Cote ruled that the steps he undertook while at the helm of Retrophin "is sufficiently similar to the conduct at issue at trial to permit the inferences argued by the plaintiffs." The judge further noted that the anti-competitive behavior he showed while at Retrophin is relevant to his tenure at the helm of Turing. She added that the fact that Shkreli was unable to prevent generic competition to the Retrophin drugs is irrelevant. 

According to the FTC complaint, Turing "illegally restrained trade through restrictive distribution agreements that ensured that would-be generic entrants could not buy samples of Daraprim" that could be used in the method of trying to develop a generic. The government disputes that Daraprim patients would likely have saved tens of millions of dollars by buying generic versions of the toxoplasmosis drug. As a consequence of Turing's anticompetitive conduct, there is no generic version on the market today.

BioSpace previously reported that the FTC also noted Turing prevented competitors from reaching a critical ingredient used to manufacture Daraprim. The government claimed that Turing signed "data blocking" agreements, preventing distributors from selling Daraprim sales data to third-party data reporting companies. 

Manufacturers use this data to decide whether it is worth continuing the development of generic equivalents. With these arrangements, the defendants sought to keep potential generic competitors from accurately evaluating the market, the government stated in its 2020 complaint against Turing and Shkreli.

The FTC is seeking financial relief to "provide redress to purchasers" who overcompensated for Daraprim. The government is also seeking remedial injunctive relief that will restore competitive conditions to the market, halt anticompetitive behavior and stop Shkreli and Vyera from engaging in similar conduct in the future.

Shkreli was found guilty in 2017 on two charges of securities fraud and one charge of conspiracy to commit conspiracy fraud. Shkreli attempted to overturn his conviction last year by appealing to the U.S. Supreme Court, which was rejected. He is eligible for release in 2023.

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