"Pharma Bro" Banned from Pharma Industry, Ordered to Return $64 Million
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Pharma Bro Martin Shkreli has been banned from future involvement with the pharmaceutical industry and has been ordered to return $64.6 million in profits he and his former company, Vyera Pharmaceuticals, which was formerly known as Turing, earned from a 5,000% increase on the toxoplasmosis drug, Daraprim.
The ruling was handed down by U.S. District Court Judge Denise Cotes, who presided over a December bench trial where the government showed that the jailed Shkreli was still exerting control over Vyera Pharmaceuticals from behind bars. The government introduced recordings that indicate Shkreli was advising the company on ways to prevent generic versions of Daraprim from hitting the markets.
In 2015, the then Turing Pharmaceuticals acquired Daraprim for $55 million. Following that deal, the company immediately jacked the price from $17.50 per tablet to $750 per tablet. Until 2020, Daraprim was the only drug approved by the U.S. Food and Drug Administration for toxoplasmosis, an infection caused by a single-celled parasite that typically impacts pregnant women and HIV patients with weakened immune systems. After decades of being the only drug on the market for toxoplasmosis, the FDA approved a generic version, pyrimethamine, in 2020.
Last month, Vyera agreed to pay a $40 million fine to settle federal allegations over its attempts to prevent generic competition after the Federal Trade Commission and several states filed a complaint against Vyera in 2020. In its complaint, the Commission alleged an "elaborate anticompetitive scheme to preserve a monopoly" on Daraprim. From there, Turing, under the direction of Shkreli prior to his incarceration, jacked the drug's price by 5,000%.
Despite Shkreli serving time in federal prison for securities fraud charges, the courts showed that he maintained control over the company. Shkreli never showed remorse for the massive price hike on the drug. Prior to his incarceration, he defended the decision and lamented he had not increased the price even more. During the bench trial, he maintained that position. The AP reported that in an affidavit submitted to the court, he claimed the price hike was "capitalism at work" and added that despite the increase, insurance plans and other benefits programs would ensure that people who needed Daraprim would receive it.
During the seven-day trial, evidence was introduced that showed Shkreli kept in regular contact with Vyera executives. Evidence included a spreadsheet maintained by a Vyera executive that showed more than 1,500 contacts with Shkreli between December 2019 and July 2020. Evidence also had recorded conversations where Shkreli discussed his company control from behind bars. In fact, in 2019, he was sent to solitary confinement in federal prison after it was discovered he was using a contraband cell phone to conduct business from behind bars.
"Shkreli was no side player in, or a 'remote, unrelated' beneficiary of Vyera's scheme," Cote wrote in a 135-page opinion, the AP reported. "He was the mastermind of its illegal conduct and the person principally responsible for it throughout the years."
California Attorney General Rob Bonta applauded Cote's decision.
California was one of the seven states that joined the FTC complaint against Shkreli and Vyera. In a brief statement, Bonta said the judge's decision would ensure that Shkreli does not attempt to corner the market on drugs with no generic competition again.
"Without regard for the lives he put at risk, Martin Shkreli orchestrated a scheme to raise the price of a vital medication from less than $20 to $750 — making it nearly impossible for the people who rely on the medication to access or afford it," Bonta said in a statement. "Shkreli will be held accountable for his misconduct, and I hope it sends a message that similar conduct will not be tolerated."