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Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, exits court in New York, US, on Wednesday, Oct. 4, 2023.
Yuki Iwamura | Bloomberg | Getty Images
In an unprecedented ruling, a federal appeals court upheld a lifetime ban on “pharma bro” Martin Shkreli from working in the pharmaceuticals industry, along with an order to pay up to $64.6 million in disgorged profits for blocking competition to the drug Daraprim after hiking its price by more than $700 per pill.
The unanimous ruling by a three-judge panel on the 2nd U.S. Circuit Court of Appeals came nearly two years after a New York federal district court judge slapped the ban on Shkreli for the monopolistic behavior of his then-drug company in the distribution of Daraprim.
The ban was in response to a civil lawsuit filed by the Federal Trade Commission and seven states, among them New York and California.
The ruling Tuesday said, “The district court’s injunction was a reasonable measure to protect the public from the risk of recurring anticompetitive conduct in the pharmaceutical industry by Shkreli.”
“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.”
Shkreli first gained widespread notoriety in 2015 when his company raised the price of that life-saving drug by more than 4,000% overnight.
He later served a prison term for federal securities fraud and other financial crimes not related to his controversial price hike of Daraprim.
“The Second Circuit’s decision is a win for consumers seeking affordable, lifesaving medication and clearly demonstrates that corporate executives will be held personally liable for anticompetitive actions that they help orchestrate,” said Henry Liu, director of the FTC’s Bureau of Competition.
Meanwhile, New York Attorney General Letitia James celebrated the decision, saying, “For years, Martin Shkreli and his company made millions by putting vulnerable people at great risk and denying lifesaving medication. Our latest victory once again holds him accountable.”
Shkreli’s lawyer, Benjamin Brafman, told CNBC, “The lifetime ban is too severe.”
“The courts should encourage real geniuses like Mr. Shkreli to work in the industry especially … when his conviction for fraud had nothing to do with the pharmaceutical industry,” Brafman said.
The plaintiffs had sued Shkreli and his companies, Vyera Pharmaceuticals and Phoenixus AG, and his former business partner Kevin Mulleady for violations of antitrust laws in preventing generic drugmakers from getting access to Daraprim that they needed to conduct testing on.