Pharma boss barred from industry for life over price gouging

Martin Shkreli raised price of life-saving drug from $13.50 to $750 a tablet overnight

Martin Shkreli has been barred for life from the pharmaceuticals industry  for anticompetitive practices after inflating the price of a life-saving drug. Photograph: Susan Walsh/AP Photo

Martin Shkreli has been barred for life from the pharmaceuticals industry for anticompetitive practices after inflating the price of a life-saving drug. Photograph: Susan Walsh/AP Photo

 

Martin Shkreli, the former pharmaceutical executive best known for unapologetically hiking the price of a lifesaving medication, must repay $64.6 million in excess profits and will be barred for life from the drug industry for violating antitrust law, a US court ordered on Friday.

Shkreli is serving a seven-year prison sentence for defrauding investors related to his work running two hedge funds and a different pharmaceutical company.

That conviction is unrelated to the drug-pricing saga that elevated him to notoriety. He is expected to be released this year.

In 2015, Shkreli – then a pharmaceutical entrepreneur in his early 30s not well known outside his industry – acquired a decades-old drug known as Daraprim, which is used to treat a life-threatening parasitic infection, and raised its price to $750 a tablet, from $13.50.

The move alarmed politicians and the public, who were already worried about rising drug prices and the role that pharmaceutical companies can play in making medicines unaffordable.

Most pharmaceutical executives raise prices more quietly and gradually, and with reassurances about ensuring patient access, but Shkreli seemed unrepentant. He became known as “pharma bro” for his brash attitude in the face of criticism. The BBC called him possibly “the most hated man in America”.

On Friday, Judge Denise Cote of US district court for the southern district of New York ruled that Shkreli had tried to maintain a monopoly over Daraprim through anti-competitive tactics.

The lawsuit had been brought by the Federal Trade Commission and the attorneys general of seven states, including New York.

Violations

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 of Daraprim because of that conduct.

The court found that, under Shkreli’s control, Vyera had changed the way the drug was distributed and impeded competition in the generic market. Consumers were harmed by higher prices and fewer options for the drug, “forcing many patients and physicians to make difficult and risky decisions for the treatment of life-threatening diseases”, the New York attorney general’s office said in a news release.

In 2020, the Food and Drug Administration approved the first generic version of Daraprim.

The court opinion said Shkreli’s “anticompetitive conduct at the expense of the public health was flagrant and reckless”.

Lawyers for Shkreli did not immediately return a request for comment Friday. Shkreli repeatedly defended his decision to raise the price of Daraprim, saying the profits would allow his company to develop better anti-parasitic drugs.

When sentenced for his securities fraud conviction, he said he had never been motivated by money and had made mistakes in trying to bolster his reputation. – This article originally appeared in The New York Times