Martin Shkreli, former Chief Executive Officer of Turing Pharmaceuticals, appearing before the House Committee on Oversight and Government Reform during a hearing titled “Developments in the Prescription Drug Market,” on February 4, 2016. Photo: Diego M. Radzinschi/ALM
On Jan. 14, 2022, the Hon. Denise Cote, U.S. District Judge for the Southern District of New York, issued her decision in Federal Trade Commission v. Shkreli, holding that Martin Shkreli, the former head of Vyera Pharmaceuticals, violated federal and state antitrust laws by allegedly interfering with the entry of generic competition for Vyera’s drug Daraprim. See FTC v. Martin Shkreli, No. 20CV00706 (DLC), 2022 WL 135026 (S.D.N.Y. Jan. 14, 2022). For his participation in the conduct, Judge Cote ordered Shkreli to disgorge $64.4 million in profits and banned him for life from participating in the pharmaceutical industry. Id. at *1. The court’s decision followed a seven-day bench trial in December. The New York Attorney General played a significant role in the case, bringing the action together with the Federal Trade Commission in federal court in New York. The attorneys general of six other states subsequently joined the action.
The case centered on Shkreli’s conduct after Vyera, formerly known as Turing Pharmaceuticals, purchased the rights to Daraprim, a medication used to treat potentially fatal parasitic infections. In 2015, after the purchase, Vyera raised the price of Daraprim from $17.50 to $750 per pill. It also moved Daraprim from retail distribution to a closed distribution system, and entered into agreements with the two primary manufacturers for Daraprim’s active pharmaceutical ingredient that restricted others’ access to that ingredient. Judge Cote held that, in doing so, Vyera made it difficult for generic manufacturers to obtain sufficient samples of Daraprim to conduct bioequivalence and other studies needed for FDA approval, thus delaying the entry of generic competition for at least 18 months. Judge Cote found that this conduct violated federal and state antitrust laws, and that Shkreli himself was personally liable for such conduct due to the control he exercised over the company.
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