FTC targets ‘Pharma Bro’ Martin Shkreli over start-up
Commission holds that the convicted former pharma head may have violated his life-long ban from working in the life sciences industry | Shkreli is already convicted of conspiring to illegally increase the price of a life-saving drug.
“Pharma Bro” Martin Shkreli has failed to provide evidence that he hasn’t violated his life-long ban from working in the pharmaceutical industry, the US Federal Trade Commission (FTC) has said.
The FTC has filed a motion at the US District Court for the Southern District of New York asking the federal judge to hold Shkreli in contempt, and confirmed the move in a statement released on January 20.
The FTC cited Shkreli’s failure to cooperate with investigation into possible violations of a court order handed down last year.
In January 2022, US District Court Judge Denise Cote held that Shkreli orchestrated an illegal anticompetitive scheme to perpetuate a monopoly for the life-saving drug Daraprim, a treatment for a rare, potentially fatal parasitic infection known as toxoplasmosis.
Finding that Shkreli’s conduct was “egregious, deliberate, repetitive, long-running, and ultimately dangerous,” the court imposed a lifetime ban against Shkreli participating in the pharmaceutical industry and found Shkreli liable for $64.6 million in disgorgement.
According to the FTC, Shkreli has failed to comply with requests to submit documents and sit for an interview as part of their investigation into whether he has broken the order with the formation of his new company, “Druglike”.
Druglike purports to revolutionise early-stage drug discovery through a decentralised computing network, according to the FTC.
Shkreli is required to provide the information under compliance provisions of a February 2022 order.
The FTC first invoked the order’s compliance reporting and access-to-information provisions in October 2022, but it alleges that Shkreli has disregarded the agency’s repeated requests for him to provide a compliance report and access to relevant records, and to sit for an interview.
“Martin Shkreli’s failure to comply with the court’s order demonstrates a clear disregard for the law,” said Holly Vedova, director of the FTC’s Bureau of Competition.
“The FTC will not hesitate to deploy the full scope of its authorities to enable a comprehensive investigation into any potential misconduct.”
In its filing, the FTC and state enforcers asked the court for an order to show cause why Shkreli should not be held in civil contempt for violating these provisions and to order Shkreli to comply with these information requests within 21 days of the court’s decision.
The FTC and state enforcers initiated the case in January 2020 against Shkreli, another individual executive, and the companies they founded, Vyera Pharmaceuticals, and Phoenixus.
The court found that the defendants’ anticompetitive scheme prevented generic competition and allowed them to protect their Daraprim price increase from $17.50 per tablet to $750 per tablet.
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