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Federal judge bans Martin Shkreli from drug industry, orders $64M repayment in monopoly case

Federal judge bans Martin Shkreli from drug industry, orders $64M repayment in monopoly case

19.01.2022 | Lithin Thomas | Hidayatullah National Law U., IN JANUARY 15, 2022 05:14:05 PM | 378

The US District Court for the Southern District of New York Friday banned disgraced pharmaceutical executive Martin Shkreli for life from the pharmaceutical industry for using illegal tactics to keep other Daraprim (pyrimethamine) drug manufacturers out of the market.

Daraprim is used to treat toxoplasmosis, which threatens the lives of people with weakened immune systems, including individuals with the Human Immunodeficiency Virus (HIV). After acquiring the drug from Impax Laboratories in 2015, Shkreli and Vyera increased the price of the drug from $17.50 to $750 per tablet overnight.

The US Federal Trade Commission (FTC) and seven states brought the case against Shkreli, Vyera Pharmaceuticals and CEO Kevin Mulleady in January of 2020. Vyera and Mulleady settled with the FTC and states before trial.

Shkreli’s company blocked generic drugmakers by deploying various measures including exclusive supply agreements with Pyrimethamine API suppliers, an important component involved in the production of Daraprim. District Judge Denise Cote held that these contracts imposed an unreasonable restraint and had an adverse effect on competition by delaying other manufacturers’ entry into the market. She concluded that Shkreli’s violations were not isolated incidents but rather continuous ones with a serious risk of being repeated again. Therefore, Judge Cote granted a permanent injunction against Shkreli for life, banning him from participating in the pharmaceutical industry in any capacity.

The court also found Shkreli liable for various violations of the Sherman Act and held him individually liable for the disgorgement, or “return of the wrongdoer’s net unlawful profits,” in the amount of $64.6 million to victims across the country.

He is currently serving a seven-year prison sentence for two counts of securities fraud.

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