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U.S. Judge Orders ‘Pharma Bro’ Martin Shkreli to Pay Back $64 Million and Bars Him From Pharma Industry

Martin Shkreli must return US$64.6 million in profits he and his former company made from raising the price of the life-saving drug Daraprim, a federal judge ruled on Friday while restraining the provocative and jailed ex-CEO to participate in the pharmaceutical industry for the rest of his life.

U.S. District Judge Denise Cote’s decision came weeks after a seven-day trial in December. The Federal Trade Commission and seven states filed suit in 2020 against the man dubbed “Pharma Bro” in the media.

Shkreli’s attorney did not immediately respond to a request for comment.

Shkreli was CEO of Turing Pharmaceuticals – later Vyera – when he hiked the price of Daraprim from $13.50 to US$750 per pill after securing exclusive rights to the decades-old drug in 2015. He treats a rare parasitic disease that strikes pregnant women, cancer patients and AIDS patients.

He defended the decision as working capitalism and said insurance and other programs ensured that people who needed Daraprim would eventually get it.

Daraprim treats a rare parasitic disease that strikes pregnant women, cancer patients and AIDS patients. (David Gray/Reuters)

But the move sparked outrage from medical centers in Congress until the 2016 presidential campaign, when Hillary Clinton called it a price hike and future President Donald Trump called Shkreli a “spoiled brat.”

Shkreli eventually offered hospitals a halving, which is still a 2,500% increase. But patients normally take most of a week’s treatment after returning home, so they and their insurers are still faced with the price of $750 a pill.

He resigned as CEO of Turing in 2015, a day after he was arrested on securities fraud charges related to the hedge funds he ran before entering the pharmaceutical industry. He was found guilty and is serving a seven-year prison sentence.

Vyera Pharmaceuticals LLC was sued in federal court in New York by the FTC and seven states: New York, California, Illinois, North Carolina, Ohio, Pennsylvania and Virginia.

They alleged that Vyera raised the price of Daraprim and illegally created “a web of anti-competitive restraints” to prevent other companies from creating cheaper generic versions, including blocking their access to a key drug ingredient and data companies would like to assess the market potential of the drug.

Vyera and its parent company, Phoenixus AG, settled last month, agreeing to provide up to US$40 million in 10-year consumer relief and to make Daraprim available to any potential generic competitor at the price of the production of the drug.

Former Vyera CEO Kevin Mulleady has agreed to pay US$250,000 if he violates the settlement, which bars him from working for a pharmaceutical company for seven years.

Shkreli was put on trial.