‘Pharma bro’ Martin Shkreli banned for life from drug industry

Shkreli defended the decision as capitalism at work and said insurance and other programs ensured that people who need Daraprim would ultimately get it.

But the move sparked outrage from the medical community to Congress and was a rare source of bipartisan agreement on the 2016 presidential campaign trail, where Democrat Hillary Clinton called it price-gouging and future President Donald Trump, a Republican, called Shkreli “a spoiled brat.”

Shkreli eventually offered hospitals half off — still amounting to a 2,500 per cent increase. But patients normally take most of the weeks long treatment after returning home, so they and their insurers still faced the $US750-a-pill price.

Shkreli resigned as Turing’s CEO in 2015, a day after he was arrested on securities fraud charges related to two failed hedge funds he ran before getting into the pharmaceutical industry. He was convicted of lying to investors and cheating them out of millions and is serving a seven-year sentence at a federal prison in Allenwood, Pennsylvania, and is due to be released in November.

The FTC and seven states — New York, California, Illinois, North Carolina, Ohio, Pennsylvania and Virginia — alleged in their case that Vyera hiked the price of Daraprim and illegally created “a web of anticompetitive restrictions” to prevent other companies from creating cheaper generic versions. Among other things, they alleged, Vyera blocked access to a key ingredient for the medication and to data the companies would want to evaluate the drug’s market potential.

Vyera and its parent company, Phoenixus AG, settled last month, agreeing to provide up to $US40 million in relief over 10 years to consumers and to make Daraprim available to any potential generic competitor at the cost of producing the drug. Former Vyera CEO Kevin Mulleady agreed to pay $US250,000 if he violates the settlement, which barred him from working for a pharmaceutical company” for seven years.

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Shkreli proceeded to trial but opted not to attend the proceedings, instead submitting a written affidavit that served as his testimony.

The trial record included evidence showing Shkreli kept in regular contact with company executives, even after he went to prison. A spreadsheet kept by one executive showed more than 1,500 contacts with Shkreli between December 2019 and July 2020.

The record also included recordings of conversations Shkreli had from prison in which he discussed his control of Vyera, saying he had “no problem firing everybody,” boasting how he controlled the board, and comparing himself to Facebook founder Mark Zuckerberg and the pharmaceutical company to the social media behemoth.

Zuckerberg “just happens to own the thing, and that’s the way it is,” Shkreli said in one of the recordings. You “can’t go in there and tell Zuckerberg what to do.”

In 2019, Shkreli was sent to solitary confinement for a time after prison officials discovered him using a contraband smartphone to conduct business.

“Whether he used a smuggled phone or the prison’s authorised phones, he stayed in touch with Vyera’s management and exercised his power over Vyera as its largest shareholder,” Cote wrote.

AP

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