'Pharma Bro' Martin Shkreli ordered to return $64m in profits

US judges ban Shkreli from pharmaceutical industry indefinitely

Martin Shkreli was head of Turing Pharmaceuticals — later Vyera — when it hiked the price of Daraprim from $13.50 to $750 per pill after obtaining exclusive rights to the decades-old drug in 2015. AP

Martin Shkreli must return $64.6 million in profits he and his former company reaped from raising the price of the life-saving drug Daraprim, a US federal judge ruled on Friday, while also barring the provocative, jailed former chief executive from participating in the pharmaceutical industry for the rest of his life.

US District Judge Denise Cote's ruling came several weeks after a seven-day bench trial in December. The Federal Trade Commission and seven states brought the case in 2020 against the man called “Pharma Bro” in the media.

Shkreli was head of Turing Pharmaceuticals — later Vyera — when it jacked up the price of Daraprim from $13.50 to $750 per pill after obtaining exclusive rights to the decades-old drug in 2015. It treats a rare parasitic disease that strikes pregnant women as well as cancer and Aids patients.

He rationalised the decision as capitalism at work and said insurance and other programmes ensured that people who need Daraprim would ultimately receive it.

But the move sparked outrage in medical centres and the US Congress, and even made its way up to the 2016 presidential campaign trail, when Hillary Clinton termed it price-gouging and then future president Donald Trump 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 $750-a-pill price.

He resigned as Turing's chief executive in 2015, a day after he was arrested on securities fraud charges related to hedge funds he ran before entering the pharmaceuticals industry. He was convicted and currently serving a seven-year prison sentence.

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

They alleged that Vyera increased the price of Daraprim and illegally created “a web of anticompetitive restrictions” to prevent other companies from creating cheaper generic versions by, among other things, blocking their access to a key ingredient for the medication and to data the companies would need to evaluate the drug’s market potential.

Vyera and its parent company, Phoenixus AG, settled last month, agreeing to provide up to $40m 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 chief executive Kevin Mulleady agreed to pay $250,000 if he violates the settlement, which also barred him from working for a pharmaceutical company for seven years.