(WNY News Now) – NEW YORK – New York Attorney General Letitia James announced today that a federal appeals court has upheld a court order that New York, the Federal Trade Commission (FTC), and six other states won against convicted criminal Martin Shkreli for engaging in illegal and monopolistic behavior as the CEO of Vyera Pharmaceuticals (previously known as Turing Pharmaceuticals). The Court of Appeals for the Second Circuit affirmed the January 2022 decision of the District Court for the Southern District of New York, which found that Shkreli violated both federal and state laws by engaging in an illegal scheme to maintain a monopoly over a lifesaving drug, Daraprim, after increasing its price by over 4,000 percent. As a result, Shkreli is banned for life from the pharmaceutical industry and ordered to pay $64.6 million.
“For years, Martin Shkreli and his company made millions by putting vulnerable people at great risk and denying lifesaving medication. Our latest victory once again holds him accountable,” said Attorney General James. “New Yorkers can rest assured that I will always take action against those who put their personal profits over people’s health. I want to thank FTC and my fellow attorneys general for their hard work and collaboration to ensure Mr. Shkreli is brought to justice.”
In August 2015, Shkreli’s company, Vyera, acquired Daraprim and increased the price dramatically overnight from $17.50 per pill to $750 per pill, an over 4,000 percent increase. At the time of Shkreli’s scheme, Daraprim was the only FDA-approved drug for the treatment of toxoplasmosis, a parasitic disease that poses serious and often life-threating consequences for those with compromised immune systems, including babies born to women infected with the disease and individuals with the Human Immunodeficiency Virus (HIV). Vyera — under Shkreli’s control — then engaged in anticompetitive conduct to delay and impede generic competition. The high price and distribution changes Shkreli made limited access to the drug, forcing many patients and physicians to make difficult and risky decisions for the treatment of a life-threatening disease.
In January 2020, Attorney General James and FTC filed a lawsuit against Vyera, Shkreli, and his business partner — Kevin Mulleady — for anticompetitive behavior that allowed the defendants to charge an exorbitantly high price for Daraprim. In April 2020, the states of California, Illinois, North Carolina, Ohio, Pennsylvania, and Virginia joined Attorney General James’ and FTC’s lawsuit.
After a seven-day trial in December 2021, the District Court for the Southern District of New York issued a decision and order largely agreeing with the states and FTC. The Court’s decision found Shkreli liable on each of the claims presented, banned him for life from participating in the pharmaceutical industry in any capacity, and ordered him to pay the plaintiff states $64.6 million in disgorgement. In addition, Vyera and Mulleady entered into an agreement that ended their illegal and monopolistic behavior, required the company to pay up to $40 million, and banned Mulleady from the pharmaceutical industry for seven years.
The decision by the Court of Appeals for the Second Circuit unanimously affirms the entirety of the Southern District’s decision. Citing “Shkreli’s pattern of past misconduct, the obvious likelihood of its recurrence, and the life-threatening nature of its results,” the Second Circuit determined that the Southern District acted properly by imposing its order against Shkreli.
Attorney General James wishes to thank the staff and leadership at FTC for their partnership in this important matter, as well as the assistance of the staff and leadership of its co-plaintiff states.
The Office of the Attorney General’s (OAG) appeal was handled by Senior Assistant Solicitor General Philip Levitz, Deputy Solicitor General Judith N. Vale, and Solicitor General Barbara D. Underwood, all of the Division of Appeals and Opinions.
The OAG’s litigation in the district court was handled by Assistant Attorneys General Saami Zain and Jeremy Kasha, Senior Enforcement Counsel Bryan Bloom, Deputy Bureau Chief Amy McFarlane, Bureau Chief Elinor R. Hoffmann and Legal Assistant Arlene Leventhal — all of the Antitrust Bureau. The Antitrust Bureau is a part of the Division for Economic Justice, which is overseen by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Jennifer Levy.
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