[co-author: Stephanie Kozol]*
On January 23, the U.S. Court of Appeals for the Second Circuit affirmed a district court ruling that Martin Shkreli, CEO of Vyera Pharmaceuticals (Vyera), violated federal and state laws by engaging in illegal and anticompetitive behavior.
The lawsuit was a joint initiative by the Federal Trade Commission (FTC) and six bipartisan state attorneys general (AGs) from New York, California, Ohio, Pennsylvania, Illinois, North Carolina, and Virginia that alleged Skhreli engaged in an illegal scheme to maintain a monopoly over lifesaving drug, Daraprim, after it increased the price by more than 4,000%. They claimed that Vyera acquired Daraprim in August 2015 and increased the price dramatically from $17.50 per pill to $750 per pill. At the time, the drug was the only FDA-approved drug for the treatment of toxoplasmosis, a parasitic disease that poses serious and often life-threatening consequences for those with compromised immune systems.
The Second Circuit reinforced the district court’s decision, holding Shkreli liable for $64.6 million in excess profits resulting from the unlawful conduct and imposing a lifetime ban from working in the pharmaceutical industry. This is in addition to the 2021 settlement of $40 million that the regulators reached with Vyera and one of the former CEOs, Kevin Mulleady. Mulleady was also banned from the pharmaceutical industry for seven years.
Why It Matters
State AGs and the FTC are authorized to scrutinize alleged anti-competitive behavior. This win is the latest in a line of actions demonstrating how regulators are going after corporate executives, such as Shkreli, who are perceived to be personally engaged in unlawful conduct. It also underscores that that regulators are focused on policing conduct that may increase health care costs or decrease access to critical medications.
*Senior Government Relations Manager
