By Dan Mangan March 17, 2022
Source: CNBC
Photo Source: Unsplash, Elsa Olofsson
Judge rejects bid by ‘Pharma Bro’ Martin Shkreli to delay paying more than $24.6 million in FTC lawsuit related to medication
KEY POINTS
A judge denied “Pharma Bro” Martin Shkreli’s request to delay paying the nearly $25 million he owes as part of a civil case judgment for engaging in anticompetitive conduct to protect his drug company’s profits.
In January, the same Manhattan federal judge banned Shkreli for life from the pharmaceuticals industry and ordered him to pay $64.6 million he earned from hiking the price of the lifesaving drug Daraprim by more than 4,000% overnight.
Vyera Pharmaceuticals, of which Shkreli was founder and CEO, already has paid a $40 million settlement to plaintiffs in the case, which included the FTC and seven states.
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, center, pauses while speak to members of the media with his attorney Benjamin Brafman, right, outside federal court in the Brooklyn borough of New York, U.S., on Friday, Aug. 4, 2017.
A judge Thursday denied a request by notorious “Pharma Bro” Martin to postpone paying nearly $25 million he owes as part of a judgment in a civil case for engaging in anticompetitive conduct to protect his drug company’s profits.
The ruling comes two months after the same Manhattan federal judge banned Shkreli, 39, for life from the pharmaceuticals industry and ordered him to pay a total of $64.6 million he earned from hiking the price of the lifesaving drug Daraprim by more than 4,000% overnight.
Shkreli’s illegal conduct delayed the entry of a competitor to the anti-parasitic medication for at least 18 months after the price boost, the judge said.
Vyera Pharmaceuticals, the company Shkreli founded and served as CEO, already has paid a $40 million settlement to plaintiffs in the case, which included the Federal Trade Commission and seven states, including New York and California.
That payout reduced what Shkreli owed, to $24.6 million. It is not clear if Shkreli will have the funds to satisfy the judgment. A lawyer for Shkreli did not immediately respond to a request for comment.
Shkreli is due to be released from prison in November after serving the bulk of a seven-year sentence for securities fraud that is unrelated to the civil case involving Daraprim.
On March 7, Shkreli asked Judge Denise Cote to postpone execution of the judgment ordering the payment pending the outcome of an appeal that he might file.
Pharma Bro Martin Shkreli ordered to return $64M for jacking up drug price Shkreli said in a court filing that as security for the money he owes he would put up the remainder of his interest in stock shares of Phoenixus AG, a Swiss biotech company that is Vyera’s parent.
Shkreli told Cote he had no other significant assets to post as a bond against the judgment or to pay for the judgment itself.
His Phoenixus shares currently are being held by a receiver to satisfy a $2.6 million judgment against Shkreli in an unrelated civil case.
Cote, in her ruling Thursday denying Shkreli’s request, noted that Phoenixus “is a private company, and it is not clear what the market value of its shares is or even when that value will be determined.”
The judge also wrote that “it is even unclear whether the sale of those shares will be sufficient to satisfy the judgment of” $2.6 million he owes in the other civil case.
“Shkreli’s proposed bond is insufficient to ensure that” the plaintiffs will recover all of the judgment they are owed, Cote wrote.
Shkreli first gained widespread notoriety in 2015 for his unapologetic increase in the price of Daraprim, an anti-parasitic medication used to treat people with HIV, pregnant women, and babies.
In her original ruling against Shkreli in the case, Cote wrote that he “initiated a scheme to block the entry of generic drug competition so that he could reap the profits from Daraprim sales for as long as possible” when he increased the price of the drug.
“Through his tight control of the distribution of Daraprim, Shkreli prevented generic drug companies from getting access to the quantity of Daraprim they needed to conduct testing demanded by the Food and Drug Administration,” the judge wrote.
And through “exclusive supply agreements, Shkreli also blocked off access to the two most important manufacturers of the active pharmaceutical ingredient ... for Daraprim.”
Shkreli was arrested in 2016 on charges accusing him of defrauding investors in two hedge funds he ran years before founding Turing Pharmaceuticals, as Vyera was formerly known, and with using their funds to found another drug company, Retrophin.
Shkreli was also accused of looting Retrophin to pay back investors for their losses in his hedge funds.
He was convicted at trial in 2017 in Brooklyn federal court of several charges in the case.
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