FTC: Shkreli may have violated lifetime pharma ban, should be despised

FTC: Shkreli may have violated lifetime pharma ban, should be despised

Martin Shkreli, former CEO of Turing, smirked through a congressional hearing.
Enlarge / Martin Shkreli, former CEO of Turing, smirked through a congressional hearing.

Notorious ex-pharmaceutical executive Martin Shkreli is in renewed trouble with the Federal Trade Commission, which announced today that the convicted fraudster failed to cooperate in the commission’s investigation into whether he violated his lifetime ban from the pharmaceutical industry by selling last year formed a company called “Druglike, Inc.”

In a court filing today, the FTC asked a federal judge in New York to find Shkreli in contempt for failing to provide the FTC with requested documents and for failing to make himself available for an interview. Under the 2022 court order banning him from involvement in the pharmaceutical industry for life, Shkreli is required to provide the FTC with such information, the commission noted.

“Martin Shkreli’s failure to comply with the court’s order demonstrates a clear disregard for the law,” said Holly Vedova, director of the FTC’s competition bureau, in a press release. “The FTC will not hesitate to use the full extent of its agencies to facilitate a full investigation of possible wrongdoing.”

At the heart of the dispute is whether Shkreli’s co-founding of Druglike violates his lifetime ban from the pharmaceutical industry, which was in response to Shkreli’s infamous move to increase the price of the cheap, life-saving antiparasitic drug Daraprim, from $17.50 a pill $750 per pill in 2015. In the January 2022 court decision that barred him from the industry, U.S. District Judge Denise Cote wrote:

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Banning an individual from an entire industry and restricting their future ability to earn a living in that sector is a serious means and must be done with care and only when justice requires it. Shkreli’s egregious, willful, repetitive, prolonged, and ultimately dangerous unlawful conduct warrants the issuance of an injunction of this magnitude.

The injunction prevents Shkreli from “participating in the pharmaceutical industry in any capacity.”

Still, Shkreli’s new venture appears squarely in the realm of the pharmaceutical industry. In a press release last year, the company said it would “revolutionize” early-stage drug discovery with a decentralized computing network “powered by Web3 technology.” Overall, the company’s web-based suite has been touted as enabling drug developers to perform the development tasks of “target identification, drug design, and tools for both building and running large-scale virtual screening workflows.”

Shkreli is quoted in the press release as saying that users “could be held responsible and rewarded for discovering the next breakthrough drug” and that the technology will “disrupt the economics of the drug business” and compete with “pharmaceutical giants.”

The FTC said in its announcement today that it first sought information about the new company and its compliance with its lifetime ban in October, but that Shkreli disregarded the agency’s “repeated requests.” The FTC not only requested that the court find Shkreli in contempt, but also requested that Shkreli be ordered to comply with the FTC’s investigation within 21 days of the court’s decision.

The FTC also noted in its court filing that Shkreli has not yet paid any of the $64.6 million in severance pay imposed on him alongside his lifetime ban.