Staring down a lifetime ban from the pharmaceutical industry, Martin Shkreli appealed the verdict handed down to him last month in a widely watched antitrust case. Last Friday, however, the federal judge who delivered that ruling deflected the “Pharma Bro’s” objections blow by blow.
Judge Denise Cote of New York’s Southern District upheld Shkreli’s exile from the industry and clarified exactly what sort of actions the former CEO is barred from taking part in. Not only is Shkreli prohibited from working in biopharma, but he can’t talk to industry friends or wax poetic about it on his blog, either, Cote said in a 10-page opinion filed Friday.
The decision comes after Cote in January ordered Shkreli to pay $64.6 million in disgorgement linked to profits he made from Turing Pharmaceuticals' now-infamous Daraprim drug pricing scandal. The judge also ordered that Shkreli be barred from the pharmaceutical industry for life.
In the appeal, Shkreli's lawyers argued that parts of the injunction were “vague and overbroad,” the court filings state. They questioned whether the ban from working at a drugmaker would prevent him from taking a job at a university engaged in pharmaceutical research or an advertising company that helps with drug marketing. Shkreli can do neither, Cote said, acknowledging that the injunction defines a pharmaceutical company as “any entity engaged in the research, development, manufacture, commercialization, or marketing of any drug product or API.”
Shkreli's lawyers also objected to the breadth of activities he’s barred from and asked whether he could talk about business decisions with friends who work at pharmaceutical companies. The injunction prevents Shkreli from “[p]articipating in the formulation, determination, or direction of any business decisions of any pharmaceutical company,” Cote wrote. The terms of Shkreli's punishment are needed “to control the very real risk that he will continue to participate in the industry by working through others employed in the industry, as he has done while incarcerated,” the court documents state.
Shkreli's lawyers also maintained that the injunction was vague and violated his First Amendment rights to free speech. The former pharma exec was curious whether he could discuss the industry on his blog, which he’s run from behind bars. The judge’s answer was, again, a firm "no."
“While First Amendment rights deserve of great protection, Shkreli’s violations of the antitrust laws have lost for him the right to speak publicly about the pharmaceutical industry when such speech is uttered to influence the management or business of a Pharmaceutical Company,” Cote wrote.
Shkreli's legal team also argued that a requirement to sell his shares in Vyera Pharmaceuticals’ parent company, Phoenixus, violated his Fifth Amendment rights. They said he should be able to retain his shares so long as he can’t vote with them, and they objected to a 180-day deadline set out for him to sell his stock.
The requirements aren’t vague or overly burdensome nor do they violate Shkreli’s constitutional rights, Cote argued.
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Last month, Cote ordered Shkreli to pay $64.6 million in disgorgement related to money he earned from stifling competition after hiking the price of toxoplasmosis drug Daraprim. Shkreli, who is serving a seven-year sentence for a separate fraud conviction, was handed a lifetime ban from the pharmaceutical industry, too.
The decision came just a few weeks after Vyera, formerly known as Turing, agreed to pay up to $40 million to settle charges that it engaged in anti-competitive practices to ward off generics and maintain monopoly profits from its more than 4,000% overnight price hike on the med.
Back in 2015, Turing infamously jacked up the price from Daraprim from $17.50 to $750 per pill. Outrage ensued, and Shkreli dug his heels in, earning the reputation of the “most hated man in America.”
Meanwhile, Blue Cross and Blue Shield of Minnesota last week settled a class-action lawsuit against Shkreli, his former company and another former Turing CEO, Kevin Mulleady, for $28 million.