Attorney General Bonta Moves to Hold Martin Shkreli, Infamous Pharma Bro, in Contempt for Defying Lifetime Pharmaceutical Industry Ban
OAKLAND — California Attorney General Rob Bonta today joined the Federal Trade Commission (FTC) and a bipartisan coalition of seven attorneys general in filing a motion and brief with the U.S. District Court for the Southern District of New York requesting that Martin Shkreli be found in civil contempt for violating the Permanent Injunction — a lifetime ban preventing him from participating in the pharmaceutical industry — that the coalition obtained against him on February 4, 2022. Shkreli, known as “Pharma Bro,” orchestrated an illegal scheme to stifle competition and keep low-cost generic competitors off the market. His scheme allowed him to drastically raise the price of Daraprim, a lifesaving drug that treats a common parasitic infection.
“Martin Shkreli showed complete disregard for lives when he orchestrated a scheme to increase the price of lifesaving medication by more than 4,000%. California took him to court, and he was appropriately banned for life from conducting business in the pharmaceutical industry,” said Attorney General Bonta. “But it seems Shkreli simply cannot help himself — he has been conducting business in the pharmaceutical industry. Today, alongside the FTC and a coalition of bipartisan attorneys general, we are asking a federal court to hold Shkreli in civil contempt for violating the Permanent Injunction.”
Daraprim is a drug that treats toxoplasmosis, a common parasitic infection that can morph into a potentially fatal organ infection in immunocompromised individuals. Until 2020, Daraprim was the only product approved by the U.S. Food and Drug Administration (FDA) containing pyrimethamine — the gold standard for treating toxoplasmosis. In 2015, Daraprim was a generally affordable treatment at a cost of $17.50 per tablet. When Shkreli and his companies acquired the rights to the drug in August of that year, they raised the price to $750 per tablet — an increase of more than 4,000%.
In 2022, California, other states, and the Federal Trade Commission won a 2020 lawsuit against Shkreli for violating federal and state antitrust laws. The district court’s Opinion and Order and subsequent Permanent Injunction found Shkreli liable for $64.6 million in excess profits resulting from the unlawful conduct and imposed a lifetime ban on Shkreli from participating in the pharmaceutical industry, including by acquiring or holding an ownership interest in a pharmaceutical company or taking any action to directly or indirectly influence or control the management or business of any pharmaceutical company.
Despite the Permanent Injunction, today’s motion for order to show cause argues that Shkreli appears to have been trading in pharmaceutical company stocks and taking other actions designed to affect the industry, such as providing investing advice and broadcasting his opinions about the management and business of many pharmaceutical companies via multiple social media platforms.
The coalition is seeking the following proposed sanctions:
- Divestment of Shkreli’s ownership interest(s) in any pharmaceutical company.
- A monetary fine in the amount of Shkreli’s profits from trading pharmaceutical company stocks since February 4, 2022, that violate the Permanent Injunction, plus pre-judgment interest.
- A complete sworn accounting of Shkreli’s trading in pharmaceutical company stocks from February 4, 2022, and a sworn financial statement.
- Appointment of an auditor at Shkreli’s expense to verify the accuracy and truthfulness of the sworn accounting and financial statement.
- Escalating consequences for failing to purge his contempt and for future violations, including but not limited to fines and incarceration.
Attorney General Bonta joins the FTC and the attorneys general of Illinois, New York, North Carolina, Ohio, Pennsylvania, and Virginia in making today’s announcement.
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