FTC: Shkreli may have violated lifetime pharma ban, should be held in contempt

Shkreli’s latest company, Druglike, may run afoul of his lifetime pharma ban.

Beth Mole – Jan 20, 2023 5:21 pm | 182

Martin Shkreli, former CEO of Turing, smirked his way through a congressional hearing. Credit: CSPAN

Infamous ex-pharmaceutical executive Martin Shkreli is yet again in trouble with the Federal Trade Commission, which announced today that the convicted fraudster has failed to cooperate with the commission’s investigation into whether he violated his lifetime ban from the pharmaceutical industry by starting a company last year 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 turn over requested documents to the FTC and failing to make himself available for an interview. Under the 2022 court order barring him from involvement in the pharmaceutical industry for life, Shkreli is required to provide such information to the FTC, the commission noted.

“Martin Shkreli’s failure to comply with the court’s order demonstrates a clear disregard for the law,” Holly Vedova, director of the FTC’s Bureau of Competition, said in a press release. “The FTC will not hesitate to deploy the full scope of its authorities to enable a comprehensive investigation into any potential misconduct.”

At the center of the dispute is whether Shkreli’s co-founding of Druglike runs afoul of his lifetime ban from the pharmaceutical industry, which was in response to Shkreli’s infamous move to raise the price of the cheap, life-saving anti-parasitic drug, Daraprim, from $17.50 a pill to $750 a pill in 2015. In the January 2022 court ruling barring him from the industry, US District Judge Denise Cote wrote:

Banning an individual from an entire industry and limiting his future capacity to make a living in that field is a serious remedy and must be done with care and only if equity demands. Shkreli’s egregious, deliberate, repetitive, long-running, and ultimately dangerous illegal conduct warrants imposition of an injunction of this scope.

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

Yet, Shkreli’s new company 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 “enabled by Web3 technology.” Overall, the company’s web-based suite was touted as allowing drug developers to carry out the development tasks of “target identification, drug design, and tools for both constructing and running large-scale virtual screening workflows.”

Shkreli is quoted in the press release saying that users “might be responsible and rewarded for discovering the next breakthrough medicine” 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 had initially sought information about the new company and his compliance with his lifetime ban in October but that Shkreli disregarded the agency’s “repeated requests.” In addition to requesting the court find Shkreli in contempt, the FTC also asked 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 so far failed to pay any of the $64.6 million in disgorgement he was ordered to pay alongside his lifetime ban.