Shkreli’s Supreme Court Appeal Denied

By Jonathan Stempel

(Reuters) – The U.S. Supreme Court declined on Monday to hear former pharmaceutical company CEO Martin Shkreli’s challenge to a $64.6 million financial penalty imposed by a judge after he raised a lifesaving drug’s price by more than 4,000%.

The justices turned away Shkreli’s appeal of a lower court’s decision upholding the penalty, which equals the profits he and one of his former companies made by raising the price of the drug Daraprim in 2015. Shkreli, then in his early 30s, was given the nickname “Pharma Bro” in the media. His penalty was imposed in 2022 by U.S. District Judge Denise Cote in Manhattan.

Shkreli’s appeal did not contest a lifetime ban from the drug industry also imposed by Cote.

The judge cited Shkreli’s “particularly heartless and coercive” tactics in monopolizing Daraprim and keeping generic rivals off the market. Cote imposed the sanctions in a civil antitrust case brought by the U.S. Federal Trade Commission, along with the states of New York, California, Illinois, North Carolina, Ohio, Pennsylvania, and Virginia.

Shkreli requested the Supreme Court to review a January decision by the 2nd U.S. Circuit Court of Appeals, which upheld the $64.6 million penalty as well as the industry ban.

Now 41, Shkreli gained notoriety when, as chief executive of Turing Pharmaceuticals, he raised Daraprim’s price overnight to $750 per tablet from $17.50. Daraprim is used to treat a parasitic infection called toxoplasmosis, including in people with AIDS.

Shkreli later served more than four years in prison after being convicted in 2017 for defrauding investors in two hedge funds and scheming to defraud investors in another drugmaker.

He argued in his Supreme Court appeal that he should not owe the entire $64.6 million, claiming it was unfair to give up profits he never personally received or controlled. He noted that two other federal appeals courts have limited the liability of defendants in personal gains.

The states countered that Shkreli’s appeal to the Supreme Court was a “poor vehicle” to review his disgorged profits since lower courts never addressed the issue.

Since his May 2022 release from prison, Shkreli has worked as a software developer and as a consultant for a law office. He has also been sued by the digital art collective PleasrDAO for allegedly streaming a one-of-a-kind album by the hip-hop group Wu-Tang Clan, which PleasrDAO bought after the U.S. government seized it from Shkreli in his criminal case.