US Supreme Court rejects ex-pharma CEO Martin Shkreli’s appeal
12:30 pm Monday, October 07th, 2024
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, equal to the profits he and one of his former companies made by raising the price of the drug Daraprim in 2015, imposed in 2022 by U.S. District Judge Denise Cote in Manhattan.
Shkreli’s appeal did not challenge 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 had asked the Supreme Court to review a January decision by the Manhattan-based 2nd U.S. Circuit Court of Appeals, which upheld the $64.6 million penalty as well as the industry ban.
“Although we were disappointed in the disposition, we also think it is just a matter of time before the Supreme Court overturns the 2nd Circuit’s outlier approach” to the kind of penalty Shkreli was ordered to pay, his lawyer Thomas Huff said in an email.
Shkreli may be able to challenge the penalty again if a future Supreme Court ruling creates a more favorable legal precedent for him, Huff added.
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. Shkreli said it was unfair to give up profits he never personally received or controlled, and that two other federal appeals courts have limited the liability of defendants in personal gains.
The states countered that the appeal to the Supreme Court was a “poor vehicle” to review Shkreli’s disgorged profits because 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 separately been sued by the digital art collective PleasrDAO for having allegedly streamed a one-of-a-kind album by the hip-hop group Wu-Tang Clan. PleasrDAO bought the album after the U.S. government seized it from Shkreli in his criminal case.
(Reporting by Jonathan Stempel in New York; Editing by Will Dunham)
