FTC Asks Federal Court to Hold ‘Pharma Bro’ Martin Shkreli in Contempt

The Federal Trade Commission asked a federal judge to hold “Pharma Bro” Martin Shkreli in contempt for failing to provide the FTC with information needed to determine whether he is violating a previous order by the judge that banned him from working in the pharmaceutical industry for life.

In a motion filed today in the U.S. District Court for the Southern District of New York, the FTC and its state co-plaintiffs said Shkreli has failed to comply with their requests that he turn over documents and sit for an interview as part of their investigation into whether he has violated the pharmaceutical industry ban by forming and operating his new company, “Druglike, Inc.” Druglike purports to revolutionize early-stage drug discovery through a decentralized computing network. Shkreli is required to provide the information under compliance provisions of the February 2022 order.

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

In January 2022, U.S. District Court Judge Denise Cote held that Shkreli orchestrated an illegal anticompetitive scheme to perpetuate a monopoly for the life-saving drug Daraprim, the gold-standard treatment for a rare, potentially fatal parasitic infection known as toxoplasmosis. Finding that Shkreli’s conduct was “egregious, deliberate, repetitive, long-running, and ultimately dangerous,” the Court imposed a lifetime ban against Shkreli participating in the pharmaceutical industry and found Shkreli liable for $64.6 million in disgorgement. The FTC and state enforcers initiated the case in January 2020 against Shkreli, another individual executive, and the companies they founded, Vyera Pharmaceuticals, LLC, and Phoenixus AG. The court found that the defendants’ anticompetitive scheme prevented generic competition and allowed them to protect their Daraprim price increase from $17.50 per tablet to $750 per tablet.

The FTC first invoked the order’s compliance reporting and access-to-information provisions in October 2022, but Shkreli has disregarded the agency’s repeated requests for him to provide a compliance report and access to relevant records, and to sit for an interview. In their filing today, the FTC and state enforcers asked the court for an order to show cause why Shkreli should not be held in civil contempt for violating these provisions and to order Shkreli to comply with these information requests within 21 days of the court’s decision.