The Federal Trade Commission and seven state attorneys general asked a federal judge on Tuesday to hold Martin Shkreli in contempt, alleging the former pharmaceutical executive violated a lifetime ban from the drug industry by livestreaming himself running a new pricing operation.
The motion, filed in federal court, accuses Shkreli of "flagrantly and repeatedly" breaching the terms of a 2022 settlement that barred him for life from participating in the pharmaceutical business and required him to pay $64.6 million. The states joining the FTC include New York, California, Illinois, North Carolina, Ohio, Pennsylvania, and Virginia.
The alleged violations center on a company called Daraprim Direct, which Shkreli promoted in livestreamed videos on X, according to the FTC. Through that venture, Shkreli appeared to orchestrate an "elaborate anticompetitive scheme" to control access to Daraprim, the anti-parasitic drug he made infamous in 2015 by raising its price from $13.50 to $750 per pill overnight.
The original price hike drew bipartisan condemnation and became a defining symbol of pharmaceutical price gouging. Shkreli was later convicted on federal securities fraud charges unrelated to the Daraprim pricing, and he served about six years in prison before his release in 2022.
The 2022 settlement resolved antitrust claims brought by the FTC and states over the same drug. As part of that agreement, Shkreli was permanently prohibited from owning or controlling any pharmaceutical company and from advising others in the industry.
In their contempt motion, the regulators argue that Shkreli's livestreams show him openly flouting those restrictions. The FTC's filing states that "Shkreli's egregious, deliberate, repetitive, long-running, and ultimately dangerous illegal conduct warrants imposition" of civil penalties and other sanctions.
Contempt of court in a civil case can result in fines, imprisonment, or both, depending on what the presiding judge determines. The FTC is asking the court to enforce the original settlement terms, which remain binding.
Daraprim is listed by the World Health Organization as an essential medicine, used primarily to treat toxoplasmosis in patients with weakened immune systems, including those with HIV/AIDS. The drug has no direct generic equivalent on the U.S. market for some indications.
Shkreli has not publicly responded to the contempt filing. His attorney did not immediately return requests for comment.
The case is before the U.S. District Court for the Southern District of New York, the same court that oversaw both his criminal fraud trial and the FTC's original antitrust action.
