Martin Shkreli in 2017. (Credit: Barry Williams/for New York Daily News)
Logan Wilke, CLS ’23
Martin Shkreli, aka the “Pharma Bro,” gained notoriety in 2015 for purchasing a drug that treats toxoplasmosis, a parasitic infection primarily affecting those with HIV/AIDS, and raising its price by 5,000%. Although Shkreli had originally defended this price increase as “not excessive at all,” the Federal Trade Commission and a group of seven States Attorneys’ offices pursued a lawsuit against him and his company, Vyera Pharmaceuticals, alleging that the hike was only possible due to “an elaborate, multi-part scheme to block generic entry” in violation of both federal and state antitrust laws.
Although Vyera settled ahead of trial,  a federal court recently found Shkreli individually liable under federal and state law for monopolizing the market for the drug and blocking generic entry. Following a bench trial in federal court in December 2021, the court ordered Shkreli barred for life from participating in the pharmaceutical industry and to disgorge $64.6 million in net profits.
While this result certainly offers some comfort in knowing that Shkreli’s notoriously brazen scheme did not go unpunished, an earlier ruling against Vyera has implications for antitrust enforcement beyond the case at hand. Earlier last year, the Supreme Court held that the FTC does not have the authority to obtain equitable monetary relief as a remedy in federal court. As a result, the FTC could no longer seek disgorgement, a form of such relief, of Vyera’s allegedly ill-gotten profits in the case at hand. Still, State plaintiffs maintained their claims for disgorgement under the Sherman Act, Clayton Act, and their respective state laws. While the court did not rule on every state’s authority to seek disgorgement, the court did hold that in New York, where Vyera conducted its scheme, state law grants such authority to the New York Attorney General, one of the plaintiffs.
An open question remained, however, as to the scope of such relief. Vyera moved for partial summary judgment on the issue, arguing that State plaintiffs may only pursue disgorgement where the defendants’ net profits are tied to sales that have victimized citizens of their States. The court denied the motion, finding that New York Executive Law § 63(12) permits the Attorney General to seek relief on behalf of out-of-state residents injured by the wrongdoing stemming from a company’s New York-based operations. As the Attorney General can use this authority to enforce its state antitrust law, the finding allowed the court to hold Shkreli personally liable to disgorge the $64.6 million of excess profits gained from the scheme.
As the FTC remains unable to seek disgorgement in the courts, this ruling paves the way for the New York Attorney General and other State enforcers with similar state-law statutory authority to fill the void and pursue nationwide disgorgement as New York did here. Although disgorgement had not been used widely until the past decade, it has become an increasingly important tool for antitrust enforcers to deter future violations where injunctive relief alone would not suffice.
 Cecilia Kang, Martin Shkreli Faces New Accusations Over High-Priced Drug, New York Times (Dec. 21, 2020), https://www.nytimes.com/2020/01/27/business/martin-shkreli-ftc-lawsuit.html.
 CBS News, CEO: 5,000-percent Drug Price Hike “Not Excessive at All,” CBS News (Sep. 22, 2015), https://www.cbsnews.com/news/turing-pharmaceuticals-ceo-martin-shkreli-defends-5000-percent-price-hike-on-daraprim-drug/.
 See Complaint, Fed. Trade Comm’n v. Vyera Pharms., LLC, No. 20CV00706, 2021 WL 4392481 at 2 (S.D.N.Y. Jan. 27, 2020) (ECF 1).
 See Luc Cohen and Brenan Pierson, U.S. FTC Focuses on Deal with Japanese Company in Shkreli Trial, Reuters (Dec. 14, 2021), https://www.reuters.com/world/us/us-ftc-states-take-shkreli-trial-over-price-hike-2021-12-14/.
 See Opinion and Order, Fed. Trade Comm’n v. Vyera Pharms., LLC, No. 20CV00706 at 6 (S.D.N.Y. Jan. 14, 2022).
 Id. at 6-7.
 See AMG Cap. Mgmt., LLC v. Fed. Trade Comm’n, 141 S. Ct. 1341 (2021). The Court interpretated Section 13(b) of the FTC Act to authorize the Commission to seek equitable monetary relief through administrative proceedings but not in federal court.
 See Opinion and Order Denying 459 Motion for Partial Summary Judgment at 9, Fed. Trade Comm’n v. Vyera Pharms., LLC, No. 20CV00706, 2021 WL 4392481 (S.D.N.Y. Sept. 24, 2020) (ECF 482).
 See id. at 10.
 See id. at 11.
 See id. at 4.
 See id. at 11.
 See Opinion and Order, supra note 5 at 129 (New York Executive Law § 63(12) authorizes the Attorney General to seek actions in equity, including for monetary relief, “to disgorge unlawfully gained profits wherever they were derived.” The Attorney General can use this authority to enforce the Donnelly Act, the State’s antitrust statute.).
 See Consumer Protection and Recovery Act, H.R. 2668, 117th Cong. (2021); Although the House passed stand-alone legislation in July to amend the FTC Act to expressly authorize the Commission to seek equitable monetary relief, the bill passed largely along party lines and has not moved in the Senate.
 See Fed. Trade Comm’n, Withdrawal of the Commission’s Policy Statement on Monetary Equitable Remedies in Competition Cases, at 2 (July 31, 2012), https://www.ftc.gov/publicstatements/2012/07/statement-commission-regarding-withdrawal-commissions-policy-statement.