AAI Tells Second Circuit that Pharma Bro’s Lifetime Ban from the Pharmaceutical Industry is Appropriate and Necessary to Ensure Effective Relief

On March 30, 2023, AAI filed an amicus brief in support of the Federal Trade Commission at the Second Circuit in Martin Shkreli’s appeal of the district court’s injunction in FTC v. Shkreli. At trial in the district court, the FTC and several states succeeded in proving that Martin Shkreli, aka “the Pharma Bro,” violated Sections 1 and 2 of the Sherman Act by a series of exclusionary acts that prevented generic competition to an important life saving drug. Mr. Shkreli’s acts allowed his company to increase and maintain a price increase of more than 5000% per tablet. Mr. Shkreli appealed only the relief granted by the district court, not the underlying finding of liability.

AAI describes why, based on its extensive work on antitrust remedies, it believes the Second Circuit should reject Mr. Shkreli’s request to drastically narrow the scope of his lifetime ban from the pharmaceutical industry and uphold the district court’s injunction in full. The AAI brief identifies a set of factors that caselaw and agency experience have shown to be necessary to an effective antitrust remedy and explains why each of these factors support upholding the injunction as issued, including the lifetime ban. Any effective antitrust relief, the AAI brief explains, must: (1) be broad enough to address future ways in which the defendant might achieve the same anticompetitive goals, (2) make it easy to detect and enforce against violations, and (3) address the incentives that led to the anticompetitive conduct. Any weaker relief than the district court’s issued injunction, the AAI brief concludes, would risk failing on one or more of these points. Further, the AAI brief notes that the district court’s injunctive relief is appropriate and consistent with accepted limiting principles of antitrust relief including ensuring relief flows from the proven harms, keeping relief proportionate with harm, and considering the effect on procompetitive conduct.

The AAI brief also discusses the effect weakening the injunctive relief in this case could have on antitrust enforcement at the FTC, especially in the pharmaceutical industry. The brief describes the FTC’s frontline role in pursuing anticompetitive conduct in the pharmaceutical space and why limiting relief in this case threatens the FTC’s ability to pursue effective remedies against antitrust violations across the pharmaceutical space.

The brief was written by AAI Vice President of Legal Advocacy Kathleen Bradish, with invaluable assistance from AAI Research Fellow Mathew Simkovits.

Read the full brief here: AAI Amicus Brief to Shkreli Motion