'Pharma bro' was scheming against generic Daraprim from jail

Aug. 14, 2020

'Pharma Bro' Martin Shkreli, currently serving a 7-year sentence for securities fraud, managed to carry out an anticompetitive scheme to block generic rivals of Daraprim — from jail — and now the Federal Trade Commission wants his prison phone conversations made available to attorneys prosecuting an antitrust case against him.

Shkreli became pharma’s most-loathed CEO in 2015 after Turing raised the price of Daraprim, which is used to prevent infections in HIV or transplant patients and treat toxoplasmosis, by 5,000 percent overnight. In the midst of the backlash, Shkreli was convicted of securities fraud and sentenced to seven years in a prison near Philadelphia.

Last year, it was reported that Shkreli was running his former drug company, Phoenixus AG, from his prison cell via a contraband smartphone. 

This time, Shkreli communicated using the phone and email systems that the Federal Bureau of Prisons manages and monitors: TRUFONE and TRULINCS. Shkreli's attorneys say these conversations are protected by attorney-client privilege.

According to a letter written to Judge Denise Cote, FTC obtained certain emails and recordings of Shkreli's phone calls that occurred over these monitored and non-confidential systems. These materials included communications with executives at Vyera Pharma (formerly Turing Pharma, now Phoenixus) and with members of Phoenixus’ board of directors.

From these communications, the FTC secured information relevant to its case, including Shkreli’s efforts from prison to support Vyera’s scheme to prevent generic competition to Daraprim.

The FTC wants the court to rule that the communications it obtained from the Federal Bureau of Prisons are not privileged.