Former Turing CEO Martin Shkreli could face new federal charges
- Martin Shkreli could face new federal charges for securities fraud, an Assistant U.S. Attorney said at a hearing Tuesday, Reuters reports.
- After gaining notoriety for increasing the price of the drug Daraprim by 5,000% while CEO of Turing Pharma, Shkreli was arrested in December 2015 on unrelated securities fraud charges. He was subsequently ousted as head of both Turing and KaloBios, another pharma company he ran.
- Meanwhile, Turing Pharma faces new legal troubles of its own. Impax Pharmaceuticals is suing Turing for breach of contract over $20 million in Medicaid rebates which Impax says Turing failed to reimburse.
Shkreli’s original arrest stemmed from allegations he illegally mismanaged funds at his former company Retrophin, essentially using company funds to settle other debts.
He has pleaded not guilty to the charges and maintains his innocence on Twitter.
Given that I didn't commit a crime, I agree. https://t.co/20j9eEnU73— Martin Shkreli (@MartinShkreli) May 3, 2016
The new possible charges are also tied to Shkreli’s time at Retrophin, and The Wall Street Journal reports they could be filed within the month. Shkreli’s lawyers have asked the district judge to delay the trial so they could analyze any forthcoming charges.
Even without Shkreli, Turing continues to deal with the effects of his decisions, now facing a lawsuit from Impax Pharmaceuticals. Impax is in a challenging position, because the company still holds the national drug code on Daraprim and is therefore responsible for submitting and verifying pricing data to Medicaid, in addition to paying any rebates owed, according to Stat. Failure to comply with these regulations can result in serious consequences.
Federal regulations stipulate that drugmakers must rebate Medicaid any difference between the price paid by the program and the cheapest price paid by any customer. Failure to adhere to these guidelines opens up drugmakers to potential fraud prosecution.
Impax is therefore suing Turing for hindering its ability to comply with federal regulations. The company claims it is burdened with the liabilities associated with Daraprim’s drastic price hike, as well as the reputational harm from Turing’s actions.