Wednesday, December 23, 2015 by Norman Smith
As the New York Times puts it, Big Pharma executive Martin Shkreli “has emerged as a symbol of pharmaceutical greed for acquiring a decades-old drug used to treat an infection that can be devastating for babies and people with AIDS and, overnight, raising the price to $750 a pill from $13.50. His only mistake, he later conceded, was not raising the price more.”
Although his price-gouging has turned him into an international douchebag, that’s not what led to his recent arrest. Instead, he has been arraigned in federal court on securities fraud and wire fraud charges that were allegedly committed during his time as a hedge fund manager and when he ran his first biopharmaceutical company, Retrophin. “Federal officials described his crimes as a quasi-Ponzi scheme in which he used money from his company to pay off money-losing investors in his hedge funds.”
Shkreli’s life in corporate crime started with his own hedge fund, Elea Capital, which quickly collapsed after he made bad investments. Then, he started another hedge fund called MSMB Capital, which also lost millions (which he hid from investors), according to the accusations contained in the indictment.
After ripping off people in the financial industry, Shkreli started a drug company called Retrophin, based on a marketing strategy of acquiring old drugs, raising their prices, and using the profits to pay off the people he had ripped off in the hedge fund business.
He was soon ousted as the CEO of Retrophin, after which he started his current company, Turing, where he gained infamy by buying the marketing rights to a 62-year-old drug and immediately increasing the price by 5,000 percent, costing patients hundreds of thousands of dollars.
Although it’s a good thing that law enforcement is going after Shkreli, if he is merely treated as a bad apple, it ultimately won’t change anything.
As consumer health advocate Mike Adams has summarized: “The NIH funds most drug company research using taxpayer dollars, and the vast majority of Big Pharma expenditures are spent on marketing, not research. Big Pharma is simply running a profiteering racket while making sure nobody is ever really cured of anything. It’s better for repeat business that way. Anyone who thinks the drug companies or vaccine manufacturers actually give a crap about humanity is a fool. Shkreli just demonstrated it for the whole world to see.”