Martin Shkreli is on the fast track to becoming America’s public enemy number one. He’s a former hedge fund manager who made his front page debut in September for acquiring the patent to a drug used by AIDS and cancer patients and then raising its price more than 5,500 percent. Since then, he’s also been outed through published social media exchanges as a creep and a bully, perhaps even criminally so. Most recently he tried to buy his way into a meeting with Democratic presidential candidate Bernie Sanders.
It’s to Sanders’s credit that his campaign gave the money away to a health clinic and called Shkreli the “poster boy for drug company greed.” What makes Shkreli’s donation extra distasteful is his statement on the controversy: “He’ll take my money, but he won’t engage with me for five minutes to understand this issue better.” It’s clear that Shkreli expected to receive an audience with the candidate in exchange for his donation.
Shkreli’s behavior is best characterized as mob-like. His attempt to exchange financial favors for political ones sounds an awful lot like bribery. Add to that his psychotic harassment of a former employee’s family over misappropriated funds – including a vow to see the man’s wife and children homeless on the street – and Shkreli really starts to fit the profile of unfiltered gangster villainy.
Of course, no criminal enterprise is complete without racketeering. Shkreli began his career on Wall Street in the dubious enterprise of hedge funding and was sued for $65 million by his previous company Retrophin over shady dealings. But his biggest claim to fame by far is still the price increase on the prescription drug Daraprim.
Daraprim has been used for decades to treat toxoplasmosis, a common parasitic infection that can be life-threatening in patients with compromised immune systems like AIDS and cancer patients. Shkreli’s company Turing acquired the patent and raised the price per pill of Daraprim from $13.50 to $750 overnight. The company was only recently created by Shkreli and a group of investors, seemingly for the express purpose of gouging Daraprim users.
While many in America were struggling with the simple reality that such evil could even be possible, Shkreli defended himself on social media and gave a fascinating interview to Bloomberg in which he said plainly that he raised the price on Daraprim because Turing needed to turn a profit on it. Shkreli insisted that at the rate the drug sold for before he got his hands on it, companies were “just giving it away.” In his world, medicine being given away to sick people is unthinkable.
Shkreli justified the price increase by promising to research a better alternative, although the necessity of this is suspect as Daraprim has only about 2,000 users a year and has apparently worked fine since the 1950s. He also claims the drug is given away for free to patients who meet certain financial needs criteria. It begs the question of what those financial needs criteria are and who still pays full price. If a patient has anything at all to take, it’s fair to assume Turing will take it.
Knowing exactly how pharmaceutical companies, insurance companies, healthcare providers, and government agencies interact is extremely complicated and varies case-by-case. Like the tax code, there may not be anyone who truly understands it at every level. If Shkreli were living on a modest salary and using all of his Daraprim profit on new research, it might be possible to let him off the hook. But no one should expect to open up Turing’s books and discover that’s the case.
There’s one easy way to prove it’s all about greed: Shkreli and his friends in the industry are fantastically wealthy. The pharmaceutical industry is worth more than $300 billion globally. According to the World Health Organization, the biggest companies, six of which are American, enjoy “sales of more than $10 billion a year and profit margins of about 30 percent.” Shkreli himself is worth an estimated $100 million.
Despite this, Shkreli has tried to represent himself as a victim of media inaccuracy and public misunderstanding. He is desperately trying to extract sympathy on social media and has defended himself against accusations of price gouging by declaring himself a champion of toxoplasmosis sufferers. Former mafia boss Joe Colombo maintained a high public profile, too, alleging racism when the FBI began looking into his criminal activities and becoming a leader in the Italian-American civil rights movement.
Colombo ended up being assassinated by fellow mobsters for bringing unwanted attention to their activities. Similarly, Shkreli has been disowned by much of the rest of the pharmaceutical industry, with the trade group Pharmaceutical Research and Manufacturers of America tweeting, “@TuringPharma does not represent the values of @PhRMA member companies.” But make no mistake – the rest of big pharma is no better. They just don’t like Shkreli bringing heat on them.
Prescription drugs cost more in the US than in any other country in the world and companies are always looking for ways to make more. It’s time we as a nation start treating drug companies like the price-fixing, bribing, competition-squashing gangsters they are. It’s time we drag Shkreli and his industry cohorts before federal investigations and RICO hearings.