It's good to be back.
It’s been five years, doesn’t look like a lot’s changed.
Just two months after walking out of prison, Martin Shkreli is launching a new business.
His new software platform helps anyone model chemical compounds to design new drugs for free.
Contributors are paid in the official crypto “Martin Shkreli Inu”
which has recently crashed following an alleged hack.
It was his previous involvement with the drug industry that made the “pharma bro” famous.
A few years ago, Shkreli notoriously hiked the price of a life-saving drug by more than 5000%.
In response to all of this attention, and doctors and patient groups saying
they can’t access this drug, are you going to change the price?
No He was called the “most
hated man in America” after raising the price of a tablet of Daraprim from $13.50 to $750.
I probably would have raised the price higher is probably what I would have done.
So how did a guy who started two hedge funds in his twenties
end up founding Turing Pharmaceuticals? He has a BA in business administration from a city
college in New York yet made the switch because “...there wasn’t enough money in hedge funds.
You could say that that is the biggest dickhead answer ever” as he admitted to Vanity Fair.
In 2015, Turing Pharmaceuticals acquired the rights to Daraprim which treats a rare
infection from the parasite toxoplasmosis. Babies born to women infected during pregnancy
can go blind or suffer brain damage. It can be fatal in people with compromised immune systems,
like those living with HIV. There is no excuse
for going $13.50 to $750 for one pill. He looks like a spoiled brat to me. You want
to know the truth? He looks like a spoiled brat “Spoiled brat” is far from the way he grew up.
Shkreli was born in Brooklyn in 1983 to immigrants from Albania.
His father worked as a doorman. Both his parents also held odd jobs as janitors to support him,
his brother, and two sisters. He’s described himself as the
most successful Albanian on earth. Yet many described him differently - targeting
him as the arch-villain of the pharma industry, a symbol of modern-day greed.
What Shkreli did was actually not new.
Drug companies have a history of raising prices.
Yet they didn’t generate the headlines like Shkreli did.
Perhaps because he was so unapologetic about it. No one wants to say it. No one’s proud of it.
But this is a capitalist society, capitalist system, capitalist rules. My investors expect me
to maximize profits, not to minimize them, or go half, or go 70%, but to go to 100% of the profit
curve that we’re all taught in MBA class. It didn’t help that as people complained that
health care in America was becoming unaffordable, he portrayed himself as a wealthy hedge-fund guy.
Dishing out $2 million at an auction to buy the one and only copy of an
unreleased Wu-Tang Clan album. And when Congress grilled him
over the price hike, he trolled them. Do you think you’ve done anything wrong?
On the advice of counsel, I invoke my fifth amendment privilege
against self-incrimination and respectfully decline to answer your question.
Is it pronounced Shkreli? Yes sir
See, you can answer some questions, that one didn’t incriminate you.
I truly believe, I truly believe. Are you listening?
Yes
He didn’t say much during the hearing, but he’s defended his actions as having minimal impact on
the health care system because Daraprim is only used by around 2,000 Americans.
He said for those without insurance, his company would sell Daraprim for just $1 a pill,
noting more than half of patients get it for a buck.
For everyone else, insurance would cover the cost.
There isn’t consequences. They have insurance.
I don’t know if you’re familiar with health care insurance. 90%
of Americans have it. Our president forced us to get it. I think. Do you remember that?
Yet healthcare insurance companies claim they have been forced to raise their rates
due to the rising cost of drugs. When you have, for example, health insurers pay
really high prices, that gets expressed in premiums sooner or later. It doesn’t just go away.
Shkreli’s response: Of course it doesn’t. And as GDPs grow - we’re at the top of the pack - I think
what happens is that we learn in our society is that what we prize in life is our health.
We’re gonna spend more and more on our health than ever before. And that’s a good thing. I
think that’s a mark of a civilized country. Shkreli claims his price hike was for the greater
good - that he’d take some of the profit and put it into research to invent a better drug.
The least you could do, the least you could do, is to take those profits and help those patients
even more by making a better drug. Daraprim is 70 years old. Quite frankly, it’s not a great drug.
Nevertheless, Daraprim remains the gold standard for treating toxoplasmosis.
Medical professionals are satisfied with its effectiveness and any side effects are manageable.
I’ve reached out to Turing Pharmaceuticals – which now goes by the name Vyera Pharmaceuticals - to
find out how far they’ve come in making a new drug but have not yet heard back.
Its website states it “has completed early-stage studies
to investigate the safety of a novel molecule” to treat the parasitic disease.
Just a few months after the price hike, Shkreli resigned as CEO of Turing Pharmaceuticals
after being charged with securities fraud.
This had to do with the two hedge funds he ran before he switched careers.
The Securities and Exchange Commission accused him of lying to investors in his hedge funds
about how much money they had and what they were invested in, and in one instance - lost
$7 million in a disastrous trade. To pay back angry investors,
prosecutors accused him of ripping off another drug company that he founded before Turing,
called Retrophin (Retro-fin), in effect, using Retrophin as a personal piggy bank
to take millions in stock and cash. Although the fraud charges were NOT
related to the Daraprim case, Shkreli believes the timing was no coincidence.
Isn’t it ironic that the day they start to charge is just months after the Daraprim pricing?
In any case, the criminal charges didn’t seem to bother him much.
He made faces in court. He boasted in one of his many live streams
that if he got acquitted, he’d sleep with a female journalist he previously harassed on Twitter which
got him banned from that platform. Reporter Lauren Duca responded:
“I’d rather eat my own organs. So much as touch me, and I’ll gladly chop off one of yours.”
It appears he thought he’d win the case. Spirit of Harambe will guide over this trial.
Justice will be served. We’re gonna win by a landslide.
But that’s not how it played out. On August 4, 2017, a jury found him guilty
on three counts of securities fraud. Before sentencing, Shkreli had tears in
his eyes as he gave a statement, admitting: “I was never motivated by money. I wanted to grow
my stature and my reputation. I am here because of my gross, stupid, and negligent mistakes I made.”
This was a very different Martin Shkreli than the one the world had come to know.
He was free on a five million dollar bond while awaiting sentencing.
But then…the U.S. District Judge revoked his bail and threw him in jail.
Judge Kiyo Matsumoto was not impressed when he encouraged his Facebook followers to grab
strands of Hillary Clinton’s hair during her book tour, offering to pay $5,000 a strand.
He said he wanted to use the hair samples to prove Clinton was a murderer by comparing the
hair strands to the samples he already had. In another post, he had offered a bounty to
find the person responsible for the murder of Democratic National Committee staffer Seth Rich.
Shkreli’s lawyers explained he was joking but the judge didn’t
think it was funny and she revoked his bail. Shkreli ended up with a seven-year sentence.
He also had to forfeit the $7 million he made from the fraud to the federal government, including
giving up his precious Wu-Tang Clan album. The U.S. Department of Justice sold the
album to a group of NFT investors who reportedly paid $4 million for it.
Shkreli was released from prison in May 2022 after serving five years of his sentence.
Prison was weird. It’s not like in the movies. It’s mostly just guys hanging out,
playing cards, not doing anything too exciting. Gonna probably make some babies, repopulate
America. We’re having a fertility crisis in this world so it’s important for me to do my job.
I think I’m just gonna have like ten or twenty kids and just Genghis Kahn the world.
Minus the, y’know, the negative side of that. The consent version.
What else does his future hold, besides spreading his seed?
He’s been giving stock advice on his YouTube channel.
He says he plans to release his debut album: God’s Gift.
And then there’s his drug discovery software platform.
He technically can’t work in the pharmaceutical industry - a federal
judge banned him for life and it’s not clear if his new venture violates the ban.
The Federal Trade Commission and seven U.S. states had sued Shkreli.
They accused him of tightly controlling the distribution of Daraprim,
making it harder for competitors who wanted to make generics to get samples for required testing.
The patent on Daraprim expired years earlier so
other drug companies could have produced a generic version to bring down the cost.
U.S. District Judge Denise Cote found Shkreli “violated federal
and state laws that ban anticompetitive conduct.”
She called the Daraprim scheme “particularly heartless and coercive”
and ordered him to pay nearly $65 million in profits to the states that sued him.
I’m gonna be fighting that ban and winning. So, I’m going to hand them a nice big fat L
and throw a parade when I win. As for his former drug company,
Vyera has agreed to pay $40 million to settle the government lawsuit over the price hike.
It no longer has a monopoly on Daraprim.
Starting in 2020, the FDA approved generic versions of Daraprim.
Instead of $750 a pill, the non-profit “46Brooklyn” that
looks into drug pricing found the generics are around $300. Which is still expensive.
However, Ben Link with 46brooklyn pointed out to me:
“if the price of the brand never skyrocketed as much, the generics would likely be cheaper.”
Shkreli said in a recent Reddit AMA that he still trades,
But he expects this coming year to be brutal for stocks.
And love him or hate him, it seems like he’s right.
Because the stock market is having its worst start in 50 years,
And the U.S. economy is on the brink of a recession, with some saying it’s already here.
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Thanks for watching. For Newsthink, I’m Cindy Pom.