Big Pharma CEO Known for Drug Price Gouging Arrested on Securities Fraud Charges
Federal agents have arrested 32-year old pharmaceutical company CEO, Martin Shkreli, who successfully jacked up the price of a single Big Pharma pill from $13.50 to $750. But it seems this gouging of Turing Pharmaceuticals’ anti-infective drug, Daraprim, by 5000% was not Shkreli’s only crime. He now faces charges on securities fraud linked to a firm he founded.
Shkreli has defiantly defended his greed, saying that he would have raised drug prices even higher “since shareholders expect him to maximize profits,” but the federal case being brought against him now has nothing to do with charging people ridiculous prices for a life-saving pill. He has apparently also been playing another shell game – hiding some money here, taken from over there – that is far from legal.
Prosecutors in Brooklyn have charged him with illegally taking stock from Retrophin Inc., a biotechnology firm he started in 2011, and using it to pay off debts from unrelated business dealings.
According to Bloomberg, his defunct hedge fund, MSMB Capital Management, lost millions, but he played a dirty hand to try to save it. He is alleged to have made secret payoffs and set up sham consulting arrangements. A New York lawyer, Evan Greebel, was also arrested recently. He is accused of conspiring with Shkreli in part of this scheme.
The Big Pharma tycoon is also known for squandering $3 million of investors’ funds at the age of 26, losing almost all of it within a year.
Shkreli later aged to convince another few investors to give him $2.35 million, and lost about half of that in two months, the authorities said. As the hole grew, he covered it up with fraud, telling investors that his returns were as high as 35.8% when he was down 18%. He used client money to pay for his clothing, food, and medical expenses, and lied to the broker handling his fund’s accounts, authorities said.
Shkreli has been the subject of disdain from activists for some time. After he raised the price more than 55-fold for Daraprim, the preferred treatment for a parasitic condition known as toxoplasmosis, which can be deadly for unborn babies and patients with compromised immune systems. His company, Turing Pharmaceuticals AG, bought the drug, moved it to a closed distribution system, and instantly drove the price up sky high.
Even Donald Trump has called Shkreli a “spoiled brat,” and the BBC dubbed him the “most hated man in America.” Bernie Sanders, a Democratic presidential candidate, rejected a $2,700 campaign donation from him, directing it to an HIV clinic.
Let’s hope Shkreli and others like him spend some long hours in a jail cell, contemplating the error of their ways.
Christina Sarich is a humanitarian and freelance writer helping you to Wake up Your Sleepy Little Head, and See the Big Picture. Her blog is Yoga for the New World. Her latest book is Pharma Sutra: Healing the Body And Mind Through the Art of Yoga.