The story behind the Martin Shkreli controversy
Martin Shkreli, a symbol of pharmaceutical greed, was arrested at his Murray Hill apartment on Thursday, December 15. He was accused of taking money from investors, lying to them about the money, and paying off debtors with money from his own company. He was, however, later released on a $5 million bond.
This arrest had been a long time coming. It started back in 2003, when he first started gaining public notoriety for predicting that the stocks would fall for a weight-loss drug that would heavily benefit the company he was working for–Cramer. The Securities and Exchange Commission looked into his knowledge of the stocks but found no wrongdoing.
In 2011, Shkreli founded Retrophin, a company focused on biotechnology to create treatments for rare diseases. As CEO, Shkreli had his employees create fake Twitter aliases to make gangster rap jokes and to short sell other biotech stocks in order to sell product. Quickly raising Retrophin’s Board’s attention, they decided to replace Shkreli with Stephen Aselage. Under the fire of critics, Shkreli was described as intelligent but too immature and unfocused for the job of CEO. About a year after this, Shkreli had a $65 million dollar lawsuit filed against him by Retrophin. It was claimed that he had breached a loyalty contract with the company over a dispute about his use of company funds. The lawsuit stated that he had also threatened and harassed a former company member.
Since January 2015, the U.S. Attorney for the Eastern District of New York has been investigating Shkreli and his associates for criminal allegations. Using the Fifth Amendment, the right against self-incrimination, Shkreli was able to avoid testifying during civil depositions.
After a family member suffered from treatment-resistant depression, Shkreli found interest in chemistry, which then led him into pharmaceuticals. Finding a new company known as Turning Pharmaceuticals, he immediately launched three drugs: an intranasal version of oxytocin, an intranasal version of ketamine for depression, and Vecamyl for hypertension. His strategy for his new business was to acquire out-of-patent medicines and to reevaluate the pricing of each drug without having to develop their own drugs to put on the market.
Successfully administering the out-of-patent drugs at the higher selling price, Shkreli and his company came across a drug known as Daraphim. According to webmd.com, Daraphim is an FDA approved drug that is used as an anti-malaria and antiparasitic in order to treat patients with toxoplasmosis, a parasitic disease. The patent for Daraphim expired in 1953, and it is the only drug of its kind, since there is no generic version of it. Turning Pharmaceuticals raised the critical 13.50 dollar drug to 750 dollars per pill, overnight. The 5,556 percent increase sparked criticism in the Infectious Diseases Society of America, the HIV Medicine Association, and the Pharmaceutical Research and Manufacturers of America. Later on, it even became a presidential candidate topic with Hillary Clinton, Donald Trump, and Bernie Sanders. After a few months of the controversy, Turning Pharmaceuticals announced that while they would not be lowering the price of the drug, it would never be denied to a patient who was unable to afford it.
After his December arrest for his “Ponzi-like schemes,” according to cnn.com, Shkreli kept giving himself bad publicity. One of these ways was taking to social media and talking about how he was more than willing to go before Congress to answer questions about the price change for Daraphim. Once he was called before Congress, however, he once again used the Fifth Amendment to his advantage and refused to answer any questions. Later on Twitter, he wrote a public message stating, “Hard to accept that these imbeciles represent the people in our government,” and accused congressmen of being purely motivated by, “self-interest”.
Throughout his career it seems that Shkreli not only enjoys basking in society’s attention, but more so enjoys being in the notorious side of society’s attention. This was especially seen when he took to the trusty Internet once more to say that people should have a vote on what they hate most about him. While this issue is the only major attention that is on Shkreli lately, judging by his past, it shouldn’t be much longer before he once again is in the public eye.