Martin Shkreli: the new face of greed

Let’s look at Martin Shkreli:

The drug, called Daraprim, was acquired in August by Turing Pharmaceuticals, a start-up run by a former hedge fund manager. Turing immediately raised the price to $750 a tablet from $13.50, bringing the annual cost of treatment for some patients to hundreds of thousands of dollars.

Martin Shkreli, the founder and chief executive of Turing, said that the drug is so rarely used that the impact on the health system would be minuscule and that Turing would use the money it earns to develop better treatments for toxoplasmosis, with fewer side effects.

“This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” Mr. Shkreli said. He said that many patients use the drug for far less than a year and that the price was now more in line with those of other rare disease drugs.

“This is still one of the smallest pharmaceutical products in the world,” he said. “It really doesn’t make sense to get any criticism for this.”

Thanks Martin, I’m sure you’ll make no money out of this. Of course this is far from the only example of drug prices skyrocketing for no reason:

Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis, was just increased in price to $10,800 for 30 pills from $500 after its acquisition by Rodelis Therapeutics. Scott Spencer, general manager of Rodelis, said the company needed to invest to make sure the supply of the drug remained reliable. He said the company provided the drug free to certain needy patients.

In August, two members of Congress investigating generic drug price increases wrote to Valeant Pharmaceuticals after that company acquired two heart drugs, Isuprel and Nitropress, from Marathon Pharmaceuticals and promptly raised their prices by 525 percent and 212 percent respectively. Marathon itself had acquired the drugs from another company in 2013 and had quintupled their prices

In fact:

Daraprim cost only about $1 per tablet several years ago, but went up sharply after CorePharma acquired it.

But Shkreli is a good place to start:

Turing isn’t focused on any particular therapeutic area, but rather on picking up bargain-priced assets that other pharma companies have shelved, Shkreli explains. “We look to buy dollar bills for 50 cents,” he says. “Our focus is to be opportunistic. Our favorite thing to do is to buy forgotten and orphaned assets from Big Pharma—any drug that’s had weak supply or weak support. Typically pharma is interested in divesting those, and often at a very low price.”

really:

In the weeks before his ouster as the CEO of Retrophin(RTRXGet Report) , Martin Shkreli was buying relatively small amounts of the company’s shares on the open market and using his personal Twitter account to convince investors to do the same.

“Not selling $RTRX. The stock is very very cheap. The revenue generating assets alone are worth [greater than] $25/share,” Shkreli tweeted on Sept. 30, the day his departure from the embattled drug maker was announced.

But while talking up Retrophin’s prospects publicly and buying some of the stock, Shrekli was selling privately a much larger portion of his drug company holdings. Without public disclosure, Shkreli received almost $3 million in gross proceeds by selling “forward contracts” on his Retrophin stock in early September, according to a filing with the Securities & Exchange Commission made public Monday night.

he is:

If Shkreli acquires Biltricide from Bayer, he plans to raise the price of the drug to $100,000 for a single-day course of treatment, according to people briefed on Turing’s business plans. No other changes or improvements to the drug will be made by Turing. The extra revenue generated by Biltricide is expected to earn Turing a fast profit for its investors and help defray the cost of developing other, experimental drugs, sources said.

really:

Back when Martin Shkreli was CEO of Retrophin, he managed to grab a few headlines by buying an old rare disease drug, Thiola, and raising the price 2000%

Republicans are partly responsible:

A pillar of the Democratic political program tumbled today when Republicans in the Senate blocked a proposal to allow Medicare to negotiate lower drug prices for millions of older Americans, a practice now forbidden by law.

Democrats could not muster the 60 votes needed to take up the legislation in the face of staunch opposition from Republicans, who said that private insurers and their agents, known as pharmacy benefit managers, were already negotiating large discounts for Medicare beneficiaries.

“Private competition works,” said Mr. Grassley, a principal author of the 2003 Medicare law. “The government has very little experience and a dismal track record figuring out what to pay for drugs.”

Mr. Shkreli thanks you Mr. Grassley. The citizens of the US, not so much:

The poll conducted by the Kaiser Family Foundation found that 87 percent of people surveyed want Medicare to have the authority to press drugmakers for greater discounts.

Here’s the argument against it:

Efforts to allow Medicare to negotiate drug prices have not been successful, due to opposition over government interference in the marketplace. Drug manufacturers say their prices reflect the billions of dollars they spend in research and development, both for treatments that are approved and the many more that fail.

Now that’s funny.

2 Comments (+add yours?)

  1. Trackback: Thinking About Human Suffering | Meadow of Atē
  2. Trackback: Not a good week for Libertarians | Petunias

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