Big US pharmacies square off on Daraprim supplies | Business News

Big US pharmacies square off on Daraprim supplies

23 Dec 2015 | Author: | No comments yet »

Boy genius couldn’t help himself.

NEW YORK (AP) – He’s the enfant terrible of pharmaceuticals, a 32-year-old CEO who unapologetically raised the price of the only approved drug for a rare disease from $13.50 to $750 per pill.

YOU might think being anointed “America’s most hated man” might be cause to step back from the spotlight and avoid any further controversy, but not Martin Shkreli. Martin Shkreli, a 32-year-old former hedge fund manager and relentless self-promoter who has called himself “the world’s most eligible bachelor” on Twitter, was arrested in a gray hoodie and taken into federal court in Brooklyn, where he pleaded not guilty. When news spread that the 32-year-old pharmaceuticals CEO had been caught hiking up the cost of a lifesaving HIV drug by an inexplicable 5000 per cent back in September, Shkreli didn’t panic. Instead, he went on the offensive, taunting his critics, putting in smug TV appearances, live-streaming his work day and even buying a $US2 million, one-of-a-kind rap album. Online, many people took delight in his arrest, calling him a greedy, arrogant “punk” who gave capitalism a bad name and got what was coming to him.

But Shkreli’s familiar grin was nowhere to be seen this morning, as he was marched across a New York footpath and into a waiting police car, handcuffed and hooded and accused of a “securities fraud trifecta of lies, deceit and greed”. Shkreli denies allegations he cheated investors out of $US11 million and used assets from a biotechnology firm he started in 2011 to pay debts from unrelated business dealings. Prosecutors said that between 2009 and 2014, he lost some of his hedge fund investors’ money through bad trades, then looted Retrophin, a pharmaceutical company where he was CEO, for $11 million to pay back his disgruntled clients. He was freed on a $US5 million bond overnight, pocket change, you might think, for a man who says he made $100 million in a single stockmarket trade and as recently as this month was boasting about his wealth in a magazine interview. “Our first and primary stakeholder is patients,” he told NBC News in the wake of the Daraprim drug hike scandal, insisting the higher price would be used to fund medical research into other medicines. It treats a rare parasitic disease that strikes pregnant women, cancer patients and AIDS patients. (The criminal case doesn’t involve Turing or Daraprim.) But it sparked outrage that resounded from medical centers to the presidential campaign: Hillary Clinton termed it price-gouging, while Donald Trump called Shkreli “a spoiled brat.” Shkreli grew up in Brooklyn, the son of immigrant parents who worked at janitorial jobs.

Others say that’s rubbish, arguing Shkreli made a mistake in buying the Daraprim patent and has simply tried to recover his costs by squeezing patients through higher prices. A month after the Daraprim scandal broke, he agreed to lower the drug’s cost, then backflipped with a crafty move that would simply pass the cost on to hospitals and health insurers. “Martin is the smartest guy in the room at all times,” an unnamed former associate from Shkreli’s days on Wall Street told The New York Times two weeks before his arrest. He has said he stopped going to class and didn’t graduate, though he evidently bears no ill will: His foundation recently gave the school $1 million. He graduated with a business degree from Baruch College in New York in 2004 and within two years was the head of his own hedge fund, Elea Capital Management, aged in his 20s. “I learned a lot about using leverage, the perils of leverage,” Shkreli told the newspaper of a $2.6 million gamble-gone-bad. “Back then, this was almost 10 years ago, I was rushing to succeed.

I made a monster bet that the market would crash, and I was wrong.” In 2011, Shkreli acquired pharmaceutical company Retrophin along with the rights to sell Thiola, a drug used by 20,000 patients in the US to treat rare and incurable kidney diseases, including a chronic lifelong illness called cystinuria, developed in childhood. Undeterred, Shkreli launched a new fund – it also collapsed, prosecutors say – and launched himself in 2011 into the pharmaceuticals business as CEO of Retrophin, which also has drawn scrutiny over sharp drug price hikes. Shkreli, against popular wisdom, is known to give as good as he gets. “Haters, please tell me about the latest in apicomplexa genetic drift,” Shkreli taunted critics on Twitter. “You are all Protozoa experts equipped to judge and advise me, right?” So is Shkreli just in over his head? A music fan since his days in a high school rock band, Shkreli recently emerged as the $2 million buyer of the sole copy of what’s been called the world’s rarest album: the Wu-Tang Clan’s “Once Upon a Time in Shaolin,” which the group auctioned to only one person on the condition that it not be put to commercial use. “I’m staring at a Picasso in my living room right now that’s no different from the Wu-Tang box, except it’s about 20 times more expensive,” he told HipHopDX. Some rap aficionados lamented that the album was in his hands, and the group noted the sale agreement was made before the furor over Daraprim this fall.

While most patients’ co-payments will be $10 or less a month, insurance companies will be stuck with the bulk of the tab, potentially driving up future treatment and insurance costs. “Al Capone was brought down for tax evasion, but he committed many worse crimes,” Mr. Said Capers, the chief federal prosecutor- “We’re not aware of how he raised the funds to buy the Wu-Tang album.” Last month, Shkreli was named chairman and CEO of KaloBios Pharmaceuticals after buying a majority stake in the struggling cancer drug developer.

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