In Shkreli Case, a Company Lawyer May Have Crossed the Line

20 Jan 2016 | Author: | No comments yet »

Analysis: Shkreli Isn’t to Blame For High Drug Prices in U.S..

Should we care about Martin Shkreli, the man I call the “Wolf of Pharma Street”? Reviled pharmaceuticals bigwig Martin Shkreli has been fired from a company he ran for just one month, days after he resigned from another one of his companies after his arrest for alleged securities fraud.TRENTON, N.J. (AP) — In barely 24 hours, Martin Shkreli went from an egotistical pharmaceutical boy wonder running two small drug developers and live-streaming his daily activities to unemployed and facing securities fraud charges that could land him in prison for years.

His hoodie-wearing perp walk sparks outrage, but he is diverting attention from far bigger and more important systemic problems regarding the cost of drugs for all Americans. The California-based KaloBios Pharmaceuticals announced Monday that Shkreli was “terminated” as CEO and resigned from the board, offering no further comment. Shkreli, the former Turing Pharmaceuticals CEO, has been indicted by the feds for allegedly running a Ponzi scheme to keep his various drug company investments afloat. Before the feds came calling to charge him with securities fraud, Shkreli had secured the manufacturing license for Daraprim which is used to treat nasty, often fatal protozoal infections in, among others, those with AIDS.

Kalobios shares rose from less than a $1 to a high of nearly $40 under his brief leadership, but its stocks have stopped trading in the wake of Shkreli’s legal drama. Shkreli, grinned, flipped the rest of humanity the bird, and raised the 62 year-old drug’s price by 5,500 percent; from $13.50 to $750 per tablet overnight — thus retiring the “Biggest Jerk in Health Care Award” forever.

We pay prices that are three times higher than they are in the U.K., six times more than they cost in Brazil and 16 times more than they cost in India. Amid mounting criticism from patients, doctors and politicians, Shkreli pledged to lower Daraprim’s price, but later reneged and instead offered hospitals a 50 percent discount — still amounting to a 2,500 percent increase.

Patients normally take most of the weekslong treatment at home, so they still face the 5,000 percent price increase, though Turing is offering financial aid to those who can’t afford the drug. U.S. prices for top brand-name drugs jumped 127 percent between 2008 and 2014, while staying the same in many European countries, according to a Reuters report on research from Britain’s University of Liverpool.

KaloBios Pharmaceuticals Inc. is a faltering drug company whose shares skyrocketed after Nov. 19, when Martin Shkreli disclosed a huge stake and became its CEO and board chairman. After several of social media accounts were apparently hacked Sunday and filled with crude messages, Shkreli tweeted: “I was hacked–I now have control of this account.” Its shares tumbled 70 percent in January after its drug for lung infections failed in testing, and the company announced it would shut down right before Shkreli and a group of investors swooped in with cash and pledges of financing to keep it going.

And, mainstream pharmaceutical and biotech companies are setting prices so high that many patients and families cannot afford them or the co-pays they carry and fall into debt. Federal prosecutors allege that from 2009 to 2014, Shkreli made bad trades that lost money of some investors in his hedge fund, MSMB Capital Management, then looted a pharmaceutical company called Retrophin, where he was then CEO, for $11 million to pay back his disgruntled clients. He has screwed a small number of people with his devious behavior and should not be allowed to screw all Americans by making us think that his downfall fixes anything needing fixing in American health care.

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