Martin Shkreli: Meet the Infamous, Reportedly Wu-Tang Clan-Loving Former …

23 Dec 2015 | Author: | No comments yet »

Martin Shkreli, the infamous “Pharma bro” who was arrested Thursday and charged with securities fraud, has resigned as CEO of Turing Pharmaceuticals,.

The pharmaceutical executive reviled for price-gouging resigned Friday as head of the drugmaker Turing Pharmaceuticals, a day after being arrested on charges of securities fraud related to a company he previously ran.

“We wish to thank Martin for helping us build Turing Pharmaceuticals into the dynamic research focused company it is today, and wish him the best in his future endeavors,” Tiles said in the statement. But his strategy of finding an old drug, raising its price, and taking the profit is one that’s increasingly common among a new breed of drugmakers. Martin Shkreli, whose arrest delighted countless people appalled by his unapologetic stance after hiking the price of a life-saving drug by 5,000 percent, is being replaced on an interim basis by Ron Tilles, according to a statement issued Friday by Turing, which is privately held.

Disdaining a business model dependent on expensive research and development, companies like Shkreli’s Turing Pharmaceuticals AG, Valeant Pharmaceuticals International Inc., Rodelis Therapeutics and others have taken advantage of inefficiencies in the U.S. health-care system. The charges against Shkreli are unrelated to his work at Turing, but it’s his actions at the company that brought him into the public consciousness in September. Turing bought the drug Daraprim, which is used to treat people with weakened immune systems, as in AIDS and during chemotherapy, and raised its price by 5,000 percent—from $13.50 to $750.

In the backlash that followed, Shkreli was called “a spoiled brat,” and “the most hated man in America.” In the Turing statement, Tiles said the company was “committed to ensuring that all patients have ready and affordable access” to Daraprim and other drugs. Shkreli has resigned as the head of one of the companies he now runs, Turing Pharmaceuticals, on Friday, Dec. 18, 2015.(AP Photo/Craig Ruttle) Turing also issued a statement that business would continue as usual and that no patient would be denied access to Daraprim, the drug whose price hike made Shkreli a pariah to both patients and other pharmaceutical companies. Turing also said it was sending a similarly worded letter to doctors stressing that it will continue to offer financial assistance to eligible patients needing Daraprim who are either uninsured or have commercial insurance. And while Shkreli may be reviled, said Caplan, “he’s not doing anything in terms of prices that other companies haven’t done.” Like Shkreli, Valeant Chief Executive Officer Mike Pearson has excelled at finding cheap drugs, boosting their cost and reaping the rewards.

Amid a deluge of criticism from patients 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. Rodelis was working to ensure “long-term availability” of the tuberculosis drug, and planned to maintain patients’ access, the company said on its website. The drug’s rights were returned to the nonprofit Purdue Research Foundation, who sold it to Rodelis earlier this year, in September after an outcry over the price increase. On Thursday, federal prosecutors said that between 2009 and 2014, Shkreli 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. Photos of him, wearing a gray hoodie as he was escorted by authorities, spread on the Internet like wildfire, generating social media posts celebrating his apparent fall.

Questcor raised the price in 2007 because Acthar was no longer profitable, according to Mallinckrodt, and since it was acquired Mallinckrodt says its price increases have been in line with or below inflation. Big price increases are just business, Shkreli has said. “I think health-care prices are inelastic,” he said at an event in New York this month. “I could have raised it higher and made more profits for our shareholders.” Shkreli has previously said that his goal is to use his financial gains to develop new drugs and that he gives much of his company’s medicine away for pennies. And he’s taken pains to distance himself from Turing and Shkreli. “To compare us to Turing is ridiculous,” Pearson said during a Dec. 15 interview with CNBC. “That is a single-product company.” Valeant declined to comment for this story. Yet Pearson has criticized Big Pharma companies for overspending on research, and the company has said that it looks for products that can be sold better and more profitably by Valeant. The drug industry’s lobby group, Pharmaceutical Research and Manufacturers of America, has gone after both Valeant and Turing, saying in September that Turing doesn’t represent its values, and in October that Valeant’s strategy “is more reflective of a hedge fund than an innovative biopharmaceutical company.” Turing fired back that other drugmakers raise prices frequently.

KaloBios had announced plans to stop research programs on two drugs and shut down the company shortly before Shkreli and an invested group swooped in on Nov. 19, bought 70 percent of its shares and promised a $3 million stock investment and $10 million in financing. Companies like Turing and Valeant that acquire drugs instead of developing them are the “exceptions and not the rule,” said Robert Langer, a professor at MIT and co-founder of more than 25 biotechnology companies.

Miller has been a frequent critic of drugmakers, and he sits at the other side of the negotiating table, managing pharmaceutical costs for health insurers. “We have a new class of leadership at these organizations that no longer feels encumbered by the social contract that had previously existed,” Miller said. Last month, he acquired a majority stake in a floundering drugmaker, KaloBios Pharmaceuticals Inc., sending its shares soaring, and named himself CEO.

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