Martin Shkreli, the head of Turing Pharamaceutical who rose to fame by jacking up a 60-year-old generic drug's price by 5500%, has been reported to be arrested by the FBI for securities fraud.
At Bloomberg and a shorter version from NPR.
In the case that closely tracks that suit, federal prosecutors accused Shkreli of engaging in a complicated shell game after his defunct hedge fund, MSMB Capital Management, lost millions. He is alleged to have made secret payoffs and set up sham consulting arrangements. A New York lawyer, Evan Greebel, was also arrested early Thursday. He's accused of conspiring with Shkreli in part of the scheme.
Goes to show you, if you are gonna be evil, try to stay below the radar.
Previously: Cost of Daraprim Medication Raised by Over 50 Times
Drug Firm Offers $1 Version of $750 Turing Pharmaceuticals Pill
Related Stories
Medicine that costs $1 to make raised in price from $13.50 to $750.00
The head of a US pharmaceutical company has defended his company's decision to raise the price of a 62-year-old medication used by Aids patients by over 5,000%. Turing Pharmaceuticals acquired the rights to Daraprim in August.
CEO Martin Shkreli has said that the company will use the money it makes from sales to research new treatments. The drug is used treat toxoplasmosis, a parasitic affliction that affects people with compromised immune systems.
After Turning's acquisition, a dose of Daraprim in the US increased from $13.50 (£8.70) to $750. The pill costs about $1 to produce, but Mr Shkreli, a former hedge fund manager, said that does not include other costs like marketing and distribution.
Cost of Daraprim Medication Raised By Over 50 Times
BBC is reporting on a massive price hike of an essential drug used by AIDS patients:
The head of a US pharmaceutical company has defended his company's decision to raise the price of a 62-year-old medication used by Aids patients by over 5,000%. Turing Pharmaceuticals acquired the rights to Daraprim in August. CEO Martin Shkreli has said that the company will use the money it makes from sales to research new treatments.
The drug is used treat toxoplasmosis, a parasitic affliction that affects people with compromised immune systems. After Turning's acquisition, a dose of Daraprim in the US increased from $13.50 (£8.70) to $750. The pill costs about $1 to produce, but Mr Shkreli, a former hedge fund manager, said that does not include other costs like marketing and distribution. "We needed to turn a profit on this drug," Mr Shkreli told Bloomberg TV. "The companies before us were just giving it away almost." On Twitter, Mr Shkreli mocked several users who questioned the company's decision, calling one reporter "a moron".
Why not switch to a generic pyrimethamine tablet? They don't exist right now, according to the New York Times (story includes examples of other recent price hikes):
With the price now high, other companies could conceivably make generic copies, since patents have long expired. One factor that could discourage that option is that Daraprim's distribution is now tightly controlled, making it harder for generic companies to get the samples they need for the required testing.
The switch from drugstores to controlled distribution was made in June by Impax, not by Turing. Still, controlled distribution was a strategy Mr. Shkreli talked about at his previous company as a way to thwart generics.
The drug is also used to treat malaria and appears on the World Health Organization Model List of Essential Medicines. Toxoplasmosis infections are a feline gift to the world.
Discussion from a September SoylentNews article.
From the Chicago Tribune:
Stepping into the furor over eye-popping price spikes for old generic medicines, a maker of compounded drugs will begin selling $1 doses of Daraprim, whose price recently was jacked up to $750 per pill by Turing Pharmaceuticals.
San Diego-based Imprimis Pharmaceuticals Inc., which mixes approved drug ingredients to fill individual patient prescriptions, said Thursday it will supply capsules containing Daraprim's active ingredients, pyrimethamine and leucovorin, for $99 for a 100-capsule bottle, via its website.
The 3 1/2-year-old drug compounding firm also plans to start making inexpensive versions of other generic drugs whose prices have skyrocketed, Chief Executive Mark Baum told The Associated Press.
"We are looking at all of these cases where the sole-source generic companies are jacking the price way up," Baum said in an interview. "There'll be many more of these" compounded drugs coming in the near future.
The high price of prescription medicines in the U.S. — from drugs for cancer and rare diseases that cost hundreds of thousands of dollars a year down to once-cheap generic drugs now costing many times their old price — has become a hot issue in the 2016 presidential race.
News that Turing, Valeant Pharmaceuticals International Inc. and other drugmakers have bought rights to old, cheap medicines that are the only treatment for serious diseases and then hiked prices severalfold has angered patients. It's triggered government investigations, politicians' proposals to fight "price gouging," heavy media scrutiny and a big slump in biotech stock prices.
Well, that certainly didn't take long. At $99/100 pills, I expect the profits are slim indeed - but there is probably a profit. The company certainly can't afford to just give the stuff away.
So - if one company can show a profit at $1/pill, how in hell does anyone justify selling the pill for hundreds of dollars?
The legal saga over Martin Shkreli's infamous 5,000 percent price hike of a life-saving anti-parasitic drug has ended with a flat denial from the highest court in the land.
On Monday, the Supreme Court rejected Shkreli's petition to appeal an order to return $64.6 million in profits from the pricing scheme of Daraprim, a decades-old drug used to treat toxoplasmosis. The condition is caused by a single-celled parasite that can be deadly for newborns and people with compromised immune systems, such as people who have HIV, cancer, or an organ transplant.
[...]
In a lawsuit filed in 2021, the Federal Trade Commission and seven state attorneys general accused Shkreli of building a "web of anticompetitive restrictions to box out the competition." In January of 2022, US District Court Judge Denise Cote agreed, finding that Shkreli's conduct was "egregious, deliberate, repetitive, long-running, and ultimately dangerous."Cotes banned Shkreli from the pharmaceutical industry for life and found him liable for $64.6 million in disgorgement. In January 2024, an appeals court upheld Cote's ruling.
[...]
Shkreli's lawyer filed a petition with the Supreme Court arguing that the ill-gotten profits from Daraprim's price hike went to corporate entities, not Shkreli personally, and that federal courts had issued conflicting rulings on disgorgement liabilities.In a list of orders today, the Supreme Court announced it denied Shkreli's petition to hear his appeal. The justices offered no explanation and no dissents were noted.
The denial is Shkreli's second rejection from the Supreme Court.
Previously on SoylentNews: SoylentNews Stories on Shkreli (Search Link)
Infamous Pharma Company Founded by Shkreli Files for Bankruptcy, Blames Shkreli - 20230514
Shkreli Released From Prison to Halfway House After Serving - 20220522
Judge Denies Shkreli's "Delusional Self-Aggrandizing" Plea to Get Out of Jail - 20200519
Sobbing Martin Shkreli Sentenced to 7 Years in Prison for Defrauding Investors - 20180310
FBI Arrests Shkreli of the Drug Price Hike Fame - 20151217 (That didn't take him long.)
Cost of Daraprim Medication Raised by Over 50 Times - 20150922
(Score: 0) by Anonymous Coward on Thursday December 17 2015, @11:22PM
Whoever said there is no such thing as bad publicity?
If the guy hadn't been sociopathically confident that hurting the weakest among us would go unremarked he never would have drawn the attention of the FBI in the first place.
(Score: 0) by Anonymous Coward on Thursday December 17 2015, @11:45PM
That really didn't have anything to do with it. The SEC was on already on his ass because he pissed off and ripped off too many doing illegal securities stuff.
(Score: 2, Insightful) by Anonymous Coward on Friday December 18 2015, @12:29AM
Just because they were looking at him doesn't mean they would have acted on it. The SEC Is ridiculously underfunded and understaffed. This guy made himself so infamous that indicting him is probably the biggest possible PR win the SEC could pull off. Bernie Madoff screwed over rich people, the rich can take care themselves. But this guy screwed over people who were dying. Everybody hates him, even little children. And so now everybody loves the SEC.
(Score: 5, Informative) by hemocyanin on Friday December 18 2015, @02:08AM
I could see it going either way.
Here's a summary of how this unfolded:
1. MS starts a hedge fund, loses all the money really fast on a bad short, but for months afterward, continues to advertise it as wildly successful with millions in assets when it really had only about $1000 to its name.
2. MS starts a new company separate from the hedge fund, buys an old drug and jacks the price way up. He uses the assets and profits of the new company to pay off the people he defrauded with his hedge fund scheme, but since he can't just give them money, he hires them as "consultants" and pays them that way. The problem with this is that he did that without Board of Directors approval, and the board eventually boots him out of his own company because this second company has no duty to the hedge fund victims. The SEC gets wind of the shenanigans.
3. MS buys that toxoplasmosis drug and jacks the price right up to the heavens, getting infamous in the process.
4. MS is arrested for 1 & 2.
So ... would he have been arrested if he hadn't made the news? I don't know but I hope so ... he did bilk a bunch of people out of millions of dollars by fraudulently advertising success when he was a massive failure, and then he used other people's money to pay off the first group. Although the payoff to the first group was from a different company, it still feels very Ponzi-ish and after Madoff, I'd hope the SEC is sensitive to taking out such schemers.
(Score: 1, Informative) by Anonymous Coward on Friday December 18 2015, @03:46AM
What your analysis ignores is that the SEC is massively undefunded. [thefiscaltimes.com] They have to really pick their battles. Shkreli is tailor made for their operating constraints - very high positive publicity, low cost because he doesn't have the corporate resources to fight back the way most banksters do.
(Score: 2) by hemocyanin on Friday December 18 2015, @05:58AM
That's a good point --- I hope it isn't true but the bitter side of me suspects you are correct.
(Score: 0) by Anonymous Coward on Friday December 18 2015, @02:41PM
Good points. On top of that. Taking him down may get you better funding.
But mostly it was senators and congress congressmen were looking into the matter. At that point the SEC probably got a few dozen calls to highly placed dudes and 'it was taken care of'. People do not really understand how our gov works. It is one giant game of 'good ol boys'. We get to pretend we have a say in it.
(Score: 3, Informative) by Anonymous Coward on Friday December 18 2015, @12:36AM
The correct word is infamy.
We need to stop using the same word that we use for the noble and heroic among us when we are describing scoundrels and cowards.
-- gewg_
(Score: 2) by CortoMaltese on Thursday December 17 2015, @11:22PM
All I can say is: Good riddance
(Score: 2) by captain normal on Friday December 18 2015, @05:30AM
But he isn't in prison yet.
The Musk/Trump interview appears to have been hacked, but not a DDOS hack...more like A Distributed Denial of Reality.
(Score: 1) by BrockDockdale on Friday December 18 2015, @08:56PM
I'm starting to notice something belatedly that probably should've been obvious my whole life, which is that when you hear about someone being a douche in one way or one domain, you can probably find other domains in which they've also been a douche. Thus doucherie is non-domain-specific. In other words, people don't just do douchey things; they are douches. Meaning that their doucheté crosses over ALL spheres and domains.
Applications:
(Score: 4, Insightful) by edIII on Thursday December 17 2015, @11:25PM
"Ha Ha!" - Nelson
( I really do love seeing karma in action. Couldn't have happened to a nicer Wall Street sociopath )
Technically, lunchtime is at any moment. It's just a wave function.
(Score: 0) by Anonymous Coward on Thursday December 17 2015, @11:44PM
( I really do love seeing karma in action. Couldn't have happened to a nicer Wall Street sociopath )
Yep. Now let's wait for RedHat(e) to be rocked by some kind of major scandal as a result of their various and well-documented schenanigans.
*crosses fingers*
(Score: 2) by fido_dogstoyevsky on Friday December 18 2015, @01:47AM
( I really do love seeing karma in action. Couldn't have happened to a nicer Wall Street sociopath )
Yep. Now let's wait for RedHat(e) to be rocked by some kind of major scandal as a result of their various and well-documented schenanigans.
*crosses fingers*
For what it's worth, redhat has joined microsoft on my* company's black list of suppliers (ie buying or installing software from these sources WILL get you fired).
*My company, my rules. And both employees know the rules.
It's NOT a conspiracy... it's a plot.
(Score: 2) by linuxrocks123 on Friday December 18 2015, @06:42AM
A quick Google for "Red Hat controversy" on both the main site and Google News turned up nothing. Can someone tell me what Red Hat did that makes you hate them now?
(Score: 2) by fido_dogstoyevsky on Friday December 18 2015, @09:28AM
A quick Google for "Red Hat controversy" on both the main site and Google News turned up nothing. Can someone tell me what Red Hat did that makes you hate them now?
The "init" system that must not be named.
It's NOT a conspiracy... it's a plot.
(Score: 0) by Anonymous Coward on Friday December 18 2015, @07:13AM
So you're boycotting the Linux kernel now? Redhat wrote every nth line in that thing.
(Score: 2) by fido_dogstoyevsky on Friday December 18 2015, @09:36AM
So you're boycotting the Linux kernel now? Redhat wrote every nth line in that thing.
They don't own the kernel. But I've made preparations to jump ship if they ever do.
It's NOT a conspiracy... it's a plot.
(Score: 2, Funny) by Anonymous Coward on Thursday December 17 2015, @11:27PM
two LP records [wikipedia.org]: $2 million
bail: $5 million
living large: priceless
(Score: 2, Insightful) by Anonymous Coward on Thursday December 17 2015, @11:50PM
Goes to show you, if you are gonna be evil, try to stay below the radar.
Yep. Go work for a company that just uses "Don't be evil" as a motto, and "give away" a bunch of free services that ultimately represent the most comprehensive surveillance mechanisms known to humanity. Nobody will expect a thing!
For an added bonus (maybe in hell they'll give you a half-glass of cold water), mod-bomb and shout down people who point that out.
(Score: 1, Funny) by Anonymous Coward on Friday December 18 2015, @02:10AM
A rather impressive surveillance apparatus can be built while just being evil without pretense or apology: "Windows 10 adoption estimated at 120 million" [techradar.com].
(Score: 0) by Anonymous Coward on Friday December 18 2015, @08:54AM
We got into this with the best of intentions.
(Score: 0) by Anonymous Coward on Friday December 18 2015, @12:07AM
If he'd kept his mouth shut, some bureaucrat wouldn't have marked him as a target. Also, that bureaucrat could have family and friends that need the medicine, and to have that prick gloat about how expensive it is now didn't ingratiate him.
(Score: -1, Troll) by Anonymous Coward on Friday December 18 2015, @12:21AM
What the fuck are you talking about with your mythical "bureaucrat" scenario? Why not learn a fact or two about this before demonstrating what an ignorant dumbass you are.
(Score: 2) by takyon on Friday December 18 2015, @12:08AM
https://www.washingtonpost.com/news/business/wp/2015/12/17/pharma-bro-martin-shkreli-arrested-for-securities-fraud/ [washingtonpost.com]
http://www.marketwatch.com/story/pharma-bro-martin-shkreli-was-arrested-and-the-twitter-tributes-rolled-in-2015-12-17 [marketwatch.com]
And of course, what happens to that $2m Wu-Tang Clan record?
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 3, Insightful) by Anonymous Coward on Friday December 18 2015, @12:25AM
If you were to tell me there was a $2M LP out there, I'd think that it must be Elvis' demo record, or it must be Edison's original wax roll. But Wu-Tang Clan??? Are you kidding me? The real karma here is that someone really ripped him off if he had to pay $2M for a Wu-Tang Clan record.
(Score: 3, Funny) by bob_super on Friday December 18 2015, @12:26AM
The record is his property, until someone slaps him with a big enough fine that he has to sell it...
Hopefully he sells it to another unpleasant being, which has unrelated troubles, so we get ourselves a Cursed Record urban legend,
(Score: 2) by takyon on Friday December 18 2015, @01:22AM
Yes I enjoy that scenario ++
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 0) by Anonymous Coward on Friday December 18 2015, @12:27AM
Daily reminder that Martin Shkreli did nothing wrong.
(Score: 2, Informative) by Anonymous Coward on Friday December 18 2015, @12:41AM
Greed is among The 7 Deadly Sins.
Additionally,if your source doesn't list "shell game" and "sham" as wrong, you are a very poor judge of sources.
-- gewg_
(Score: 1, Funny) by Anonymous Coward on Friday December 18 2015, @12:56PM
Disregard that, I suck cocks.
-- gewg_
(Score: 2) by fido_dogstoyevsky on Friday December 18 2015, @01:51AM
Daily reminder that Martin Shkreli did nothing wrong.
For a nonstandard meaning of "wrong". Or did you mean "some of the things he did weren't illegal"?
It's NOT a conspiracy... it's a plot.
(Score: 1) by redneckmother on Friday December 18 2015, @04:03AM
"some of the things he did weren't illegal"
Unlawful vs Ilegal:
Unlawful means "contrary to law".
"Illegal" is a sick bird.
And, yes, he is one sick bird.
:)
Mas cerveza por favor.
(Score: 2) by Nerdfest on Friday December 18 2015, @01:52AM
No, he hasn't done anything that has been deemed illegal by the 'justice system'. He has most definitely done something wrong.
(Score: 2) by Runaway1956 on Friday December 18 2015, @02:31AM
Unethical is "wrong".
Immoral is "wrong".
Illegal is "wrong".
Shkreli did all three.
“I have become friends with many school shooters” - Tampon Tim Walz
(Score: 2) by kurenai.tsubasa on Friday December 18 2015, @03:35AM
No, he didn't do anything wrong. This was a fault of the free market. Why weren't there multiple producers competing?
Well, fuck, I just have to look at reality. If there were multiple producers competing, they would have conspired to make up some bullshit story about why the drug suddenly costs so much. If the demographic that needed that drug were hated, the Narrative would be accepted. This never happened.
Ultimately the free market did deliver (indeed the only proof against evil, at least when it concerns things that are not in the commons). Another producer opened shop at a much more reasonable price. I would have liked to have seen the consequences of that. His company destroyed? In a soup line?
Yet, greed shows it is insatiable. He had a solid business going until he got undercut. Why did he need to do the other things? The answer is only found in the lack of empathy found in those who would do such things. That seems a tautology, but it has been made recently obvious to me that not even market forces can constrain evil.
This post may be contradictory. He probably did something to piss off the Illuminati.
(Score: 0) by Anonymous Coward on Friday December 18 2015, @07:15AM
The guy has a history of fraud, of course in capitalism this is expected behavior and not actually wrong.
(Score: 4, Insightful) by bzipitidoo on Friday December 18 2015, @01:21AM
Will Big Pharma come riding to the rescue of their bro? Probably not. Could they have, maybe, even had a hand in encouraging the SEC to go after him? Shkreli is an embarrassment to Big Pharma, makes them all look bad, raises public awareness of how hugely they gouge everyone. Plus, the way he talks to the public is unbelievably stupid and insensitive, worse than Tony Hayward's "I'd like my life back." Ranks up there with Lay and Skilling of Enron "taking charge" of their trial by arrogantly attempting to tell the jury what to think. What is Shkreli but a massively spoiled brat? He has a sickeningly smug smirk on his face in the photo of him I've seen most often.
Whether or not Big Pharma had anything to do with Shkreli's arrest, doubtless they are celebrating his downfall. It may not be entirely in relief that his embarrassing conduct is about to be curtailed. The ones among them who are as greedy as he is, maybe no better than him, may also be happy to see a competitor removed.
(Score: 2) by gman003 on Friday December 18 2015, @02:24AM
Shkreli was never part of Big Pharma. He founded several companies that bought the rights to various niche drugs from Big Pharma companies, but all of them were very, very minor players. If Pfizer, Novartis and Roche are the Microsoft, Apple and Google of biotech, Shkreli is like the guy who ran SCO (in far more ways than one). Contributed nothing to the industry, created nothing of his own, tried some massive stunt hoping to get obscene profits like the big boys but ended up penniless and ridiculed.
(Score: 4, Interesting) by CaTfiSh on Friday December 18 2015, @03:14AM
Last Wednesday evening, the day prior to the raid, Martin was streaming his bored life and posted it to Youtube.
Check the video out: https://www.youtube.com/watch?v=I-4D6yj-cR4 [youtube.com]
Skip to the 1:22:14 mark. He receives a call, "Yes, hello. This is special agent...", at which time Martin hangs up on the caller.
Not sure if it was legitimate, or just a really well-timed troll, but he may have wanted to take that call after all.
(Score: 1) by patrick on Friday December 18 2015, @12:08PM
It was a prank call. It's the same recording as the "Illegal Pornography" prank here [prankowl.com].
(Score: 2) by mendax on Friday December 18 2015, @03:41AM
Where did this guy get the $5 million to post bail? I'm surprised that the feds didn't freeze his assets. In any case, how that he's been arrested, no doubt the feds obtained a search warrant and have stripped his home of computers, hard drives, files, and anything else of interest to them. One wonders what they will find on his computers. Karma would be doubly remarkable in this case if we find out that he's another Jared Fogle [nytimes.com], gets busted form one thing and the cops find evidence other other dirty shit after they search his place.
It's really quite a simple choice: Life, Death, or Los Angeles.
(Score: 1, Interesting) by Anonymous Coward on Friday December 18 2015, @04:01AM
You only need 10% to post bail. There is a gynormous bail bonds industry predicated on that.
(Score: 2) by sjames on Friday December 18 2015, @04:47AM
While not so much in this case, the problem for the rest of us is that you don't get that 10% back even when you're found not guilty
(Score: 3, Informative) by hemocyanin on Friday December 18 2015, @06:09AM
Well you have three choices:
1. Post the entire amount in cash and get it back later.
2. Make a contract with a bondsman for 10% of that amount where the bondsman keeps the 10% as his fee, but if you skip town, the bondsman pays 10x that amount to the court, and then has to figure out how to get the money back from you.
3. You can also choose to await trial in jail.
Honestly, the bondsman faces a lot of risk in this scenario and to assume that risk for a 10% fee is hardly egregious to those who make use of a bondsman's services, considering that they have two other choices. In comparison, think about a realtor -- they're going to take five or six percent of a sale price and face no risk at all.
(Score: 4, Insightful) by sjames on Friday December 18 2015, @06:33AM
I don't blame the bondsman, he does face substantial risk and collecting on a skip is a problem to be sure.
The problem is when judges multiply the reasonable bail by 10 or so knowing you can pay the bondsman 10% of it.
(Score: 0) by Anonymous Coward on Friday December 18 2015, @11:20AM
> In comparison, think about a realtor -- they're going to take five or six percent of a sale price and face no risk at all.
That is in large part due to having an effective monopoly.
It is so pervasive that you just used their trademarked name [realtor.org] for themselves and didn't even realize it.
(Score: 0) by Anonymous Coward on Friday December 18 2015, @04:24PM
Considering the taxes you'll have to pay upon liquidating assets to pay cash bail, 10% sounds like a good deal.
(Score: 2) by jasassin on Friday December 18 2015, @11:20AM
I'm waiting for a conviction. No, hoping for one.
jasassin@gmail.com GPG Key ID: 0xE6462C68A9A3DB5A