Anyone who has watched the Simpsons knows of Mr. Burns, the evil head of the Springfield Nuclear Power plant. If you listen to the media, one would think that Martin Shkreli, the co-founder of the hedge fund MSMB Capital Management, is the pharmaceutical equivalent of Mr. Burns. Mr. Shkreli may be evil, but he is not, as portrayed in the media, a "pharmaceutical company CEO," at least in the traditional sense.
The 32 -year old Mr. Shkreli parlayed his position on Wall Street and his interest in chemistry making millions of dollars short selling biotech and pharmaceutical stocks. In 2011, Shkreli began to dabble in the pharmaceutical industry. His short selling of the industry brought the attention of federal regulators but it wasn't until he founded Turing Pharmaceuticals that Mr. Shkreli got the attention of the world.
Pharmaceutical companies spend billions of dollars every year in research and development. Companies seeking to profit have had to invest, innovate and develop thousands of miraculous cures and treatments amid an even larger pile of solutions that have gone nowhere. Polio, measles, malaria and other diseases, that were death sentences, are now cured thanks to science and innovation. Drugs like Enbrel have helped those with Rheumatoid arthritis. Sovaldi offers a cure for Hepatitis C. There are drugs in the works that look to extend life, and one day, cure cancer. Without expensive and successful research and development, the drug industry would fail.
Shkreli's Turing Pharmceuticals wasn't seeking to develop cures and treatments. It was essentially a cover to to corner the market on an out of patent pill approved by the Federal Drug Administration (FDA) since 1953. Turing acquired the US marketing rights for Daraprim, originally approved to treat malaria and being used to assist the treatment of AIDS patients, in 2015. Shkreli decided to limit distribution and increase the drug's price from $13.60 to $750. Other companies could eventually develop a more affordable generic version of the drug, but this would take time as entrants contended with the FDA's mountain of regulatory paper work. Shkreli opted to race against the clock betting he could squeeze millions from the drug before competitors came to market. It took just a few weeks for another company, Imprimis Pharmaceuticals (IMMY), to announce they would bring a compounded formula of the drug to market.
The response was harsh and swift, and the attention brought by the controversy appears to have led to Shkreli's downfall. In December, Shkreli was arrested by the Federal Bureau of Investigation (FBI) and charged with running a Ponzi scheme relating to his investments. In an attempt to defend the price hike, Shkreli said, "If there was a company that was selling an Aston Martin at the price of a bicycle, and we buy that company and we ask to charge Toyota prices, I don't think that that should be a crime."
Whatever you call Shkreli, and odds are many people are calling him a number of different things, you should not call him a Pharma CEO. Companies like
