Thursday, December 17, 2015

Bloomberg: Price Gouging Pharma CEO Shrekli Arrested on Securities Fraud Charges

by Nomad

It was really only a matter of time before Martin Shrekli's wings were clipped. And nobody's crying for him.

From the "it couldn't happen to a nicer guy" files...

This year, Turing Pharmaceuticals AG, CEO Martin Shkreli outraged the public sensibilities by raising the price of a HIV treatment drug from $13.50 to $750. 

Shrekli initially scoffed at the firestorm against the decision. He took to Twitter and other social media to essentially give the middle finger to anybody that criticized him.
When the controversy grew louder, he vowed to lower the price. However, it was later reported that he had failed to do so. His critics- which ended up being most of the nation-claimed that Shrekli had never had any intention of lower pricing at all but it was just a ploy to quell the growing public anger at both his greed and arrogance.

It soon became part of the political debate. A spokesman for Democratic candidate Bernie Sanders returned campaign donations from the CEO saying they could not accept to money “from this poster boy for drug company greed.”
Donald Trump - of all people- called Shrekli a "spoiled brat."

Behind the scenes, Shrekli's pricing decision was an embarrassment to other pharma companies which had for some time engaged in price-gouging extortionary tactics in the name of profit-making. 

Drawing the world's attention to the industry's incredible and hard-to-justify profiteering is not something pharma CEOs want. Incredible is no exaggeration either.  
The global market for pharmaceuticals topped $1 trillion in sales in 2014. The world’s 10 largest drug companies generated $429.4 billion of that revenue. Five of the top 10 companies are headquartered in the U.S.: Johnson & Johnson, Pfizer, Abbot Laboratories, Merck and Eli Lilly.
It was only a matter of time before the forces from both sides combined and gave Shkreli his much deserved comeuppance. 

Today, Bloomberg reported that Martin Shkreli has been arrested on securities fraud charges related to a firm he had founded.
Prosecutors charged him with illegally taking stock from Retrophin Inc., a biotechnology firm he started in 2011, and using it pay off debts from unrelated business dealings. He was later ousted from the company, where he’d been chief executive officer, and sued by its board.
 More specifically, the prosecutors have 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.
In addition to fines and possible jail time, if found guilty, Shrekli could be banned from running a public company. That potential could spell disaster for the future of his companies and  his price-gouging tactics.

For the details of the charges against him, click on the link below:

Pharma CEO Martin Shkreli Arrested on Charges of Securities Fraud