Martin Shkreli and his journey in becoming the “most hated man in America” was definitely one for the books. Some critics depicted his actions as a reflection of greed in its purest form, and most of the public was outraged at the blatant disregard for morality and the lives of actual people that Martin carelessly displayed throughout his time as a pharmaceutical executive. While at the same time, Martin garnered the support of online communities.
But what is it exactly that Martin Shkreli did and how did he become one of the most disliked personalities in the United States in modern times? What crimes was he guilty of and what were the consequences felt by the people due to his actions? Let us take a look at Martin Shkreli and the path he took in order to become “The Most Hated Man In America.”
What Exactly Did Martin Shkreli Do?
What exactly did Martin Shkreli do to invoke the wrath of the American public? Well, in a nutshell, Martin was the mastermind behind the disastrous pricing hike of the pharmaceutical drug Daraprim — the details of which would be discussed later on in this article.
Being awarded the rights to the drug, Martin’s company upped the price of the recently acquired Daraprim to an increase that astoundingly reaches a multi-thousand percent increase.
Obviously, this news did not sit well with the millions of customers that relied on Daraprim to sustain their daily needs. Even despite the constant claims by Martin that patients that needed Daraprim and did not have enough money would be supplied the drug at a lower cost.
"Half of our drug we give away for $1. So I think that shows our commitment to patients," - Martin Shkreli
The news headlines were all too enticing for the general public to understand exactly what Martin was trying to do - fund further research to help patients. By jacking up the price of Daraprim, Martin was not increasing the price for the average patient that relied on Daraprim but increasing the cost for insurance companies.
News of the absurd business move by Martin and the companies he led made the headlines for several weeks in the year 2015. But before we go into it any further, just who is Martin Shkreli, and what circumstances did he have in his life that led him to make one of the most drastic moves that have been seen in the American economy in the 21st century?
Who is Martin Shkreli?
Martin Shkreli was born on March 17, 1983, in Brooklyn, New York parents who immigrated from Albania and Croatia. While his family primarily practiced the Roman Catholic faith, Martin did not believe in God, calling his religion a mere “guiding post” for his life.
Living a relatively normal urban life and attending school diligently, Martin showed no initial signs of the man he would soon become. After much effort in his studies, Martin was able to get an internship with the Wall Street hedge fund Cramer, Berkowitz, and Company at the young age of 17.
Considered a financial genius, Martin actually helped the fund after successfully predicting a price drop in the shares of a pharmaceutical company. His successful move drew so much attention that the Securities and Exchange Commission even attempted to investigate the matter, but found no conclusive evidence of cheating or manipulation.
Eventually outgrowing the fund after spending four years as a fully-fledged associate, Martin left Cramer, Berkowitz, and Company in the search for something else. He had established multiple companies such as MSMB Capital Management, and Retrophin which worked under the parent MSMB company brand.
In February 2015, Martin would soon establish Turing Pharmaceuticals, a company that would be the center of the controversy and one that would launch his name into the hall of infamy, cementing his reputation once and for all in the eyes of the American public.
Shortly after leaving Retrophin, Martin founded Turing and started off with three drugs that he acquired from his partnership with his previous company. From this starting point, Martin started using his previous experience to “good” use by developing a business strategy for Turing.
Martin’s plan was to purchase drugs in the market that have expired patents — meaning that the drugs can be produced generically — and upping the price of the said medicine to astronomical prices in order to get the most profit out of it.
Observing that the market for patent-expired drugs was not that large and that the legal processes necessary in order to obtain approval to manufacture generic drugs will not be cheap, Turing found an opportunity to capture the market for these kinds of drugs which he predicted would yield remarkable returns for Turing.
And so, following the plan that Martin created, Turing eventually bought the drug Daraprim on August 10, 2015. What happened next would be forever remembered as one of the most scandalous moves a business could ever do in recent history, especially in the pharmaceutical industry.
What Is Daraprim?
Daraprim, also known as pyrimethamine, is a drug that was approved by the Food and Drug Administration way back in 1953. While the approval of the drug has been decades back, the use of the medication has grown in popularity over the years, and in 2015, it was commonly prescribed for cases of malaria and parasitic diseases.
The drug was also a standard medication for patients with AIDS. Daraprim was first owned by the pharmaceutical company Impax. However, after Turing had set its sights on the drug, the two companies entered a partnership that pulled Daraprim out of the shelves of pharmacies and other authorized sellers.
Martin’s strategy was to limit the competition for the drug so that he could push the price of Daraprim to whatever price he so chooses.
After the sale of the drug has been finalized between Impax and Turing, the price of Daraprim shot up to a whopping $750 per pill from its original price of $13.50. The total recorded markup percentage that literally happened overnight reached up to a 5,455% increase.
After the price hike
The absurd price hike of Daraprim was first raised as a concern by the Infectious Diseases Society of America and the HIV Medicine Association. They were the first organizations to question the bizarre move by Turing, and soon after, other prominent organizations and personalities joined the protests.
Organizations such as the Pharmaceutical Research and Manufacturers of America and running presidential candidates at the time namely Hillary Clinton, Donald Trump, and Bernie Sanders also demanded an inquiry on the Daraprim price increase scandal that was hounding Turing at the time.
Predictably, many of the American public demanded that Turing must return Daraprim prices to their original value. The Daraprim price hike became a political topic, with several high-profile political figures expressing their discontent about the price hike.
Despite the calls, Martin initially ignored the pleas and even went on air to voice his side of the controversy and how the price increase of the drug would not severely affect patients who rely on it for their medication.
In an interview with Bloomberg Markets, Martin infamously 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.”
Continuing to make tone-deaf statements drew the ire of the people even more and the case against Martin and Turing was reaching the boiling point. A few days after making his negatively received statements, Martin announced that the company would be lowering the prices of Daraprim. However, as of November 2015, this decision was not fulfilled and the price of the drug did not go down as promised. Obviously, the public’s hate for Martin had only grown worse by then.
Imprimis Pharmaceuticals Responds
Not everyone took Martin’s decision to stick with the price hike for Daraprim as it is. Mark Baum, the CEO of Imprimis Pharmaceuticals, announced his company’s decision to sell an alternative drug to Daraprim at only $1 per dosage.
Their alternative drug was said to contain the same pyrimethamine ingredient that was also found in Daraprim. While an effective marketing strategy that rode the hype created by the controversies surrounding Turing, Baum went on to boldly call out their competitor’s actions.
Mark said, “This is not the first time a sole supply generic drug – especially one that has been approved for use as long as Daraprim – has had its price increased suddenly and to a level that may make it unaffordable.”
Facing increased pressure from all sides, Martin was called up by the legal authorities in order to finally explain the Daraprim price hike, and hopefully, justify the price increase which was obviously uncalled for.
In the middle of the issue, Martin was issued a subpoena to face the Commission on Oversight and Government Reform. While he initially tried to reverse the order, the subpoena for his appearance nonetheless pushed through in the end.
Martin’s image was further tarnished by his weird and uncompliant behavior during the hearings that were conducted on February 4, 2016. For all the questions that were asked to him, Martin’s only response was to invoke his right to the Fifth Amendment and nothing more. His snarky personality was fully blasted for the world to see.
Even minor questions such as those that inquired about his hobbies were left unanswered, leaving the public even more unsatisfied and disappointed at the Turing founder’s behavior. A few months prior to his appearance in front of Congress, Martin was issued a warrant of arrest by the FBI on December 17, 2015.
During his arrest, Martin was charged with committing securities fraud. His charges were officially processed after authorities looked into Martin’s activities when he was still working with MSMB and Retrophin.
After a thorough investigation, it was found that Martin continuously deceived the investors of his companies through several manipulation techniques. Martin, still possessing the eccentric personality that has made the country hate him with a passion, has actively denied any of the accusations pinned against him.
Martin even went as far as to accuse the government of selectively targeting him just because of the Daraprim issue. Repeatedly belittling the system through live rants posted online and making other negative statements, Martin was issued a gag order by the courts for his alleged “campaign of disruption”.
At the end of it all, Martin was found guilty of two counts of securities fraud and along with it, a single count of conspiracy to commit securities fraud. While he initially posted bail, the courts immediately revoked this privilege after Martin made a threatening Facebook post offering $5,000 to anyone who could provide him with a strand of politician Hillary Clinton’s hair.
The saga of disturbance that Martin started would finally come to an end on March 9, 2018, when he was sentenced to seven years in prison.
After the Daraprim issue settled down. The price of the drug did not go down from its skyrocketed price of $750. To this day, no changes have occurred with Daraprim’s pricing formula.
However, in recent times, the Food and Drug Administration had announced that a generic version of the drug is approved for distribution. The active sponsor for the generic form of Daraprim is Cerovene Incorporated.
The year 2022 was another turbulent time in Martin’s life. On January 14, he was issued an order to return a grand total of $64.6 million to the state and to the victims that were affected by the Daraprim price hike.
He was also banned from working in the pharmaceutical industry for life. The following month, on February 23, was again issued an order to pay a total of $1.39 million for his violation of securities laws.
On May 18, 2022, Martin was released from prison after serving the majority of his seven-year sentence.
Martin Shkreli’s Net Worth
Way back in January 2016, Martin’s net worth was first estimated to be around $45 million. However, reports have recorded his losses at the $40 million mark solely from his online trading.
The following year, in June 2017, Martin’s updated net worth was an estimated $70 million, and he still owned shares of Turing Pharmaceuticals which were around the $30 to $50 million range.
The Daraprim scandal which centered around him remains to be a lesson on the ethics and moral boundaries that businesses should always strive to maintain regularly. It also serves as a lesson on how media can interpret and create their own narratives to make the public outraged about something.