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Former hedge fund manager acquires life-saving drug, raises price 5,555% to $750/pill

Discussion in 'Sports and News' started by bigpern23, Sep 21, 2015.

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  1. bigpern23

    bigpern23 Well-Known Member

    bigpern23, Sep 21, 2015
    #1
  2. swingline

    swingline Well-Known Member

    Freedom! Capitalism!
     
    swingline, Sep 21, 2015
    #2
  3. TheSportsPredictor

    TheSportsPredictor Well-Known Member

    Are we asking for regulations?
     
    TheSportsPredictor, Sep 21, 2015
    #3
  4. poindexter

    poindexter Well-Known Member

    If you don't want to pay for it, don't get sick.
     
    poindexter, Sep 21, 2015
    #4
    LongTimeListener likes this.
  5. The Big Ragu

    The Big Ragu Moderator Staff Member

    Here was Martin Shkreli being interviewed about it on Bloomberg earlier today.

    Drug Goes From $13.50 to $750 Overnight

    He's polished. I know a bit about some of his past business dealings. Without getting into it, suffice to say controversy has followed this guy through a few places.

    Also, a correction: The thread title says it is an AIDs drug. It's a drug for toxoplasmosis, which is a parasite infection.
     
    The Big Ragu, Sep 21, 2015
    #5
  6. bigpern23

    bigpern23 Well-Known Member

    Fair point. The original link I followed to the story described it as an AIDS drug because of toxoplasmosis's prevalence in people with compromised immune systems, such as AIDS patients. I used it in the headline for brevity's sake and to pique curiosity, since I doubt many board members would have clicked the link to find out about price gouging toxoplasmosis patients.
     
    bigpern23, Sep 21, 2015
    #6
  7. bigpern23

    bigpern23 Well-Known Member

    For anyone who doesn't want to read the whole story, below is some of the controversy I think Ragu is referencing:

    This is not the first time the 32-year-old Mr. Shkreli, who has a reputation for both brilliance and brashness, has been the center of controversy. He started MSMB Capital, a hedge fund company, in his 20s and drew attention for urging the Food and Drug Administration not to approve certain drugs made by companies whose stock he was shorting.

    In 2011, Mr. Shkreli started Retrophin, which also acquired old neglected drugs and sharply raised their prices. Retrophin’s board fired Mr. Shkreli a year ago. Last month, it filed a complaint in Federal District Court in Manhattan, accusing him of using Retrophin as a personal piggy bank to pay back angry investors in his hedge fund.

    Mr. Shkreli has denied the accusations.
     
    bigpern23, Sep 21, 2015
    #7
  8. TheSportsPredictor

    TheSportsPredictor Well-Known Member

    He's Muslim, right?
     
    TheSportsPredictor, Sep 21, 2015
    #8
  9. LongTimeListener

    LongTimeListener Well-Known Member

    LongTimeListener, Sep 21, 2015
    #9
  10. The Big Ragu

    The Big Ragu Moderator Staff Member

    It goes beyond even that. He has a reputation as super smart, but also as an immature asshole. And with questionable ethics. He basically ingratiated himself to a few high-profile investors, and barely made his bones working for them before he decided to go out on his own (in his 20s) to run money for a handful of his friends, and he had a little success.

    Then he started Retrophin, and he was a media darling -- there were a lot of "boy wonder" stories. But while he was still running Retrophin, he acted in ways that a CEO of a publicly-traded company can't. And the board of directors was constantly trying to pull him back in. Way too much stuff to get into, but among other things, he had a twitter problem. He posted some things -- one about potential M&A activity -- that had the potential to cause regulator problems. Even worse, though, he was often acting like 20-year-old, not the CEO of a publicly traded company. For example, he tweeted something inviting "Biobabes" to stop by his booth at a trade show. Then, someone discovered that three of his employees were using twitter accounts under aliases to pump up various stocks (which is usually the hallmark of scam artists running pump and dump schemes), including Retrophin -- and even worse, some of them were done in gangster rapper slang.

    There were a litany of problems at Retrophin. I have no idea if the lawsuit they are embroiled in with him now has any merit, but I certainly wouldn't be surprised to find out that he was up to fiscal shenanigans.
     
    The Big Ragu, Sep 21, 2015
    #10
    bigpern23 likes this.
  11. doctorquant

    doctorquant Well-Known Member

    Not at all surprising (a regulator being cozy with those he/she might regulate? I am gobsmacked!) but not all that relevant. The drug in question is a generic, so the only reason it can priced this way is that no one else makes it. However long it's necessary to get through the approval-to-manufacture process is how long this gambit will work.
     
    doctorquant, Sep 21, 2015
    #11
  12. The Big Ragu

    The Big Ragu Moderator Staff Member

    I wonder if financially it makes sense for anyone else to step into this particular market. This is a 60-year-old orphan drug that was developed for a rare disease. There are lots of drugs like that that are not in production, because the market is so small.
     
    The Big Ragu, Sep 21, 2015
    #12
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