Is Shkreli really the ‘evil’ price manipulator that the media has painted him as, or does he truly have good intentions? Photographs by Nigel Parry.


Martin Shkreli made headlines in 2015 after he raised the price of his company’s drug ‘Daraprim’ by a staggering 5000%, which raised the price of $13.50 per pill to $750 per pill. The media has painted Shkreli as a “smug, evil, and unapologetic” price manipulator who wants nothing more than to become rich while others suffer.


But is this true?


Shkreli’s Early Life

Shkreli was an academically gifted child. He skipped several grades and began investing in the stock market as early as age twelve. After realizing his academic talent, his parents sent him to Hunter College High School, a public school for gifted kids in Manhattan’s Upper East Side.


From there, Shkreli received an internship at Cramer, Berkowitz &Co. – a hedge fund managed by Jim Cramer, host of CNBC’s Mad Money. During his time with Berkowitz & Co. Shkreli engaged in several investment opportunities, one of which brought the company millions in revenue after he predicted a stock shortage of a biotech company.


At 21, Shkreli struck out and got a job with another hedge, fund, Intrepid. His time with Intrepid did not last long, however, and he seen received a $2 million investment and launched his own hedge fund – which is a remarkable feat for anyone. However, the fund was not successful, and Shkreli has been quoted saying “It’s basically impossible to be a great investor in your 20s. I haven’t met many people who have really accrued enough knowledge to do it… And running a hedge fund requires you to be more than a good investor.. I would say the fund was almost more of an experiment,”


Shkreli goes into the Pharmaceutical Industry

By 2010, Shkreli had been making money off the pharmaceutical and biotech industry for a decade. He knew the industry and decided to found his own company, Retrophin, in 2010.


Shkreli has a rare knack for understanding complex medical trials despite having never attended medical school, and people say it’s one of the things that sets him apart. “He has a very scientific mind,” Ed Painter, the head of investor relations at Turing told me. “He’s smart and he knows the science as well as the PhDs working for him.” “You give him a science textbook on chemistry, he’d give it back to you in nine months and he’d have it memorized,” one early investor in Shkreli’s first drug company, Retrophin, anonymously told the New York Times. “He’s a sponge for information.”


During his time at Retrophin, Shkreli was no stranger to controversy. Allegations surfaced , stating that Shkreli has used company assets to resolve legal claims against himself and MSMB.
Shkreli’s financial escapades at Retrophin involved payouts of millions of dollars and the transfer of hundreds of thousands of shares of Retrophin stock, the company alleged. The transactions sparked a wave of civil lawsuits and a federal investigation of Shkreli by the United State’s Attorney’s Office, Bloomberg reported.

In August, Retrophin launched a $65 million lawsuit alleging that Shkreli created the biotech company and took it public solely to provide stock to his hedge fund investors at MSMB when the fund became insolvent, Forbes reported. All accusations were later dropped.


Shkreli gets fired and starts Turing Pharmaceuticals

Shkreli told the Hustle that he, “routinely fought with the board (at Retrophin) and was very dismissive of them, but it was really difficult for someone who has $3-4 million shares of the stock to be ousted by someone who owns no stock,” … “But Aselage asked them to fire me and got them to agree… I could have fought it, but I decided it would be better to succeed without them.”


It was during his time at Turing that Shkreli decided to purchase the drug, Daraprim, which treats a serious parasite infection (toxoplasmosis) of the body, brain, or eye or to prevent toxoplasmosis infection in people with HIV infection.


Shkreli’s decision to jack up the price of Daraprim was made out of ‘seemingly’ good intentions


Turing’s price hike was completely legal, and was seemingly done out of good intentions, let me explain.


Shkreli has stated that the company needs to earn back some of the $55 million it spent to purchase the drug. He also said that the 2,000 or so current Daraprim patients need a better drug, and that takes Research and Development, which if you didn’t know, is extremely costly.


So costly, that developing a new drug has been estimated to cost upwards of $2.5 billion US dollars.


But do Daraprim users really need a better drug? Well, according to Shkreli, two people died last year because the drug did not work for them – a statistic that pushed him to raise the price for Daraprim.


Although he has been quoted saying the price hike was made to fund a new drug, I could not find any evidence to prove this.


What I can prove is that even though the drug is more expensive, users can still access it because Turing Pharmaceuticals gives away six of every ten bottles for free, or for a dollar a pill.


Nancy Retzlaff, Turing’s chief commercial officer, also said Turing invests “60 percent of [their’ net revenues” in research and development for a “better, safer, and more effective version of Daraprim” – Martin Shkreli.


So what happens to the other four bottles of Daraprim that are sold?


Shkreli Insists it isn’t individuals who are paying more for the drug, but rather, insurance companies

The other four out of ten bottles are purchased by insurance companies that provide hospitals and pharmacies with the medication – they are the people paying more for the drug, not the average consumer.


Documents reveal that initially, hospitals and patients had difficulty accessing the drug because of the hikes, but Shkreli says that by making smaller formats for hospitals and capping patients insurance payments at $10 per month, those problems were resolved, and the hospitals maintained a healthy inventory of the drug.


To recap:
1. The existing drug is currently underperforming, and people are dying because of this. Shkreli wants to make a new, better one.
2. Shkreli’s company needs money to do research on that.
3. Shkreli raises the existing, drug’s price so that he can make money for research and development
4. Insurance companies have to pay for that increase.
5. Patients are not paying for it, and they are still getting it. Some get it for free.


So, Is Martin Shkreli really the evil price manipulator that the media has labelled him as? Or, is he a savvy businessman who raised the price of Daraprim in order to create a better, more reliable drug? You decide

There are two ways to see all of this
  1. Shkreli is a bad guy, a kind of pharmaceutical bandit.
  2. Shkreli is a good guy who wants to create a better drug – or at least a good businessman.
Personally, I see him as a little bit of both. It takes a ballsy person to raise the price of a life-saving drug by 5000 percent, and still say you are doing people a service because someday, you will release a better drug.


The thing is, people don’t need a better drug right now, they need access to Daraprim. And the two people that died because the drug was not good enough is most likely much lower than the number of people who cannot access it because of the price.


Although 60% of Daraprim users get the drug for basically nothing, there are still a number of people who cannot get access to it, or must wait weeks for access.


The demand for the drug, however, is relatively low, with only 2,000 people in the US that actually need it on an annual basis.


Say what you want about Martin Shkreli, the guy understands how to make money and influence markets. The mainstream media may fabricate this story as a man’s evil lust for becoming rich, but the reality behind it is that Shkreli is one of many price manipulators in a dirty pharmaceutical industry.


What he has done has been accomplished time and time again, and just like any other product, the pharmaceutical industry is just that: an industry. And where there is money to be made, someone will step in and make money – in this case, Shkreli’s rise to wealth is indeed, not the most ethical approach, but if his plan works out, the 2,000 annual Daraprim users in the US will soon have a better, more effective drug due to the price hike of Daraprim.


We definitely haven’t heard the last from Martin Shkreli.
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