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

[bigpern23]

http://www.nytimes.com/2015/09/21/b...se-in-a-drugs-price-raises-protests.html?_r=0

What a ****heel.

 

[swingline]

Freedom! Capitalism!

 

[TheSportsPredictor]

Are we asking for regulations?

 

[poindexter]

If you don't want to pay for it, don't get sick.

 

[The Big Ragu]

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.

 

[bigpern23]

Also, a correction: The thread title says it is an AIDs drug. It's a drug for toxoplasmosis, which is a parasite infection.

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]

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.

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.

 

[TheSportsPredictor]

He's Muslim, right?

 

[LongTimeListener]

I'm sure the FDA will get all of this straightened out.

http://www.nytimes.com/2015/09/20/h...fs-ties-to-drug-industry-raise-questions.html

he has deeper ties to the pharmaceutical industry than any F.D.A.commissioner in recent memory, and some public health advocates question whether his background could tilt him in the direction of an industry he would be in charge of supervising.

 

[The Big Ragu]

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.

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.

 

[User 11148]

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.

 

[The Big Ragu]

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.

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.

 

[BTExpress]

Makes me kind of appreciate the 92 cents I pay for three months' worth of blood pressure medicine.

 

[heyabbott]

Freedom! Capitalism!

Winner.

 

[User 11148]

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.

Yeah, but if demand is that small, it probably wouldn't take much for someone to enter. I suspect it's not the fixed cost to enter per se, but rather the cost involved in clearing the regulatory hurdles. So his little pseudo-monopoly profits are protected by the extant regulatory regime. Which is kinda ironic ...

 

[Armchair_QB]

Probably ought to change the thread title.

 

[bigpern23]

Probably ought to change the thread title.

I don't even know how to do that anymore.

 

[Vombatus]

There's some link called thread tools that you as the OP should see in the upper right. You might have to go back to the first page and the first post to see that Thread Tools link. Click on that, and you will see the option to edit the thread title. I've been drinking, but I think that's how it works.

 

[User 11148]

You could outsource it to me ... I'll take care of it for $375 a pop (half off the going rate) ...

 

[bigpern23]

There's some link called thread tools that you as the OP should see in the upper right. You might have to go back to the first page and the first post to see that Thread Tools link. Click on that, and you will see the option to edit the thread title. I've been drinking, but I think that's how it works.

That worked.