A federal jury in Brooklyn, N.Y., has convicted former pharmaceutical executive and “pharma bro” Martin Shkreli of securities fraud.
He was found guilty Friday on three counts — two counts of securities fraud and one count of conspiracy to commit securities fraud — out of a total of eight counts. Shkreli is best known for increasing the price of a life-saving drug for people with AIDS by 5,000 percent, from $13.50 to $750 per pill, when he was head of Turing Pharmaceuticals.
Shkreli has not been sentenced and faces up to 20 years in prison. After the verdict, Shkreli said he was “delighted with the verdict. This was a witch hunt of epic proportions, maybe they found a couple of broom sticks, but I was acquitted of the most serious counts.”
OUR FREE OPINION
We think the jury got it mainly right in this case—a few more guilty verdicts would have been just fine with us. Hopefully, Shkreli’s case will inspire other hedge fund operators, and financial advisors, etc., to stop cheating investors. Many Americans are justifiably backing away from these type of shaky investments.
I have heard for years that the idea in the marketplace is to buy low and sell high. You don’t want to lose money; the game is to get rich. Find a demand and fulfill it. We are in America; opportunities are all around us. It is even better when you are the only show in town because you can shorten the supply and increase the price. The key is the demand. Drug dealers know this all too well—get them hooked, and spike the cost. Many so-called legitimate companies operate on the same plane as illegal drug dealers—the economics are the same, it’s just that in the case of street drugs, the product is illegal.
The New York Times reported that a drug company called Turning Pharmaceuticals, founded by Martin Shkreli, a former Albanian hedge fund manager, purchased a 62-year-old drug called Daraprim. Although this drug had been around for a long time, the Times says it is considered “the standard of care for treating a life-threatening parasitic infection.”
The drug was helping a lot of people and was available for about $13.50 a tablet. That was until the Turning company got control of it—they raised the price to around $750 a tablet. Get the picture?—the Demand is still there—only show in town—raise the price by several thousand percentage points! Why not, it appears to be legal. If people are sick, they will pay. According to FierceBiotech, this is not Shkreli’s first rodeo when it comes to such wonderful drug transactions. Can you blame the man though? Founders and CEO’s have to protect their shareholders: They run a for-profit business. Other companies are doing the same thing. The added revenue might be used towards the development of new drugs; the cost of research and development for new drugs can be astronomical—FDA approval does not come cheap. Better to focus on older and approved drugs that are off the patent clock.
I remember my grandpa used to bitch about the price of aspirin in the hospital—a tablet cost $1.00 there, and 1 cent at the local drug store when purchased in quantities of 50. That didn’t seem fair to grandpa. I don’t have to wonder what he would have thought of the $750 tablets; it would have upset him. That is if he had the time to think about such matters—he was usually working in his small farm field, laboring dust to dawn—making an honest dollar—something these fast-talking money managers know nothing about.