012 – Martin Shkreli, a former pharmaceutical company executive who ordered drastic price increases on a life-saving drug, changing it from its original cost of $13 to $765, has been banned from the industry for life. This month it was ruled that he must pay $64 million for profits he made by buying the patent on this drug and then vastly increasing its price.
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Shkreli was born at Coney Island Hospital in the Brooklyn borough of New York City on March 17, 1983, to Albanian immigrant parents. His parents immigrated to the United States and worked as janitors. At the age of 17 he interned at the Wall Street hedge fund Cramer, Berkowitz and Company and in 2004 received a bachelor’s degree in business administration from Baruch College.
After several years working in the stock market. He founded his first hedge fund, Elea Capital Management, in 2006. The firm closed a year later, after a US$2.3 million lawsuit filed by Lehman Brothers, which went bankrupt before it could collect.
After Elea, he started MSMB Capital Management in 2008. That fund would be his launching pad for founding biotech companies. In 2012, he created Retrophin Pharmaceuticals, a company dedicated to the treatment of rare diseases, and two years later, its shares had appreciated from US$3 to US$20. He then opened Turing Pharmaceuticals – later renamed Vyera Pharmaceuticals – through which he bought Daraprim in 2015.
Daraprim is a drug that helps treat toxoplasmosis in immunosuppressed patients, such as those with HIV. Daraprim’s patent had long expired and there was no generic version on the market.
Shkreli argued that the price increase for Daraprim was justified because the drug is highly specialized. “The proceeds, he noted, will be used to improve the prescription of the 62-year-old drug.“
All the community outcry caused him to lower his own guard, declaring to the media that he was going to lower the price of the drug, but that never happened. However, price increases are not illegal (or even unusual) in the U.S. pharmaceutical industry, so he did not face any charges for this. But what did bring him to the courtroom in 2018 was a 2015 allegation that he committed fraud and looted millions of dollars from two hedge funds he managed, MSMB Capital and MSMB Healthcare.
A judge found him guilty for that and for inflating the value of his company Retrophin’s stock. He should spend 7 years in jail. But by May of last year (2022) he is free before the end of his sentence for fraud.
Shkreli and the cryptoworld
Shkreli claimed that he learned to trade on the decentralized exchange platform Uniswap while in prison. Also that he received unspecified benefits in prison in exchange for advising prison guards about Bitcoin. As soon as he was released the ex-convict claimed he was back on Bumble and Bloomberg Terminal, went on to say that he sees great potential for the use of blockchain and decentralized computing in the pharmaceutical industry, and that he is working on a new software product in that area. He declined to provide further details.
Shkreli seems to have already created a fan base in cryptocurrencies. Its Shkreli Inu token, Shkreli Inu token, was launched on Ethereum. After 24 hours it had been traded on Uniswap worth approx. $1 million, according to Nomics data. Shkreli said today that he has received “half” of the supply of Shkreli Inu, but said he did not create it.
As for his opinion on NFTs and Web3, he said he is interested, but not impressed. He referred to NFT’s generative collections of 10,000 items, such as CryptoPunks and Bored Apes, as “retarded” and said Web3 is just a “buzzword.”
What we can say is that a character like Martin Shkreli will continue to be talked about.
