Background: Turing Pharmaceuticals made news moderately recently when it suddenly raised the price on Daraprim, a drug used to treat people with compromised immune systems, from $13.50/pill to $750/pill. And then it made news somewhat more recently when the feds arrested Turin CEO Martin Shkreli on securities fraud (involving shenanigans not involving Daraprim*). And just now it’s making news because Shkreli has just resigned from the company, in probably what will be a futile gesture. And so it goes.
But it didn’t go in 2012. As this article from 2014 points out, Shkreli got called out by the notable right-wing shill** Campaign for Responsibility and Ethics in Washington for playing short-selling games in the industry:
In a July 9, 2012, letter to Preet Bharara, the U.S. attorney in Manhattan, CREW listed obscure companies with names such as Avanir Pharmaceuticals (AVNR), Zalicus (ZLCS), and Mesoblast (MSB:AU) that Shkreli had shorted and publicly debased. In the case of yet another company, now known as Navidea Biopharmaceuticals (NAVB), he’d submitted what’s known as a citizen’s petition to the FDA, asking the agency in June 2011 not to approve a lymph-node mapping agent he claimed hadn’t been tested properly. Navidea’s stock dropped 33 percent in a month, to $3.29 on July 1, 2011. “This evidence suggests a pattern of suspicious behavior in the trading of biotech stocks that warrants a thorough investigation,” CREW told Bharara.
The Justice Department and the SEC apparently disagreed. There’s no evidence that either launched a formal probe, and spokesmen for both agencies declined comment.
Why not? Probably because Martin Shkreli is a product of our current system, not an aberration from it. Forbes’ The Apothecary walked us through the problem back in September: to summarize, the reason why we’re seeing the general increase in drug prices that Shkreli attempted to take advantage of is because not as many new drugs are making it to market these days. There’s a steadily increasing average FDA approval time, which cuts down on competition, which almost guarantees increased prices from an effective monopoly.
Where Shkreli and Turing Pharmaceutical made their mistake was in treating Daraprim (which is pretty much a public domain drug at this point: the patent ran out before I was born) as if it were a new drug. This allowed other companies in the pharmaceutical industry (who were up to their necks in their own crony capitalism scams with the Obama administration, not that it helped them) to usefully distance themselves from the guy. And thus hopefully keep their own shenanigans out of the public eye.
And, again, so it goes.
(Image via Shutterstock)
PS: No, I haven’t gone all progressive on people. The Left thinks that all of this is due to there not being enough regulation of the pharmaceutical industry, because clearly the people who brought us Obamacare, ISIS, and the Libyan Civil War can be trusted to run anything more complicated than a lemonade stand***. I think that this is all due to the extremely unhealthy relationship that has arisen between the current administration and selected industries; I’d love to discuss it more thoroughly, but I don’t in fact speak Italian.
*Seriously, this is not involving Daraprim. The guy was allegedly running a Ponzi scheme where he was bilking current investors to pay off old ones. Sound familiar?
***Also sarcasm. I wouldn’t drink that lemonade on a bet.