The antihero of biotech knows how to attract a spotlight
Name: Martin Shkreli
Title: Former CEO of Turing Pharmaceuticals
Under investigation by the feds, Martin Shkreli jacked up the price of one old drug while at Retrophin ($RTRX) by 2000%, then got kicked out. But that didn't get all that much attention or notoriety. The mob came calling, though, when he started another biotech called Turing and did himself one better by increasing the price of another old drug--Daraprim--more than 5000%.
After years of simmering public anger over drug prices, he instantly became the poster child for drug price reform. Hillary Rodham Clinton unleashed a Tweet in response about roping in drug prices, and the resulting tempest toppled stock prices for the industry. You can still see the wreckage in the past months of market turmoil.
Influence, of course, isn't just a positive. A small figure magnified to a colossal size can provide a single visceral event that solidifies attention on a key weakness for the industry. And Shkreli has played the role to the hilt, even studying various smirks to try out on a congressional group as he cited his constitutional rights to stay uncharacteristically silent.
Lawmakers had a field day with the appearance, as TV news carefully captured every roll of the eye.
"You have a spotlight and you have a platform," said Representative Elijah Cummings. "You could use that attention to come clean, to right your wrongs and to become one of the most effective patients' advocates in the country and one that can make a big difference in so many people's lives."
The public scolding got exactly the opposite reaction, of course, as Shkreli mocked and taunted Congress on Twitter minutes after his departure. He is the past master of public self-destruction, who can blame only himself for making himself a high-profile target for public prosecutors.
Shkreli did get one substantive response from Congress. He got indicted for allegedly running the equivalent of a Ponzi scheme at his defunct hedge fund--though no one can touch him for price gouging.
And therein lies the rub of his influence. Once price gouging became the issue, then Valeant ($VRX) was drawn into the legislative vortex. And uncomfortably on the edge of the light you'll find just about every major player in pharma, all regularly increasing the prices of their old drugs. Maybe not as spectacularly, but certainly for far more profit than Shkreli ever dreamed of.
Shkreli unwittingly became a pawn of the healthcare reform movement, a perfect target for the long-expected day when Congress, a dysfunctional body for more than a decade, finds common ground on a hot consumer topic.
It's up to the industry now to define what real innovation is, and why it deserves the kind of big prices that cause so much anger. The industry also has to get busy on innovating on its pricing practices and get ready for a day when far more transparency shines a bright light on real costs.
And they can thank Martin Shkreli for that.
-- John Carroll (email | Twitter)
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