Pharma Bro now Prison Bro as Shkreli Sentenced to 7 Years

'Pharma Bro' Martin Shkreli gets 7 years

in securities fraud case

Judge ruled earlier this week that Shkreli would have to forfeit more than $7.3M

The Associated Press 

Martin Shkreli, who became notorious for raising the price of a life-saving drug by 5,000 per cent and trolling critics on the internet with his snarky "Pharma Bro" persona, was given a seven-year prison sentence on Friday for securities fraud.

Martin Shkreli, who became notorious for raising the price of a life-saving drug by 5,000 per cent and trolling critics on the internet with his snarky "Pharma Bro" persona, was given a seven-year prison sentence on Friday for securities fraud. (Seth Wenig/Associated Press)

The smirk wiped off his face, a crying Martin Shkreli was sentenced to seven years in prison for securities fraud Friday in a hard fall for the pharmaceutical-industry bad boy vilified for jacking up the price of a lifesaving drug.

Shkreli, the boyish-looking, 34-year-old entrepreneur dubbed the "Pharma Bro" for his loutish behaviour, was handed his punishment after a hearing in which he and his attorney struggled with limited success to make him a sympathetic figure. His own lawyer confessed to wanting to punch him in the face sometimes.

The defendant hung his head and choked up as he admitted to many mistakes and apologized to the investors he was convicted of defrauding. At one point, a clerk handed him a box of tissues.

"I want the people who came here today to support me to understand one thing: The only person to blame for me being here today is me," he said. "There is no conspiracy to take down Martin Shkreli. I took down Martin Shkreli."

In the end, U.S. District Judge Kiyo Matsumoto gave him a sentence that fell well short of the 15 years prosecutors wanted but was a lot longer than the 18 months his lawyer asked for. He was also fined $75,000 US.

Shkreli was found guilty in August of lying to investors in two failed hedged funds and cheating them out of millions. The case was unrelated to the 2015 furor in which he was accused of price-gouging, but his arrest was seen as rough justice by the many enemies he made with his smug and abrasive behavior online and off.

The judge insisted that the punishment was not about Shkreli's online antics or his raising the cost of the drug. "This case is not about Mr. Shkreli's self-cultivated public persona ... nor his controversial statements about politics or culture," Matsumoto said.

This courtroom sketch shows former pharmaceutical CEO Martin Shkreli, left, seated next to his lawyer Ben Brafman in U.S. federal court in New York on Friday. (Elizabeth Williams via Associated Press)

But she did say his conduct after the verdict made her doubt the sincerity of his remorse. She cited his bragging after the verdict that he would be sentenced to time served. And she quoted one piece of correspondence in which he wrote: "F—- the feds."

The judge ruled earlier that Shkreli would have to forfeit more than $7.3 million in a brokerage account and personal assets, including a one-of-a-kind Wu-Tang Clan album that he boasted of buying for $2 million.

Defense attorney Benjamin Brafman described Shkreli as a misunderstood eccentric who used unconventional means to make his defrauded investors even wealthier. He told the court that he sometimes wants to hug Shkreli and sometimes wants to punch him, but that his outspokenness shouldn't be held against him.

"It's like the kids today who hit send before they really understand what they texted," Brafman said.

Prosecutors rejected that notion.

"Mr. Shkreli is not a child," federal prosecutor Jacquelyn Kasulis said. "He's not a teenager who just needs some mentoring. He is a man who needs to take responsibility for his actions."

Shkreli became the face of pharmaceutical industry evil in 2015 when he increased by 5,000 percent the price of Daraprim, a previously cheap drug used to treat toxoplasmosis, a parasitic infection that can be fatal to people with the AIDS virus or other immune system disorders.

Shkreli seemed to treat the case like a big joke. After his arrest in December 2015, he taunted prosecutors, got kicked off of Twitter for harassing a female journalist, heckled Hillary Clinton from the sidewalk outside her daughter's home, gave speeches with the conservative provocateur Milo Yiannopoulos and spent countless hours livestreaming himself from his apartment.

He also infuriated members of Congress at a Capitol Hill hearing on drug prices when he repeatedly cited his Fifth Amendment right against self-incrimination. Afterward, he tweeted that the lawmakers were "imbeciles."

Last fall, the judge revoked his bail and threw him in jail after he jokingly offered his online followers a $5,000 bounty to anyone who could get a lock of Clinton's hair.

Pride goes before destruction, a haughty spirit before a fall. Prov 16:18.

'Pharma Bro’ Martin Shkreli Guilty of Fraud

© Spencer Platt / AFP

Eccentric former pharmaceutical CEO Martin Shkreli, dubbed “the most hated man in America,” has been convicted of fraud for deceiving investors in a pair of failing hedge funds. His defense team argued that his investors made hefty profits.

A New York jury deliberated for five days before finding Shkreli guilty of three out of eight counts against him. He was found guilty of securities fraud but not of conspiracy to commit securities fraud and conspiracy to commit wire fraud, AP reported.

Prosecutors in the five week trial accused Shkreli of repeatedly misleading investors about what he was doing with their money.

Shkreli, 34, told “lies upon lies,” including claiming he had $40 million in one of his funds at a time when it only had about $300 in the bank, Assistant US Attorney, Alixandra Smith said in closing arguments, reported AP.

Prosecutors said he kept making horrible stock picks which forced him to cook up schemes to recover millions in losses.

The federal trial “exposed Martin Shkreli for who he is really is – a con man who stole millions,” said another prosecutor, Jacquelyn Kasulis.

Shkreli, who comes from an Albanian family in Brooklyn, was arrested in 2015 on charges he looted Retrophin, another drug company he founded, of $11 million in stock and cash to pay back hedge fund investors.

Investors took the witness stand to accuse Shkreli of keeping them in the dark as his scheme unfolded.

Complicating the case however, was testimony from some wealthy financiers in Texas, who conceded that Shkreli’s scheme made them richer, in some cases doubling and even tripling their money on his company’s stock when it went public.

"Who lost anything? Nobody," defense attorney Ben Brafman said in his closing argument.

Some investors had to admit on the witness stand that partnering with Shkreli was "the greatest investment I've ever made," he added.

Shkreli came to national attention after he purchased rights to a life-saving drug, Daraprim, in 2014, where he promptly raised the price from $13.50 to $750 per pill, leading him to be referred to as “the most hated man in America” and “pharma bro.”

He faces as much as 20 years in prison.

FDA Changes Drug Review Rules to Challenge Martin Shkreli-like Medicine Monopolies

© Srdjan Zivulovic / Reuters

The US drug regulator is paving a fast-track for generic remedies to market while also sealing a loophole, used by pharmaceutical executives like Martin Shkreli, to profit from jacked-up prices on exclusive medicines.

The Food and Drug Administration (FDA) is now granting an “expedited review” to generic drugs producers that would compete with brand-named treatments, currently produced by only one manufacturer.

The new rule is going to make an approval process faster for off-patent producers, which potentially means that exclusive drug makers will face increased competition sooner and might be toppled from their monopoly position, largely exploited to hike up prices for life-saving drugs.

According to FDA estimates, the change in prioritization could expedite reviews of as many as 125 generic drug applications, Sandy Walsh, an agency spokeswoman, told Bloomberg.

The FDA’s amendment comes amid the nationwide outrage over price gouging, recently exemplified by Martin Shkreli and the company he formerly owned. Under Shkreli as CEO, Turing Pharmaceuticals raised raised the price of Daraprim, a drug essential for HIV treatment 5,500 percent, from $13.50 to $750 per pill in just over a month last fall.

With the price increase, some patients received $16,000 co-pays for a single prescription, according to Ars Technica.

Daraprim’s price increase scandal was not Shkreli’s first time facing controversy. Having earned himself the title of “most hated man in America”, Shkreli was arrested on for securities fraud in December, which was not related to his raising the price of life-saving pills exponentially, but rather to his time at a hedge fund.

Prosecutors accused him of illegally taking stock from Retrophin, Inc. to pay off his personal debts from unrelated business dealings as a hedge fund manager for MSMB Funds. In 2011, he started Retrophin and acquired old drugs in order to raise their price.

Retrophin sued Shkreli in federal court for $65 million, accusing him of misusing the company’s assets, including its stocks and cash, "to enrich himself, and to pay off claims of MSMB investors (who he had defrauded)," the lawsuit said.

The FDA’s new rule may also thwart business of Valeant Pharmaceuticals, another manufacturer upped its blood pressure treatment’s price over 600 percent last year.

The high blood pressure drug Nitropress’ price shot up 625 percent to $1,346.62 per vial. Isuprel, a heart medicine, went up 820 percent, costing $36,811 for 25 pills. Cuprimine, a rheumatoid arthritis capsule, jumped 2,949 percent in price to $26,189 for 100.

US Pharmaceutical Company Defends 5,000% Price Increase

Daraprim now sells for $750 (£485) a dose despite 

costing $1 to produce

Generic image of pharmaceuticals Thinkstock

From BBC US & Canada

The head of a US pharmaceutical company has defended his company's decision to raise the price of a 62-year-old medication used by Aids patients by over 5,000%.

Turing Pharmaceuticals acquired the rights to Daraprim in August.

CEO Martin Shkreli has said that the company will use the money it makes from sales to research new treatments.

The drug is used treat toxoplasmosis, a parasitic affliction that affects people with compromised immune systems.

After Turning's acquisition, a dose of Daraprim in the US increased from $13.50 (£8.70) to $750.

The pill costs about $1 to produce, but Mr Shkreli, a former hedge fund manager, said that does not include other costs like marketing and distribution.

"We needed to turn a profit on this drug," Mr Shkreli told Bloomberg TV. "The companies before us were just giving it away almost."

On Twitter, Mr Shkreli mocked several users who questioned the company's decision, calling one reporter "a moron".


Turing now joins Alexion, Pfizer and Flynn as soulless dispensers of death. People in countries without pharmacare programs will simply have to stop taking it. The industrialized countries with pharmacare help will find their health care budgets ballooning. Health care budgets are, of course, funded by tax-payers. What this means is that a company like Alexion with only a few thousand customers, can now collect money from every single taxpayer in the industrialized world.

In August, Britain's competition watchdog accused Pfizer and Flynn Pharma of breaching UK and European law by ramping up the cost of an epilepsy drug, given to more than 50,000 British patients, by as much as 2,600 percent.

The Competition and Markets Authority (CMA) said its provisional view was that Pfizer and Flynn Pharma each abused a dominant position by charging "excessive and unfair" prices for phenytoin sodium capsules.

Pfizer and Flynn said they were cooperating fully with the CMA and noted a final decision on any infringement of the law had not yet been made.

The CMA can fine companies up to 10 percent of annual worldwide sales if they are found to have breached competition law.

'Cost is unjustifiable'

The Infectious Diseases Society of America, the HIV Medicine Association and other health care providers wrote an open letter to Turning, urging the company to reconsider.

"This cost is unjustifiable for the medically vulnerable patient population in need of this medication and unsustainable for the health care system," the groups wrote.

Dr Wendy Armstrong of HIV Medicine Association also disputed the need to develop new treatments for toxoplasmosis.

"This is not an infection where we have been looking for more effective drugs," she told Infectious Disease News.

On Wall Street, biotech shares fell sharply on Monday after Democratic presidential candidate Hillary Clinton pledged to take action against firms hiking prices for specialty drugs.

"Price gouging like this in the specialty drug market is outrageous," Mrs Clinton said, citing Daraprim.

There is no indication in this unfortunate article about the patent on Daraprim. One would think that it having been around for 62 years there would be no patent. But how does that make sense for Turing to raise their price ridiculously if there is no patent?

I'm with Hillary, something needs to be done, pharmaceuticals should not be operating on a supply/demand basis because it is governments who have to pay. Those who do should lose their patent rights. 

Supply and demand marketing only works when its participants have some measure of conscience, and some small amount of control over their rampant greed. Big pharma appears to be completely devoid of both. Turing bought the rights to Daraprim for the express purpose of gouging every health care system in the world.