Martin Shkreli, the drug company CEO who became infamous for increasing the price of a generic lifesaving drug from $13.50 to $750 per pill, has been arrested for securities fraud, Bloomberg Businessweek is reporting.
Shkreli is accused of taking stock from a biotech company he founded and was later pushed out of, Retrophin, in order to pay off debts from another one of his businesses, a hedge fund that lost more than $7 million in 2011. Retrophin made similar allegations in a $65 million lawsuit against Shkreli filed in August.
The arrest is the third time in four months that Shkreli, whom the BBC has called "the most hated man in America," has made headlines.
The Shkreli saga includes prescription drug prices and the Wu-Tang Clan
Shkreli came to national prominence in September, when the New York Times reported Shkreli's company, Turing Pharmaceuticals, had bought Daraprim, a drug used to treat toxoplasmosis, a parasitic infection, as well as malaria. Daraprim was an old but effective, relatively cheap drug: It cost $13.50 per pill.
Shkreli increased the price more than 55 times over, essentially because he could — he said he did it to maximize profits and to develop other drugs. The price increase, and Shkreli's unrepentant attitude about it, led to nationwide outrage, and shined a light on pharmaceutical companies' practices of dramatically increasing the prices of cheaper generic drugs.
Under pressure, Shkreli promised in November that Turing would offer hospitals a 50 percent discount on Daraprim, meaning the price will have increased 27 times over, from $13.50 to $375 per pill.
Then on December 9, Bloomberg Businessweek reported that Shkreli was the purchaser of Once Upon a Time in Shaolin, the Wu-Tang Clan's new album. Only one copy was ever produced — stored in a hand-carved box with lyrics written on parchment and bound in leather — and it was auctioned off to the highest bidder, who has the right to do whatever he wants with it.
The winner was Shkreli, who paid millions for the privilege.
A portion of the "contract" that circulated on the internet which appeared to provide that the group could steal back its album as part of a "heist and/or caper" with Bill Murray was, sadly, a joke taken too seriously. But it seemed to make perfect sense in a year when Shkreli embraced the infamy of being a comic-book villain.
- The Daraprim price hike shows what's wrong with drug pricing in America.
- It's not just Daraprim — the New York Times reports Shkreli is also going to increase the price of another drug, which treats the tropical disease Chagas and costs $50 to $100 in Latin America. Shkreli plans to charge up to $100,000.
- The story of how Shkreli bought Once Upon a Time in Shaolin shows how the music business is changing.