There was once a man in Wall Street. A man who was not born in the suburbs of the Midwest, nor the rich coastal cities of the States, but the lower middle class of urban NYC. A man who built his fortune on his own back, defying class movement trends. A man who put down stocks and picked up pharmaceutical development so he could help the world fight disease at affordable prices. A man who decided to challenge the status quo on behalf of the little guy and was brutally ostracized for it. This man was Martin Shkreli.
Examining the story of Martin Shkreli is a bit like examining a mythic tale developed during America’s romantic peak. He was born the son of two European immigrants (Albania and Croatia), and accepted into the high-end Hunter College High School, a secondary school for intellectually gifted individuals in the Upper East Side of Manhattan. Hunter College boasts that they teach the “top 0.25% of students in the area, based off test results.” Earning enough credits to graduate early, Shkreli opted out of high school and started an internship at Cramer hedge fund.
His prodigious, cultivated intelligence would go on to serve him well as he scaled the ranks of Wall Street. Six years after he started working at Cramer, Shkreli said he “decided to leave while [he] was up 7 million.” His story after that is a matter largely of speculation. Sources close to him have revealed various companies and funds that he has started, grown, and sold. In 2016 Shkreli was charged with securities fraud due to the fraudulent nature of one of his many hedge funds. However, the important story, that applies to you and me, revolves not around one of his hedge funds but around one of his more philanthropic endeavors; Turing Pharmaceuticals.
Turing Pharmaceuticals was Shkreli’s first challenge to the status quo. In the mega-billion industry of pharmaceuticals, start-ups are not meant to succeed. New companies are pressured into being bought out, or are run into the ground by the bigger pharmaceutical giants. Yet Shkreli’s experience inside the belly of the beast ended up being quite useful in squaring off against multi-billion dollar behemoths. Against all odds, the company continued to prosper, rapidly growing on the path to becoming a behemoth itself. That was when Shkreli made a controversial decision: the purchase of a small medication called Daraprim.
Daraprim is a medication primarily used by victims of HIV/AIDS. For the average, healthy immune system a majority of parasites in food and drink do not pose a threat, they are mostly eradicated by the strong health measures imposed by the FDA, and the weakened parasites that end up on the plates of Americans are usually easily handled by the digestive system and the immune system. However, the weakened immune system that accompanies HIV/AIDS leaves many people susceptible to many waterborne parasites that can exist in food sourced from Africa or South America.
It was this specialized drug that Turing Pharmaceuticals decided to purchase when its patent was about to expire. At the time of purchase, the drug was being sold at a rate of $13.50 per pill. After the purchase, the cost of production ended up rising, yet the price of the drug was set at a constant rate: $13.50/pill. Shkreli had to make a choice: raise the price of the drug or sell to his competitors who wouldn’t hesitate to ‘price-gouge’ it through the roof. Faced with such an intimidating problem, he had to clear his head.
The solution that Shkreli brought to Turing was nothing short of ingenious, in his mind. Turing would drastically increase the price for large corporations exclusively, making it affordable for Turing to continue featuring it and making it slightly more affordable for the everyday Joe. There are regulatory bodies that mandate corporations such as Walmart to have minimum stocks of certain medications, some of which included Daraprim on their list. Therefore, revenue instantly increased as corporations restocked their medications. At the end of the day, the profits from corporate orders outweighed the losses from the day to day sales from pharmacies. The price hike affected the corporations, but the everyday Joe was still buying the medication for $13.50/pill.
However, the story that mainstream news outlets broke was quite different. Across the nation, millions of Americans heard about a millionaire CEO who raised the price of a drug from $13.50/pill to $756/pill. Because most people were not made aware of the exclusive nature of the price raise, they believed that it was a disgusting misuse of power that took advantage of the poor and those with HIV/AIDS.
It is true that Shkreli has been caught doing some truly terrible things. Just last year, he was found guilty on 2 charges of securities fraud. He has a history of being brash and rude on social media, going as far as to harass those with differing opinions. Just this month he has come under fire for offering $5,000 for a strand of Hillary Clinton’s hair. On the spectrum of good and evil, he has repeatedly ventured to one particular side.
However, Shkreli’s actions with Turing Pharmaceuticals were not a nefarious plot to expand his own wealth. These were humane considerations made by a man who repeatedly showed that he was incapable of such empathy. Yet the defamation campaign that ensued due to a poorly informed public, was able to demonize a man on the bravest, kindest action he ever showed.