Martin Shkreli and The Case For Whistleblower Protection
Well far be it for me to 1. Pile on 2. Criticize a person for using the 5th Amendment legally and 3. Quote from a newspaper where I happen to know people who work, but this situation a little hard to resist.
Martin Shkreli is the man and he’s just had quite a day. Apparently 24 hours after he faced fraud charges in federal court in Brooklyn, he flew to Washington and both refused to talk to Congress and then went out of his way to insult it.
Okay, you don’t remember this guy? Well, Shkreli is 32 years old and made money in the hedge fund game and was apparently just another Wall Street fast player until he and his company Turing Pharmaceuticals raised the price of a drug by more than 5,000% or from $13.50 to $750 a pill. The drug is called Daraprim and, of course, people who need it don’t have a lot of treatment options according to the Guardian:
- “…it is the only government-approved treatment for the rare infection toxoplasmosis, which can be fatal for some AIDS and cancer patients and endangers babies in-utero.”
Okay, so basically you need this particular drug to survive and protect the baby, but suddenly it goes from $13.50 to $750 a pill (don’t drop the pill) because our young hero bought the company and now wants to make some serious money on it.
Shkreli did nothing to develop the drug or discover that it could treat any condition. He did discover how to raise its price while it was the only treatment in production for this condition.
So, rarely does Congress get a target this easy to hit. They went after Shkreli and he obliged apparently by taking the 5th, smirking while being sworn in and then following that up with the following tweet:
Hard to accept that these imbeciles represent the people in our government.
— Martin Shkreli (@MartinShkreli) February 4, 2016
A guy like this insulting Congress could do wonders for legislators’ reputations.
All this of course is the easy part. You have to wonder why Congress can’t write a law of some kind or CMS a regulation, that says when a drug is no longer proprietary you have to sell it for something less than a 5,000% mark up. I mean we are all for free enterprise, but what is going on here is not free enterprise in the normal sense. The people using this drug really don’t have a lot of options. They have a gun to their heads. When Medicare and Medicaid pay for it, the people with the gun to their heads to pay is us.
Shkreli, flamboyant and silly as he may be, is just the beginning of the problem. The major drug companies look at the dollars he made from Daraprim so far as small change. They are probably happy to have him out there attracting the attention while the big money keeps rolling in to their coffers. A full-scale understanding of how drugs prices are set in the “marketplace” at this point is beyond the understanding of mortal people. Of course, one has to concede the major drug companies do at least develop drugs which can and do cure people. Shkreli speculated on one.
But at least this saga points out that the whole thing needs much closer scrutiny. Certainly strengthening whistleblower protections helps, in the sense that we have much more of a chance to learn about illegal activity. Still we have a system somebody needs to look at as well.
Shkreli went too far even for Congress and other Big Pharma companies, but he had to raise his prices 5,000% on a drug that was absolutely necessary for some people to use or die and for which he had done no research and no development – nothing but invest, to get caught.
Makes you wonder what else is going on that is not in the spotlight today.