This Article Contains Explicit Language Because It’s About Martin Shkreli
February 8, 2016
Is there no such thing as bad publicity? Martin Shkreli offers an interesting test case for this theory. He has been described in the media as, “troubled,” “awful,” “putrid,” “reviled,” “infamous,” “smirky,” as well as “the most hated man in America,” a “supervillain,” a “douche,” a “smug jerk,” a “bad guy,” an “asshole,” a “human garbage monster,” and Wu Tang Clan’s Ghostface Killah called him a “shithead.” Shkreli is currently under indictment for securities fraud, and is out of jail on a $5 million bond, because he allegedly operated a company like a ponzi scheme. His stock portfolio has lost $40 million since his arrest. Given all of the trouble Shkreli has accumulated, it might be fitting to wonder whether this maxim about bad publicity is true.
It can be argued that this “pharma bro” has not benefitted from his notoriety, but there may be some people who have. Insurance companies and politicians of a certain stripe have certainly benefitted. The news about Shkreli and Turing Pharmaceutical’s price hike of Daraprim from $13.50 to $750 per pill, has brought drug prices to the forefront of the political discourse. This has provided opportunities for politicians to get on camera, and insurance companies to highlight abusive pricing by drug companies. Kaleefah Sennah of the New Yorker agrees and argues for this optimistic interpretation:
“Shkreli seems intent on proving a point about money and medicine, and you don’t have to agree with his assessment in order to appreciate the service he has done us all. By showing what is legal, he has helped us to think about what we might want to change, and what we might need to learn to live with.”
We might want to change the lack of regulatory oversight by the FDA and Congress, but we are forced to live with high drug prices. This past Thursday, Shkreli appeared before a congressional committee and invoked his 5th Amendment rights, even when questioned about his $2 million purchase of a Wu Tang Clan album. The grandstanding of the committee members was admirable, but there is a legitimate concern about their lack of fluency with the issue of drug prices. Writing for Forbes, Matthew Herper, pointed out this distressing reality:
“Congress, for its part, showed itself to be full of ignorance about how the medical system and pharmaceuticals work. Blake Farenthold (R-TX) didn’t seem to understand that the Food and Drug Administration can’t approve generic drugs without data proving they work the same way in the body as the branded versions. Congressmen stumbled over the complicated relationships between insurers, drug companies and hospitals. They kept focusing, though, on why nobody was making a generic to take away Shkreli’s market share given that Daraprim is a 60-year-old drug.”
As we have recently discussed, the generic market is beset with challenges and many of them are caused by regulatory sclerosis. Considering that congressional action would be the only solution to many of these problems, the clumsy handling of the issue by members of the House oversight committee does not inspire confidence. No one will claim that this is a simple issue, but the absence of depth in understanding the issue is disheartening. Max Nisen of Bloomberg drew this conclusion:
The confusion around drug prices is “the oldest of news for anyone who follows the industry, but apparently novel to Congress. The lack of transparency in the market all but guarantees the sorts of abuses that necessitated the hearing in the first place. The fact that real prices are so opaque makes it difficult to measure cost in the system and to assess value.”
The positive news is that Shkreli, as an example of industry excess, has provided the public with a teachable moment. The bad publicity for him has had a positive impact by shining the spotlight on hyper-aggressive pricing by the pharmaceutical industry. We are all impacted by overpriced drugs. The only variable is to what extent we are insulated from it. Shkreli changed the inert silence surrounding the issue by providing a “punchable” face of high drug costs and creating a compelling narrative.
It is easy to imagine the investigators at the SEC were giddy when the subject of their inquiry became first page news. The motivation to take him down likely matched Turing’s increase of Daraprim’s price. Excluding a transformative visitation by the three ghosts of Christmas, the first paragraph of his obituary is probably written.
The negative attention Turing inspired has likely undone the millions of dollars Big Pharma has invested in marketing and public relations. He is a walking, talking and tweeting nightmare for the drug industry. Turing’s investors and fans of the Wu Tang Clan are the other groups, along with Big Pharma, that have real reason to hate him. Maryland Representative Elijah Cummings called him “the poster boy for greedy drug company executives” and “one of the bad boys of pharma.” He probably loved that, but the pharmaceutical industry probably doesn’t.