Shkreli receives jail time
Martin Shkreli, the former CEO of Turing Pharmaceuticals, was sentenced to 7 years in prison on March 9. Skhreli is a Baruch College alumni and a former business editor of The Ticker.
In 2015, Retrophin, a biotechnology firm Shkeli founded in 2011 and then was ousted from in 2014, accused him of creating and taking the company public solely to pay back investors from his failed hedge fund company, MSMB Capital Management. Two years later in August 2017, a jury found Shkreli guilty on three of eight counts of securities fraud in a Brooklyn Federal District Court.
On March 5, Judge Kiyo Matsumoto ruled that Shkreli owes the government $7.36 million in losses directly related to his fraud. On March 9, Matsumoto sentenced Shkreli to seven years in federal prison, three years of probation following his release and a $75,000 fine. He will receive a credit of six months of time served prior to his sentencing. The prosecution had been seeking a 15-year sentence, while his defense team, led by defense lawyer Benjamin Brafman, had argued for a 12-18 month sentence. Brafman though, following the sentencing, appeared pleased with the outcome, "When the guidelines are 25 years and the government is demanding 15 years one would think that a seven year sentence is good," he said. "I thought the sentence should have been less than seven years, but Martin's fine and obviously it could have been a lot worse."
Shkreli earned a degree in business from Baruch in 2004 and worked his first internship at Cramer Berkowitz & Co. before his career began in the financial and pharmaceutical industry. He came under heavy public scrutiny for raising the price of Daraprim, a 65-year-old “specialty” drug used to treat toxoplasmosis, a serious parasitic condition that commonly afflicts individuals with weak immune systems, like those diagnosed with AIDS. Shkreli raised the price of the drug in September 2015 from $13.50 a tablet to $750 overnight, in an attempt to exploit a small marketplace with restricted access and a lack of competition.
Four months after his price increase, Shkreli was subpoenaed to testify before the House Oversight Committee in regard to high drug prices in the United States. During his testimony he pleaded the Fifth Amendment, refusing to answer any questions. During the public’s period of furor, his name was associated with terms such as “morally bankrupt sociopath,” “scumbag” or “the most hated man in America." Shkreli, at first, defiantly responded to the public’s criticism when he tweeted, "And it seems like the media immediately points a finger at me. So I point one back at em, but not the index or pinkie. " Ultimately, he relented and said he would lower the price back to an affordable amount; in 2016, he lowered it to $375 for some hospitals.
However, Shkreli’s decision to raise his drug’s price was only an extension of what other private drug companies had already been doing, including the company which Shkreli bought out, CorePharma, which first acquired the rights to Daraprim in 2010. CorePharma originally raised the price from $1 to $13.50, which made the drug less affordable to private insurers, Medicare recipients and hospitalized patients.