It takes a special je ne se quois to stand out as the world’s most unpopular pharmaceutical executive. It requires more than simply being the worst-behaved child in the detention room, or having the longest fork in the all-you-can-eat buffet line, or possessing the thickest expense-claims file in the Canadian Senate.
It is no small achievement to lay claim to the title of Ultimate Despised Figure in the one business the public most loves to hate: to gain status as, in the critics’ view, the smelliest varmint in the skunkworks.
What does it mean to be worst of the worst? True to typical CEO form, some of the economy’s most successful leaders are known to rankle. (Look, you can’t please everyone.) Others drive harder and become magnets for hostility. (When you cook an omelet, you need to break a few eggs, friend-o.)
That said, there is nothing—but nothing—to prepare anyone for Martin Shkreli.
Mr. Shkreli is the founder of Turing Pharmaceuticals, although it would be wrong to assume that he follows any previously known tradition of drug company entrepreneurship. After all, Dr. Paul Janssen founded a drug company and became revered. Abe Plough started his company and won respect. No one is ever going to confuse Martin Shkreli with Dr. Janssen or Mr. Plough.
Mr. Shkreli is a Millennial, but hardly the sort found living on a futon in his mom’s garage. At 32 years of age, he has been a Wall Street macher for nearly half his life, having learned the trade of hedge fund management early on from mentors such as Jim Cramer, the famed stock-trader/TV presenter. Turing is already the second Life Sciences company Mr. Shkreli has created in four years, after Retrophin Inc. (More about those two organizations in a moment.)
Where Dr. Janssen made his reputation by creating therapies and Mr. Plough by selling them, such fusty, labour-intensive activities are anathema to Mr. Shkreli. He is the kind of opportunistic businessman who will spot and pursue situations that the traditionalist might be inclined to dismiss.
For example, five years ago, he perfected what we will call the Shkreli Shuffle, a proudly brazen money-making gambit previously uncommon in the annals of Life Sci finance. In this unique procedure, Mr. Shkreli filed statements with the U.S. FDA urging the regulator to reject a new diabetes treatment, and a cancer detection test, apparently for the sole purpose of driving down the share price of the two publicly traded companies tasked with commercializing the wares. His investment house used the lull to short-sell the stocks. This was no service to patients who may have benefited from the timely availability of the products, or to the companies and their investors who suffered financial reverses from the delay. Conversely, Mr. Shkreli and his trusty balance-sheet made out just fine.
No one questions the man’s acumen—although several are investigating his compliance with securities laws. His first company, Retrophin, is suing his subsequent outfit, Turing, alleging trading violations; federal attorneys are reportedly contemplating charges.
Undaunted, Turing made headlines recently after buying the rights to pyrimethamine (Daraprim) from Impax Laboratories. The Rx is a warhorse used since 1952 to treat toxoplasmosis, cancer and AIDS, but Mr. Shkreli aimed to price it like a new biologic, quickly lifting the retail price to US$750 per dose, from US$13.50. Of course, various other drug companies have been quietly raising prices on older medicines for several years, to the accompaniment of muted grumbling from stakeholders. No whispered resentment this time. Nothing about Mr. Shkreli is ever destined to elicit a quiet response.
Patient groups raged at the news. Politicians railed. Chanting protesters encircled the Turing headquarters, equipped with placards. Social media commentators pilloried Mr. Shkreli, who unwisely responded with his own profane Twitter invective. In the process, the entire pharmaceutical and biotech sector was sullied, leading to Turing’s expulsion from the major trade groups, a sharp decline in the benchmark share price index of the entire drugmaking category, and new hearings about pricing, soon to be conducted by the United States Congress.
Pharma has never been a beloved industry among the public, but Mr. Shkreli has found himself tagged as the embodiment of each of his predecessors’ and competitors’ past and current sins. As a parvenu and a Wall Street guy new to the ways of the life sciences environment, he is not at all well positioned to contextualize, and his clumsy efforts to explain things have brought considerable disrepute and discredit to the biopharma industry and all within its orbit. Quoth he: “Dozens of drug companies have done what I’ve done.”
No, Mr. Shkreli. No, they haven’t.
It’s too easy to further demonize this fellow (not least because he physically resembles the actor who played Damien in the 1976 film, “The Omen.”) Thing is, if his flawed understanding, near-complete lack of judgment and unfortunate personality had not lit the fuse, another drug company executive likely would have been cast in the role of cartoon-villain. And when certain business practices relating to supply and pricing are indefensibly crude and ill-considered, it seems convenient to have a prima facie miscreant, a fraternity-brother approximation of J.R. Ewing, to serve in the capacity of human lightning rod.
That may be the logic behind PhRMA’s unprecedented disavowal of Turing, and BIO’s abruptly having tossed the company from its membership roster. More practically, though, they and we must owe a small measure of gratitude to Mr. Shkreli for his foolhardy pricing model, which served to define the outer limits of responsible behaviour by capitalists who make and sell medicine.
By rushing to undertake patently unacceptable actions, he has inadvertently performed a roundabout service to his industry peers, by encouraging each of us to assess and purge our more Shkreli-like impulses, and to come to terms with that unworthy inner voice that sometimes whispers dangerous entreaties. His contribution to our cause is as negative role-model, instructing us to disregard the little Shkreli that might sometimes stir inside the best of us.