Pharmaceutical CEO Martin Shkreli arrested on securities fraud charges

Martin Shkreli

The outspoken pharmaceutical CEO made famous for dramatically increasing a drug used by AIDS patients was arrested early Thursday on securities fraud allegedly connected to a separate firm he started in 2011.
Bloomberg News reported that Martin Shkreli, 32, was arrested in his New York City home. Prosecutors reportedly allege that he illegally took stock from Retrophin Inc. and used it to pay off other, unrelated dealings.
The report notes that Shkreli was later sued by the Retrophin board. Federal prosecutors accuse Shkreli of employing a complicated shell game after his fledging hedge fund lost millions. The arrest had nothing to do with drug pricing, the report said.
The Bloomberg report noted Shkreli’s meteoric rise from being raised by immigrant parents who worked as janitors in Brooklyn. Bloomberg said "Shkreli both epitomizes the American Dream and sullies it."
Public outrage boiled over this fall after news that Turing increased by more than 5,000 percent the price of Daraprim, a drug used to treat a life-threatening infection, jacking it up from $13.50 to $750 per pill.
Daraprim, a 62-year-old drug whose patent expired decades ago, is the only approved treatment for a rare parasitic infection called toxoplasmosis that mainly strikes pregnant women, cancer patients and AIDS patients.
After the outcry in September over Daraprim, Shkreli said the company would reduce the $750-a-pill price. Last month, however, Turing reneged on its pledge. Instead, the company is reducing what it charges hospitals for Daraprim by as much as 50 percent. Most patients' co-payments will be capped at $10 or less a month. But insurance companies will be stuck with the bulk of the tab, potentially driving up future treatment and insurance costs.
The drug price increase prompted an investigation by the Senate Special Committee on Aging on Turing Pharmaceuticals and other companies.
"The Turing and Valeant price spikes have been egregious," Sen. Susan Collins, the Maine Republican who heads the panel, said at a hearing last week.
A spokesman for Turing said the company was declining to comment on the hearing. Turing, with offices in New York City and Switzerland, had said in reference to the Senate panel's investigation that it looked forward "to having an open and honest dialogue about drug pricing."