Posted by Justin Cohen.
Martin Shkreli a pharmaceutical CEO raised the price of an AIDS drug that saves people’s lives. In December of 2015, the prices of the drug, called Daraprim, was raised by five thousand percent, one bottle originally being $13.50 to $750.
The ethical problem in this situation was by making the drug so expensive that only a select few could afford it, hurts the people the company is allegedly trying to help. The company made this drug not only to make a profit, but also to help patients with AIDS. Shkreli states “Because the drug was unprofitable at the former price, so any company selling it would be losing money. And at this price it’s a reasonable profit. Not excessive at all” –Shkreli.
This drug has been selling for sixty-two years. I think the new price of this drug is very excessive. The company has been living off the past profit for years. The price could have been raised, but 5,000 percent is very excessive.
Companies making drugs to help save lives should be more worried about the people they are serving than making the most profit they can. This brings up the ethical questions, was making money more important to Shkreli than saving lives? What did he think was going to happen to the patients who now could not afford the drug? Why did Shkreli put himself before thousands of other people? Lastly, what are the ethical obligations of a company to aid the public vs. making a profit?
Justin is a sports management major at the Stillman School of Business, Seton Hall University, Class of 2018.
Posted by Jose L. Diaz.
Imagine having a potential life-ending disease or illness that you depend on medication for to survive. Money is tight, and most of your savings goes towards purchasing the medication in order to survive. Suddenly, just overnight, the price of this drug not only increases, but it increases by 5000%. While it sounds absolutely absurd, this actually happened when Turing Pharmaceuticals, a startup company being run by a former hedge fund manager, increased the price of their drug called Daraprim, from $13.50 a tablet to $750 a tablet overnight. That is not $750 a prescription–it is $750 per tablet. This brought the annual cost of treatment for some patients to over a hundred thousand dollars.
Martin Shkreli, CEO of Turing Pharmaceuticals, claims that the drug is so rarely used that the price increase would not have a significant effect on the health system. He claims that the money earned from the price increase would go towards developing better treatments for toxoplasmosis, the disease that is treated by Daraprim. However, the price increase will make it almost impossible for private insurers like Medicare and patients in hospitals to attain. The fact that the drug is so expensive and hard to attain now, it makes it harder for other companies to make samples of the drug and replicate it. Overall, the drug is the leading treatment for the life-threatening parasitic infection toxoplasmosis. The increase in price seems to be an only profit-driven choice.
Jose is finance and accounting major at the Stillman School of Business, Seton Hall University.
Posted by Katie Kim.
On Thursday, Martin Shkreli, a 32 year-old pharmaceutical executive, was arrested by the federal authorities on securities and wire-fraud charges stemming from an alleged Ponzi scheme he ran as a hedge-fund manager. What the young executive was doing was taking out loans from investors to start a new pharmaceutical company and using that money to pay off his debt from his hedge-fund. Martin Shkreli committed “fraud in nearly every aspect of hedge-fund investments and in connection with his stewardship of a public company,” said the director of enforcement at the Securities and Exchange Commission, Andrew J. Ceresney.
Shkreli was already notorious for price-gouging during his time at Turning Pharmaceuticals. His idea was to acquire decades old drugs and raise the price of it to $750 from $13.50 per pill. The current charges are not related to Shkreli’s work as chief executive of Turing Pharmaceuticals.
The federal authorities say that Shkreli was running three schemes that had connections to one another, he defrauded investors and used stock and cash from an unrelated pharmaceutical company to cover up the money he lost. The Brooklyn US attorney filed a seven-count criminal indictment and the Securities and Exchange Commission filed a related civil complaint on alleged securities fraud against Shkreli. Federal officials painted Mr. Shkreli’s business dealings as “a securities fraud trifecta of lies, deceit and greed.”
Shkreli was released on a $5 million bail, secured by a bank account and his father and brother. The authorities also arrested Evan L. Greebel who served as an outside counsel to Retrophin, the company Shkreli previously worked for. Shkreli treated Retrophin like his “personal piggy bank” where he used $11 million to pay back shareholders of MSMB funds.
Katie is an accounting/finance major at the Stillman School of Business, Seton Hall University, Class of 2018.