It was on the 9th day of March 2018 that the final justice took its toll in the controversial securities fraud charges against the former head of Turing Pharmaceuticals, Martin Shkreli – a case that started since December 2015. The famous 'Pharma Bro' eventually got seven (7) years sentence in federal prison for being guilty of two count charges of securities fraud and a single count of conspiracy to commit wire fraud, delivered by Judge Kiyo Matsumoto in August 2017.
Prosecutors believe that Shkreli deserved up to 15 years in prison for manipulating wealthy investors. But his defense lawyer, Benjamin Brafman thinks he deserved a maximum sentence of 18 months since the investor's funds were returned, arguing that Shkreli was “a misunderstood eccentric who used unconventional means to make those same investors even wealthier.”
Shkreli gained an unsavory reputation in 2015 for impenitently hiking the price of a life-saving drug, Daraprim by 5,000%, shortly after his startup Turing pharmaceuticals acquired the commercial license to the previously cheap anti-parasitic drug used by HIV and cancer patients.
Many famous leaders, including Hillary Clinton, tried cajoling Shkreli into shunning the steep price of Daraprim after a few protests by AIDS activists in front of Turing’s office in the New York. But he rather threatened to increase the price further, with claims it’s a bid to force the production of a more efficient and cheaper replacement for Daraprim by competitors. After this move, Shkreli was dubbed the ‘Pharma Bro,’ BBC recognized him as the “most hated man in the US,” and Donald Trump referred to him as a “spoiled brat.”
This made it easier to believe that the 7 years imprisonment sentence of a 34-year old scientist with so much potential is indirectly related to his notoriety gained from extortionate drug price. But it’s not! Matsumoto assured the general public that her judgment has nothing to do with his public reputation but on the conduct, he was found guilty of. ”I want to reiterate something that I've said since the beginning — this trial is not about his public persona, nor about his actions or statements about pricing of pharmaceuticals," Matsumoto said.
In February 2017, the most inflated drug price was announced by Marathon Pharmaceuticals – a 6,000% price increase of Deflazacort. In the same manner, Avondale Pharmaceuticals increased the price of Niacor by 800% in December 2017, shortly after purchasing Upsher Smith, and Valeant Pharmaceuticals just joined the price hike wagon after announcing a 300% and 700% price increase for its two crucial heart medications.
There is no doubt about the adverse manifestation of price gouging of vital drugs in our society. A lot of attention has been raised recently to motivate the government into finding solutions like adopting legislative rules that should curb extortionate drug prices. Could this be a good idea?
Between 1986 and 2004, the European Union had a watchdog which ensured that drug prices remain fair to the public. But this rule didn’t motivate innovation in the European Pharmaceutical industry since investors prefer to throw their funds into more lucrative deals.
A report from Milken Institute on the global biochemical industry in 2011 indicates that the U.S. would have produced about “117 fewer new drugs for the world” if they had embarked on scrutinizing drug prices like Europe within this period. In that case, accepting free market in the pharmaceutical industry is the most lucrative lifeline to promote innovations for mankind sustainability, until date.