What if Shkrelli's arrest is actually just part of a Bill Murray-organized caper to steal back that Wu Tang album?— Ben Casselman (@bencasselman) December 17, 2015
HISTORY ON SHKRELLI
It appears that the arrest is on charges related prior securities fraud, not his current venture; what initially brought him press (the pricing of Daraprim) is not related to his current legal issue. I have written about Shkreli's Daraprim pricing once before on this blog, specifically pointing out... well this:
The CEO's rhetoric tells us that he is leveraging higher pricing against the financial-insurance system, and effectively betting on the ability to extract large mid-term profits from it. The insurance system, as it exists, enables this type of cost increase by giving *ordinary* people *extraordinary* ability to pay for effectively one-time services.Actually, I pointed out three things in my blog:
- While it's fathomable that the drug was under-priced to the point of not being profitable, the price shock he used was likely exorbitant.
- His claims of using pricing to create capital for future research is likely just "CEO BS."
- He's just leveraging against incentives in the current insurance system.
Shkreli had alluded to using the insurance system to leverage his profits, but never came out and said it. Yesterday, he did. Starting with this nice sounding tweet, no one ever pays more than $10 out of pocket!
Thanks Josh. We'll ensure no one is denied our drug or pays >$10 out-of-pocket. It is a fair deal for more research. https://t.co/cu2zatxHtO— Martin Shkreli (@MartinShkreli) December 16, 2015
And he continues to say nice sounding things like this:
But the best tweet of the day from Shkreli (where he actually admitted to the concept of my prior blog post) was this one:I like to stir the pot, but I would never, ever price a drug beyond a sick person's reach.— Martin Shkreli (@MartinShkreli) December 16, 2015
If you can afford our drugs with insurance, great. If you can't, you can have it for free. Our system works.— Martin Shkreli (@MartinShkreli) December 16, 2015
Effectively Shkreli is outright saying here, let me charge the insurance system huge prices, or I'll just give it away for free. The full details of why this happens relates to diffuse impacts of insurance system, this being a low-use drug, and what happens when you artificially give people more "ability to pay" for something. I detailed that out in more detail in my prior post.