Pharmaceutical company CEO Martin Shkreli first became notorious after he jacked up the price of a life-saving pill by more than $700 a pop earlier this year. Now, the 32-year-old entrepreneur has been arrested for securities fraud in a case tied to a separate pharma company that he used to run. Update: Shkreli has resigned as CEO of Turing Pharmaceuticals, the company announced Friday.
Tracing Shkreli’s rise to notoriety— and the many people he angered along the way — is a complex path. Here’s everything you need to know.
Why was Shkreli arrested?
U.S. prosecutors and the Securities and Exchange Commission are accusing Shkreli of misappropriating more than $1 million in investors’ money from his two hedge funds, MSMB Capital Management and MSMB Healthcare, according to an SEC filing. He is also accused of using stock in his biotechnology company Retrophin Inc., which he started in 2011, to pay off debts related to other business deals.
Why do people hate him so much?
In August, the Shkreli-run company Turing Pharmaceuticals bought an older drug called Daraprim. It’s used to treat a parasitic infection that can be deadly for people with HIV or cancer. The company raised the price of the drug from $13.50 per tablet to $750. Many observers saw the move as price-gouging, which Shkreli denied. “This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” he said at the time.
Following a massive backlash, Shkreli said he would lower the price of the drug. But then he changed his mind. After Democratic presidential candidate Hillary Clinton called on Shkreli to lower the price of the drug, he responded with a flippant “lol.”
More recently, Shkreli said at a Forbes conference this month that he would have raised the price higher if given the chance. “My shareholders expect me to make the most profit,” he said. “That’s the ugly, dirty truth.”
How did Shkreli get so rich?
Shkreli was raised in working-class Brooklyn, the son of Albanian and Croatian immigrants who worked as janitors, according to Bloomberg. He dropped out of high school and cut his teeth as an intern on Jim Cramer’s CNBC show Mad Money. Later, he started a pair of hedge funds, Elea Capital and MSMB Capital.
Those endeavors didn’t make him much money, he told the New York Times, but he discovered there was a lot of cash to be made in directly selling pharmaceutical drugs. His pharmaceutical company, Retrophin, sought out old, rarely used drugs and raised their prices—a drug to treat kidney stones, for instance, was raised from $1.50 per pill to $30.
Shkreli was ousted from Retrophin by the company’s board in 2014 and sued on allegations that largely mirror the charges now being brought by federal prosecutors. He then started Turing, the company that sparked a firestorm by boosting the price of Daraprim this fall. He told the Times he had become “very rich” thanks to his Turing stake as well as $100 million he made selling Retrophin stock.
What else should I know about Shkreli?
He’s a really big rap fan. Shkreli spent a reported $2 million in an auction to buy the only copy of the Wu-Tang Clan’s latest album, Once Upon a Time in Shaolin. In a December Bloomberg profile, Shkreli said he hadn’t listened to the album yet, though hardcore Wu-Tang fans are desperate to hear it. He hasn’t indicated that he’ll ever release the closely guarded album to the general population, but he said he would let a celebrity like Taylor Swift listen to it.
Shkreli has also floated the idea of paying the bail for Bobby Shmurda, a Brooklyn-based rapper currently in jail on gun charges. But he says Shmurda would then owe him. He has aspirations to use his wealth to be the next great rap mogul. “Within 10 years, more than half of all rap/hip-hop music will be made exclusively for me. Don’t worry–I will share some of it,” Shkreli tweeted this week.