In Defense of Martin Shkreli

Martin Shkreli during his fraud trial last year / Courtesy: Amr Alfiky of Reuters via

Martin Shkreli (b. 1983) whilst owning Turing Pharmaceuticals infamously obtained and increased the price of Darapim. The BBC reports,

“Developed in the 1950s, the drug is the best treatment for a relatively rare parasitic infection called toxoplasmosis. People with weakened immune systems, such as Aids patients, have come to rely on the drug, which until recently cost about $13.50 (£8.80) a dose. But Mr Shkreli announced he was raising the price to $750 a pill. The more than 5,000% increase and his brash defence of the decision has made him a pariah among patients-rights groups, politicians and hundreds of Twitter users.”

As of yesterday, Shkreli has been sentenced to serve seven years for fraud. Notably, his conviction and subsequent sentencing had nothing to do with his egregious price increase of an essential medication. Rather, The New York Times reported that,

“Mr. Shkreli was accused of securities and wire fraud related to two hedge funds he ran, MSMB Capital and MSMB Healthcare. Prosecutors charged he illegally used a pharmaceutical company he founded, Retrophin, to repay defrauded MSMB investors. And they said he secretly controlled a huge number of Retrophin shares.”

Regardless, Shkreli and I now have something in common: we are both convicts and will have served time in prison. As I am both a prison abolitionist and social critic, Shkreli, however distasteful his actions may have been, is now within my purview of care. This article is not an attempt to get into the intricacies of the case that ultimately led to his conviction, nor is this an attempt at exonerating his behavior. However, my abolitionist main thesis remains: no one is in prison for what they have done, but because of who they are. In fact, Shkreli is not alone, and by far not near the wealthiest within the Byzantine American Health Care Industrial Complex, in extorting the public for essential medical necessities. Additionally, in the context of the overall industry, he’s a relatively small player. As an anti-capitalist Leftist, I am appalled by the idea that medicine isn’t a public good, and I also think Shkreli is simply a scapegoat, thrown under the bus, in order to demonstrate that the ostensibly virtuous multi-millionaires and billionaires are born from a fair system. Shkreli’s conviction does not indicate parametric application of the Law, but rather a type of “selective parametric application.” This is similar to the Moscow Show Trials. As with these Stalinist show trials, some members of a corrupt, bloated Party bureaucracy, many of whom had blood on their hands, were subjected to punishment; however, they were not subjected to punishment for failing to serve the Party, but often because they exemplified Leninist-Marxist ideals too much. Capitalism, like Stalinism, sometimes need to eat its own high-level functionaries.

Shkreli is sort of an elite interloper, the BBC reports, “Martin Shkreli, the son of Albanian and Croatian immigrants, grew up in a working-class community in Brooklyn, New York. He skipped several grades in school and received a degree in business from New York’s Baruch College in 2004.” I can certainly identify with aspects of his life. I too come from a working-class background, and I skipped several grades and attended my first year of college at the age of 16. Psychologically and geographically we differed, I went into union organizing and he went to Wall Street. However, when I was much younger, around 12, I recall dreaming of being a Wall Street stockbroker. In fact, that was what I wanted to be “when I grew up.” Laying in my small bed, in a ramshackle, dilapidated house in Wilderville, Oregon, I would dream of having a massive office at the top of a skyscraper (a piece of architecture I had only seen on television). These Middle School dreams later transmuted into anti-war activism, and a strong left-ward turn in High School.

As for Shkreli, he,

“Was physically abused by both of his Albanian immigrant parents and witnessed domestic abuse in his home, according to a submission from a consultant hired by his lawyers that was reviewed by The New York Times. He suffered panic attacks. He funneled his energy into numbers: By the time he was 6, one of his sisters wrote, he calculated square roots and knew the periodic table.

At school, he was ‘ashamed of his own upbringing,’ a friend, Franky Guttman, wrote. After Mr. Shkreli landed an internship at a Wall Street firm in high school, Mr. Guttman recalled being struck by how his friend could watch millions of dollars being traded, yet often arrive at school without lunch money.” (NYT, 9 March)

An impoverished childhood in a socially and economically stratified America can lead to all sorts of psycho-social developmental problems. The urge to succeed, to climb to ‘the top’ and to enact all of this theatrically permeates the national psyche. Shkreli is as American as Baseball and apple pie. He is a product of structures that predate him and that will continue long after his conviction. Psychoanalyzing Shkreli is a community affair, and by community I mean those who truck in the same type of vulture capitalism. The problem with this enfant terrible of American capitalism is that he said, acted and behaved forthrightly, whereas the usually more furtive elites creep about boardrooms, haunting and pillaging the wealth of the world quietly and discretely. They have class. Shkreli had crass, lacking the delicacy and discrimination to be an adequate member of the respectable haute bourgeoisie.

According The New York Times, Shkreli’s net worth stands at $27.2 million. And even after bidding adieu to Turing Pharmaceuticals, the drug that “went from $13.50 a pill to $750 a pill in the summer of 2015 [… as of 2017 still costs] $750. There is still no generic version.”

The Washington Post notes,

“The fact that Daraprim’s price never budged, despite the furor it set off, underscores a hard truth about drug prices. Anger and concern flare up periodically — when drug prices increase, a new drug launches with an astounding price or patients have trouble getting access to a medicine because of cost.

Politicians may make angry speeches. Stories about people who can’t access their drugs will almost certainly show up in the media. But ‘drug prices’ is a more complicated topic than most people appreciate, and the solutions are wonky and complicated compared to the simple project of getting furious about the problem. Attention tends to drift elsewhere.

Shkreli helped with that, as he live-streamed his life, bought a one-of-a-kind Wu-Tang Clan album and called Congress ‘imbeciles’ on Twitter after refusing to answer their questions.

Here’s the thing about Daraprim: The size of the price increase and the brazen attitude of Shkreli were both unusual, but the underlying dynamics were not. The pharmaceuticals industry has taken great lengths to distinguish itself from Shkreli and his bad tactics, pointing out that companies that invent drugs are different from those that just jack up the prices of old ones.”

Earlier reporting on the increase of Daraprim noted,

Turing’s price increase is not an isolated example. While most of the attention on pharmaceutical prices has been on new drugs for diseases like cancer, hepatitis C and high cholesterol, there is also growing concern about huge price increases on older drugs, some of them generic, that have long been mainstays of treatment.

Although some price increases have been caused by shortages, others have resulted from a business strategy of buying old neglected drugs and turning them into high-priced “specialty drugs.”

Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis, was just increased in price to $10,800 for 30 pills from $500 after its acquisition by Rodelis Therapeutics. Scott Spencer, general manager of Rodelis, said the company needed to invest to make sure the supply of the drug remained reliable. He said the company provided the drug free to certain needy patients.

In August, two members of Congress investigating generic drug price increases wrote to Valeant Pharmaceuticals after that company acquired two heart drugs, Isuprel and Nitropress, from Marathon Pharmaceuticals and promptly raised their prices by 525 percent and 212 percent respectively. Marathon had acquired the drugs from another company in 2013 and had quintupled their prices, according to the lawmakers, Senator Bernie Sanders, the Vermont independent who is seeking the Democratic nomination for president, and Representative Elijah E. Cummings, Democrat of Maryland.” (NYT, September 2015)

https _blogs-images.forbes.com_alexmorrell_files_2015_07_sacklers-1940x1284
Raymond and Beverly Sackler / Courtesy

The ‘respectable’ pharmaceutical oligarchs, including Raymond and Beverly Sackler with their $14 billion net worth, certainly place Shkreli’s comparably meager wealth in context. And where does the wealth of these good citizen billionaires spring from? OxyContin:

“Addiction, overdoses and accidental deaths followed, and Purdue Pharma found itself facing charges that it had misbranded OxyContin as far less risky than it was. In 2007, Purdue paid $635 million in fines after pleading guilty to false marketing charges by the Department of Justice. (Sackler family members were never charged.)

The company reformulated OxyContin in recent years, making it far more difficult to abuse, but it is still reckoning with lawsuits stemming from its earlier, oft-abused iteration. A case brought by the State of Kentucky also alleging false marketing has been winding its way through the courts since 2007, and damages could exceed $1 billion.

Company spokesman Raul Damas says Purdue Pharma denies wrongdoing in this case, noting that courts in Kentucky and across the United States have dismissed similar cases against Purdue because the evidence did not establish that the company’s marketing caused the harm alleged.

Raymond Sackler, 94, is the only remaining living Purdue Pharma cofounder, though neither he nor his family are actively involved in day-to-day management of their drug companies anymore. He declined a request for interview.”

A list of 18 Health Care Billionaires shows that the industry itself creates massive amounts of profit for the top .01%. Shkreli will never be among the honorable or super rich, because he said what they think, he acted all too publicly how they act privately, he revealed the true face of capitalism: that we, who haven’t any capital or assets, are worthless. That we are excluded from elite circles of wealth and privilege, circles that get smaller and smaller as one gets nearer and nearer to the top. Vulture capitalists aligned with a Republican-controlled government passed a massive tax heist bill in December 2017, which is perhaps the greatest transfer of wealth from middle and lower income Americans to the super-rich since the 1920s. Shkreli has been birthed from that system. Therefore, I am not angry with him. And now, he’s a fellow prisoner. He’s a fellow convict. He exemplifies the contemporary system of capitalism almost too much, and that is why was punished, much like how those who were too exemplary in pressing for Marxism were purged from the Party in the show trials. I hope to meet him when he gets out. I hope to correspond with him during his tenure in prison. I suspect he has a lot to learn about humility, grace and dignity, not from the worlds of privileged distance, but from the enclosed spaces, bodies and minds pressed to the edge of failure and insanity in that great barred menagerie called prison.

Welcome, Shkreli.

. . .

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