The CEO and ex hedge fund manager whose claim to flame includes jacking up drug prices by as much as 5,000% has been arrested by federal authorities on Thursday morning, Dec. 17, in his home in Brooklyn.
Martin Shrkeli, 32, was charged with security fraud related to the time he spent in Retrophin, a pharmaceutical company, which he founded. A portfolio company, it has bought the rights of a drug for cystinuria, an inherited disease where the kidneys keep on producing stones, but he also traded investors' money in a scheme described by the authorities as like a Ponzi scheme.
When the trades didn't work and he needed to repay the investors, Retrophin accused him of getting his share from the company and then using its funds to pay off its investors. In September 2014, the board replaced him, and in October, Shrkeli resigned. The company, however, went on to conduct an investigation.
He was later charged during the indictment, but he was released after posting $5 million bail. He has yet to issue a comment over his arrest.
Shkreli caught the harsh criticism in the health community after he announced the rights acquisition of Daraprim, an off-patent drug used to treat toxoplasmosis, a parasitic infection that can lead to eye problems and seizures. After reevaluating its price, it's offered in the market for $750 from $13.50, an increase of more than 5,000%. Although the company promised to reduce the price, in November, it mentioned that it won't but would instead offer concessions like volume discounts.
Last month, an investing company in which he led acquired majority for KaloBios Pharmaceuticals, which owns a drug called Benznidazole, one of the two drugs that can cure Chagas disease that's common in the Americas. Although the details for its price are sketchy, it's believed that it will be sold at least $60,000 per treatment while United States gives it for free during emergency.