In 2015, Martin Shkreli captured nationwide headlines when he raised the worth of a life-saving remedy by 5,000%—from $13.50 to $750 per tablet. However the audacious worth hike wasn’t what finally landed him behind bars.
The actual story entails an online of deception spanning a number of firms, tens of millions in misappropriated funds, and a brash character that liked to courtroom controversy. That is the story of how a former hedge fund supervisor’s pharmaceutical scheme unraveled, revealing his felony fraud whereas additionally serving to to vary how medicine are priced in America.
Key Takeaways
- Shkreli orchestrated a fancy securities scheme the place he misappropriated tens of millions to pay again defrauded hedge fund buyers.
- Whereas Shkreli’s infamous 5,000% Daraprim worth hike wasn’t unlawful, the general public outrage it generated was a catalyst for drug pricing reform.
The Setup: From Wall Avenue to Pharma
After founding two hedge funds—MSMB Capital and MSMB Healthcare—Shkreli established himself as an aggressive investor concentrating on the healthcare sector. At Retrophin within the early 2010s, he gained a fame for controversial techniques—utilizing firm funds for personal investigators and making a hedge fund inside Retrophin that wasn’t firm licensed—leading to his termination as CEO.
He then launched Turing Prescribed drugs in 2015, concentrating on ignored medicines. This gave Shkreli management over drug pricing, setting the stage for his most infamous actions.
The Scheme: The $750 Tablet and Securities Shell Sport
Daraprim, FDA-approved in 1953 to deal with toxoplasmosis, a parasitic an infection, was a low-profile drug till Turing’s acquisition granted it unique rights to distribution. After securing these rights, Turing raised the worth from $13.50 to $750 per pill—a rise of greater than 5,000%—placing the drug out of attain for a lot of sufferers. Shkreli contended that revenues from the drug would fund improvement of higher formulations, however critics famous no clear R&D plans.
Behind the scenes, Shkreli had been partaking in securities fraud, utilizing Retrophin funds to pay buyers he had defrauded by means of his failed hedge funds.
Tip
In 2015, Shkreli paid $2 million for the only copy of Wu-Tang Clan’s album “As soon as Upon a Time in Shaolin,” which was later seized and auctioned off in 2021.
The Unraveling: Congressional Hearings and Felony Expenses
Regardless of his elimination as Retrophin’s CEO, enterprise capitalists nonetheless backed Shkreli’s subsequent enterprise. Information of the Daraprim repricing generated widespread condemnation on social media, the place Shkreli’s provocative posts and media appearances fueled additional outrage. “I’d have raised costs greater,” Shkreli advised a Forbes healthcare convention in late 2015. “That is my obligation”—presumably to firm shareholders, whom he was additionally defrauding.
In December 2015, Shkreli was arrested for securities fraud. His February 2016 testimony to the U.S. Home Oversight Committee—he smirked frequently, although he invoked the Fifth—gained him nonetheless additional infamy.
In March 2018, a jury convicted him on two counts of securities fraud and one rely of conspiracy. Earlier than sentencing, a sobbing Shkreli advised a Brooklyn federal courtroom decide he was guilty for his predicament, regardless of years of claiming in any other case. Talking of himself within the third individual, he mentioned, “I took down Martin Shkreli with my disgraceful and shameful actions.”
The decide then sentenced him to seven years in jail—half the time sought by prosecutors—and ordered a $7.4 million forfeiture of property he gained from his crimes.
Essential
In 2022, Shkreli was barred from each the securities and pharmaceutical industries.
The Legacy of the Case
Whereas Shkreli was by no means criminally charged for price-gouging, his high-profile notoriety sparked pharmaceutical pricing reforms:
- A number of states handed anti-price-gouging laws and worth transparency necessities.
- The U.S. Division of Well being and Human Companies mandated in 2018 that direct-to-consumer adverts for medicine costing over $35 monthly show checklist costs.
- In 2019, Congress handed the CREATES Act to dismantle distribution boundaries that delayed generic competitors, instantly addressing techniques Shkreli had employed.
- The pharmaceutical trade has turn into extra cautious about dramatic worth will increase. Annual worth hikes of about 10% have come right down to about 4%.
The place Is He Now?
Launched from jail in 2022 after serving about 5 years, Shkreli—regardless of being barred from the securities and pharmaceutical industries—appeared on “Hims Home” in late April 2025 the place, whereas smirking on display, he was launched briefly because the controversial “Pharma Bro” identified for drug worth will increase. Co-host Jonathan Stern claimed “what usually will get misplaced in Martin’s story” was his work as a CEO and hedge fund supervisor, calling him a “shrewd healthcare commentator”—no point out of his convictions or trade bans—earlier than Shkreli provided funding recommendation on Hims & Hers Well being Inc. (HIMS).
The Backside Line
Shkreli’s Daraprim pricing controversy grew to become a watershed second in pharmaceutical coverage, triggering new laws and drawing consideration to the outsized will increase within the costs that Individuals pay for prescription drugs.
