Shkreli drew public outrage for increasing the price of the drug Daraprim, a 62-year-old treatment for a risky parasitic infection, to $750 a pill from $13.50 after acquiring it. The medicine once sold for $1 a pill.
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“Shkreli had Retrophin’s corporate secretary and attorney Greebel draft sham consulting agreements, although Shkreli and Greebel both knew that the agreement’s true goal was to settle claims against Shrkeli – and not to provide Retrophin with consulting services”, Andrew Ceresney of the SEC said in the presser.
U.S. Attorney Robert L. Capers has scheduled a press conference for noon Thursday to discuss the indictment of Shkreli and a lawyer who served as outside counsel to Retrophin.
Shkreli said the company would cut the drug’s price. It was not immediately clear who would represent Greebel.
His arrest isn’t related to his work at Turing. After losing money on stock bets he made through one hedge fund, Shkreli allegedly started another and used his new investors money to pay off those who had lost money on the first fund. Then, as pressure was building, Shkreli started Retrophin, which was publicly traded, and used cash and stock from that company to settle with other disgruntled investors, prosecutors contended.
But he has also unapologetically made a business-is-business argument for the price jump.
The outcry over Daraprim turned Shkreli, a boyish drug company entrepreneur, into a pariah on the Internet, where he persistently provoked his critics on Twitter. Instead, the company is reducing what it charges hospitals for Daraprim by as much as 50 percent.
“I probably would have raised the price higher”, he said during a Forbes summit in NY this month.
While most patients’ copayments will be $10 or less a month, insurance companies will be stuck with the bulk of the tab, potentially driving up future treatment and insurance costs. “And my investors expect me to maximize profits, not to minimize them or go half or go 70 percent but to go to 100 percent of the profit curve”.
Shkreli’s arrest prompted a few different, but equally gleeful, reactions. He refers to those who follow him online as his “fans”.
Shkreli also called himself “the world’s most eligible bachelor” and boasted about buying the only copy of a Wu-Tang Clan album for $2 million.
“We’re not aware of where he got the funds for the Wu Tang album”, Capers said.
Shares of KaloBios Pharmaceuticals Inc. shed more than half their value, or $12.56, to $11.03 in early trading Thursday.
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MSMB Capital Management is now defunct after losing several million dollars, and Shkreli was pushed out of Retrophin in September 2014 “because of serious concerns about his conduct”, the company said in a statement.
