ChrispenEvan said:

Genny Harrison

Martin Shkreli is the only pharmaceutical executive of his generation that ordinary Americans can name, and the reason has nothing to do with what he did.

Shkreli raised the price of an AIDS drug by five thousand percent in 2015. Two other companies raised prices on life-saving heart medications by roughly the same amount that same year. A third tripled the price of an emergency allergy device that costs about ten dollars to make. None of those CEOs went to federal prison. Shkreli did. The difference was the smirk.

Industries do not hate the man who breaks the rules. They hate the man who explains them. Shkreli’s real crime, the one that turned him from a routine financial criminal into a national villain, was saying out loud what the rest of his industry was paid not to say. He bought an old drug. He raised the price. He grinned about it on television. Every pharmaceutical executive in the country watched him do it and understood, immediately, that he had just made their lives much harder, because the trick he had performed in plain view was a trick most of them had been performing in dim light for years.

Start with the facts. In August 2015, Shkreli’s company Turing Pharmaceuticals acquired the rights to Daraprim, an antiparasitic drug developed in 1953 and used primarily by AIDS patients and pregnant women to treat toxoplasmosis. The drug cost thirteen dollars and fifty cents a pill. Within weeks, Shkreli raised the price to seven hundred and fifty dollars a pill. He went on television and called critics morons. Congress hauled him in. He took the Fifth, smirked through the proceeding, and tweeted from the hallway that the members of the committee were imbeciles. He was indicted later that year for securities fraud connected to hedge funds he had run earlier in his career. The fraud charges had nothing to do with Daraprim. There was no federal law that could have prosecuted him for the price hike.

There still is not. He was sentenced to seven years and served four and a half. The Daraprim price stayed where he had set it.

Now look at what the rest of the industry was doing in plain view at the same time.

Valeant Pharmaceuticals acquired two cardiac drugs, Isuprel and Nitropress, in February 2015. Isuprel treats arrhythmia. Nitropress treats hypertensive crisis. Both are used in operating rooms during cardiac surgery. Within months Valeant raised the price of Isuprel by 525 percent and Nitropress by 212 percent. Hospitals began to ration them. The CEO, J. Michael Pearson, was called before the Senate Special Committee on Aging the following spring. He apologized. In his written testimony, he wrote that the company had relied, quote, too heavily on the industry practice of increasing the price of brand name drugs in the months before generic entry. He used the words industry practice. He wrote it down for the Senate. Pearson kept his job until later that year, when the company’s stock collapsed for unrelated reasons. He was never prosecuted.

Mylan acquired the rights to the EpiPen in 2007 for ninety-three dollars and sixty-six cents per two-pack. By 2016, Mylan had raised that price to six hundred and eight dollars and sixty-one cents, an increase of nearly five hundred and fifty percent over nine years on a device that delivers a regulated dose of epinephrine in an emergency. The CEO was Heather Bresch. Her father is Joe Manchin, then the Democratic senator from West Virginia. Her compensation over that nine-year period went from two and a half million dollars to nearly nineteen million dollars. She testified before the House Oversight Committee in September 2016. She apologized, blamed the supply chain, and walked out. She held the job until 2020 and walked away with a fortune. Mylan paid four hundred and sixty-five million dollars to settle a separate Medicaid overcharging case in 2017 and another two hundred and sixty-four million dollars in 2022 to settle the EpiPen class action. No one went to prison.

Insulin is the bigger story and almost no American can name a single executive in it. Between 2008 and 2016, the average list price of insulin in the United States nearly tripled. Three companies, Eli Lilly, Sanofi, and Novo Nordisk, control essentially the entire global market. Litigation in multiple jurisdictions has alleged coordinated pricing. Patients ration their insulin and die from it. The drug was invented in 1921 and the inventors sold the patent to the University of Toronto for one dollar each so that no one would ever profit from it inappropriately. There has been no Shkreli-style prosecution in the insulin industry. There has been no congressional hearing that produced a smirk worth screenshotting. The pricing has continued.

This is the system Shkreli described when he raised the Daraprim price and laughed about it. He was not lying when he said other companies were doing what he was doing. He was lying when he implied they were doing it as openly as he was. The other companies had figured out the part Shkreli refused to perform, which was contrition. Pearson apologized. Bresch apologized. The insulin executives never had to. The country wanted a face to hate, and the industry produced one in Shkreli, and the rest of the industry kept doing what it had been doing, with the additional benefit that anyone now caught raising prices could be defended on the grounds that they were not as bad as the Pharma Bro.

A few weeks ago I wrote about the Capitol Crawl, and the way the long fight for disability rights got rewritten in public memory as a story about a handful of brave individuals rather than about an entire country that had quietly accepted decades of exclusion. The Shkreli case ran the same compression in the opposite direction. A structural problem became a single bad man. The bad man was punished for an unrelated crime. The structural problem was left exactly where it was. Every American who told themselves the system had worked when Shkreli went to prison was being shown a magic trick. The system had not worked. The system had performed.

Daraprim still costs roughly what Shkreli set it at. The generic version that finally arrived in 2020 was priced by its manufacturer at a level high enough that hospitals still mostly buy the brand. Isuprel and Nitropress remain at the prices Valeant set, with minor adjustments. The EpiPen costs roughly what Mylan was charging when Bresch was hauled before Congress. Insulin costs more now than it did when Shkreli went to prison.

I have been writing for a few weeks now about how American outrage finds its targets. The targets keep being people who said the quiet part out loud. The quiet part keeps being the thing that actually runs the country. Shkreli was the rare case where the man who explained the system was punished while the system kept running, and the punishment was widely cheered.

I am not sure how to think about that yet. I am sure that punishing the man who explained the system is not the same thing as fixing the system. We have been doing the first thing for a long time.

We have not gotten around to the second.

It is an outrage and they are trying to bring their American system to Australia.

Cretins!