Pharma CEO who hiked AIDS drug price by 5500% bailed for $5m after FBI arrest
The former hedge fund manager who raised the price of an AIDS drug by 5500% has been bailed following his arrest by FBI agents on securities fraud charges.
Martin Shkreli, the 32-year-old founder and chief executive of Turing Pharmaceuticals, came under fire after buying the rights to 62-year-old drug Daraprim.
The drug costs less than $1 per tablet to make, and is used to treat conditions including AIDS-related toxoplasmosis – but Shkreli raised the price by 5500%, charging $750 per pill.
Shkreli was arrested on Thursday morning by federal agents at his Manhattan home.
He has now been bailed after posting $5 million, and has entered a not guilty plea for the charges.
The pharmaceutical CEO is accused by federal prosecutors of using shell companies after his now defunct hedge fund MSMB Capital Management lost millions of dollars.
The accusations include using the complex shell game to make secret payoffs and to set up fake consultancy arrangements.
Biotech firm Retrophin has sued Shkreli in federal court, making the allegations about transactions between the company and MSMB, while Shkreli was still at the firm.
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It alleges that Shkreli used fake consultancy arrangements to pay off investors in MSMB, who lost money after a bad trade with Merril Lynch in 2011 which lost the company $7 million.
After initially saying he would reduce the Daraprim pricing, he later changed his mind. He responded to a tweet from Hillary Clinton criticising him for the price hike simply saying: “Lol”.
He later found a new group of people to troll: fans of hip-hop collective the Wu-Tang Clan.
Since, Shkreli announced plans to increase a drug used in the treatment of the Chagas disease.
Benznidazole is used in the treatment of Chagas disease, which can prove fatal.
Despite costing just $50-100 for a two month course of treatment in Latin America, Shkreli is seeking FDA approval to sell the drug in the US, and plans to charge $80,000.