For most people, the fact that Martin Shkreli was driving the cost of desperately needed drugs to insane levels is what makes him so despicable. But for investors looking to get in on Shkreli’s cash cow, that’s exactly what they liked about him.
[Shkreli] then approached [investor Sarah Hassan] about a business he was starting called Retrophin, to sell so-called orphan drugs to treat rare conditions. His pitch, she said, was “you can make a lot of money on orphan drugs, because the price per patient is quite high.”
And that price became much, much higher once Shkreli was involved. Shkreli sought out situations where people suffered from long term illness where there were few options in medication. Then he gained control of the drugs and sent prices through the roof. It was a system that generated huge profits in a hurry, and kept investors happy.
However, behind the scenes, it turned out the Shkreli was far less of a wizard on most of his investments. Profits generated by holding people ransom for the lives either went into Shkreli’s pocket, or to pay off horribly bad stock decisions that he made on two other funds.
Shkreli, best known for raising the price of Daraprim — a 62-year-old drug primarily used to treat newborns and HIV patients — from $13.50 to $750 a pill, went on trial Wednesday for allegedly defrauding investors.
For investors, it wasn’t Martin Shkreli’s monstrous actions that made them turn away. It was only when those actions stopped hauling in big bucks that he got in trouble.
from Daily Kos http://ift.tt/2t40VFp
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