Martin Shkreli, the infamous pharmaceutical CEO who became a symbol of Americans’ discontent with rising drug costs after he drastically hiked the price of a cancer drug earlier this year, was arrested by the FBI early Thursday morning.
According to Bloomberg News, which broke the news of the arrest, the charges against Shkreli are unrelated to his pharmaceutical pricing. He is being accused of illegally siphoning money from Retrophin, a biotech firm that he founded in 2011, to pay off unrelated business debts.
For months, Shkreli has been under investigation for potential wrongdoing during his time as Retrophin’s CEO. After he was ousted from Retrophin’s board last year, the company sued him for $65 million in damages, alleging that he stole Retrophin’s money to prop up his other business ventures and gave away its stock to his friends.
Shkreli, a former hedge fund manager in his early 30s, was dubbed the “pharma bro” this fall after he increased the price of Daraprim — a drug used to treat infections in cancer patients and people with AIDS — by a dramatic 5,000 percent. The price of the drug soared from $13.50 per pill to $750 per pill, practically overnight.
The CEO quickly became the subject of mass outrage over potentially unethical practices in the pharmaceutical industry — where it’s not uncommon for companies to purchase the rights to obscure drugs and drastically raise their prices in order to turn a profit.
In fact, the company that Shkreli is now accused of defrauding employs the same practices. According to the New York Times, Retrophin adopted the “controversial business strategy” of acquiring drugs used to treat neglected diseases and immediately hiking their price tags. For instance, after Retrophin acquired Thiola — a drug used to treat a disease that causes kidney stones — the company upped the price from $1.50 per pill to $30 per pill.
Rising drug costs have become an issue that may factor into the 2016 presidential election. Bernie Sanders and Hillary Clinton have both released plans that they say will help control spiraling prescription drug prices, partially by tamping down pharmaceutical industry profits.
Update:
Shkreli’s current company, Turing Pharmaceuticals, announced on Friday that he has been ousted as CEO. He will be replaced by the chairman of the board. “We wish to thank Martin for helping us build Turing Pharmaceuticals into the dynamic research focused company it is today, and wish him the best in his future endeavors,” the chairman said in a statement.