Martin Shkreli, the failed hedge funder turned drug executive turned internet troll who emerged for a time as the smirking face of greed in the American pharmaceutical industry, is going to jail. On Friday, a federal judge in Brooklyn sentenced him to seven years in prison for securities fraud. Before the punishment was handed down, Shkreli reportedly delivered a long, sobbing, and self-lacerating plea for leniency. “I am here because of my gross, stupid, and negligent mistakes,” he told the court.
All true. And yet, despite the spectacular karmic payback the world seems to have handed Shkreli, it’s hard to feel any satisfaction at his fate. As much as anything, his sentence is emblematic of a system where penny-ante scams are punished with the full force of the government’s wrath and the biggest grafts are still legal.
Shkreli became notorious as the CEO of Turing Pharmaceuticals, where he cornered the market for a six-decade-old generic drug taken by AIDS patients and infants, then raised the price more than 5,000 percent, from $13.50 to $750 per pill. Shkreli wasn’t the first or only pharmaceutical executive to make a killing price-gouging on old, well-past-their-patent drugs. But he was the most attention-hungry and flippant, delivering unapologetic TV interviews and spouting rap lyrics on Twitter, where he took on his critics. He trolled Congress during a House hearing. He disrespected the Wu Tang Clan. He didn’t make himself easy to love.
The case against Shkreli had nothing to do with any of that. Instead, it focused on his early misadventures as a Wall Street schemer—the sort of small-time white collar criminality that would barely merit a newspaper mention if it hadn’t involved one of the most loathed figures in American business. Prosecutors claimed that Shkreli lied to investors in his first two hedge funds, which were essentially tiny Ponzi schemes, then paid them back with money funneled illegally from his first successful venture, a company called Retrophin—which is where Shkreli initially got into the business of buying up old drugs to raise their prices. (He was ultimately convicted on three of the eight counts).
That sums up a lot about the state of U.S. capitalism and law. It’s perfectly kosher to milk grotesque profits from old, life-saving medications. But playing games with a relatively small amount of investors’ cash can get you put away for the better part of a decade. One might argue that prosecutors wouldn’t have ever bothered pursuing Shkreli, and instead let his conflict with Retrophin’s board keep playing out in civil court, where there was a lawsuit, if he hadn’t become a headline fixture. But that doesn’t change what he was actually convicted for.
Meanwhile, little has changed in the pharmaceutical industry. As pretty much everyone expected, Donald Trump’s promise to do something about pharmaceutical prices has come to nothing so far. His latest secretary health and human services, Alex Azar, has made concerned noises about the cost of medications, but it’s hard to believe he’ll do anything serious to combat the problem, given that he was CEO of Eli Lilly when the company was busy pushing up the price of insulin. Shkreli’s old company Turing is still trucking along, albeit with a branding change. It’s now known as Vyera, a name that seems purposely forgettable.
Altogether, Shkreli’s downfall is a perfect fable for our time. In America, it’s fine to screw patients. Just don’t screw investors.