Martin Shkreli has been released from prison.

You may remember him as “pharma bro”, who made a killing by exploiting an interesting aspect of the pharmaceutical market.  He realized that there are several categories of pills that have the following characteristics:

1. Their patients require them to live.
2. The market is significant but relatively small.  This is important for the next point.
3. There is no generic.  (Generic drugs typically require a lot of time and effort to get regulatory approval).

There are many such medications.  For example, Daraprim is used to treat toxoplasmosis in AIDS patients (and others).  The patent was long-expired, but the market was so small that no one would step in and go through all the regulatory work and expense to make a generic.  For these kinds of medicines, there is a small profit in making the drugs but they’re not blockbusters who are significant to the bottom line.

Until Shkreli came along.  What he did was buy the rights to Daraprim, and then jack up the price.  By 5600%.  Pricing on the drug went from $13.50 per pill to $750 per pill overnight.

This worked because the normal merciful forces of capitalism were constrained by the government.  In any normal market, if someone had bought something without any patent protection and raised the prices by 5600%, competitors would flood in and restore price equilibrium almost immediately.  However, the generic approval process kept competitors out.

If this was a new tennis shoe, no one would care.  But it’s a life-saving medication, and so you essentially have a market where people must buy no matter what you charge.

Shkreli’s pharma price play wouldn’t have lasted forever, because other pharmaceutical companies stepped in and said “this is so appalling, we’re going to take him out” and within four months a company announced it would be making a generic for $1/pill.

In the meantime Shkreli went to prison for securities fraud.  In one of his previous ventures, he was essentially running a Ponzi scheme, raising capital from new investors and using it to pay great returns to his older investors.

And now he’s out.

And getting into high tech, apparently.  Here’s one description of the new scheme: “the creation of a blockchain-based Web3 drug discovery platform that traffics in his own cryptocurrency, MSI, aka Martin Shkreli Inu.”

There is a white paper but it’s a bunch of buzzwords.  The idea is sort of Folding@Home – your computer will crunch assignments to help discover drugs, and there’s crypto, and you get paid in a currency Martin made up.

What could go wrong?  We must be on the precipice of a bold new era of drug discoveries and medical breakthroughs.  Surely this isn’t a scheme to defraud people through complex but inspiring claims, is it?

Martin doesn’t pass our basic fraud checks.  Sorry, bro, no LEB offers for you.

• Author
• Recent Posts

raindog308

Dread Lord of LowEnd Content at LowEndBox

I'm raindog308, techno polymath and long-time LowEndTalk community Administrator. My technical interests include all things Unix, perl, python, golang, shell scripting, vintage operating systems such as MVS, and relational database systems such as Oracle, PostgreSQL, and MySQL.

I also enjoy using LEBs! I have an empire of little guys for VPNs, larger guys for apps, and big guys for databases and storage. When I'm not in front a screen I'm into German Shepherd dogs, quality knives, target shooting, theology, tabletop roleplaying games, and forest hiking.

I enjoy writing technical articles here on LowEndBox to help people get more out of their systems. You can find me on LowEndTalk @raindog308

Latest posts by raindog308 (see all)

• Crunchbits Discontinuing Popular Annual Plans – The Community Mourns! - November 20, 2024
• RackNerd’s Black Friday 2024: Bigger, Better, and Now in Dublin! - November 19, 2024
• It’s the Season of Giving and CharityHost Has Deals for You! - November 18, 2024