You're probably familiar with the ex-CEO of Turing Pharmaceuticals, Martin Shkreli -- the man famous for increasing the price of an old drug to treat toxoplasmosis, a rare parasitic infection, by over 5,000% earlier this year, apparently just to make more money.
In this video segment, MarketFoolery host Chris Hill talks with healthcare analysts Michael Douglass and Kristine Harjes about one of the most hated people in the world this year, and how the pharma industry is reacting to the slurry of news around him.
A full transcript follows the video.
This podcast was recorded on Dec. 15, 2015. Martin Shkreli has since been arrested.
Chris Hill: Worst CEO in healthcare this year? This seems like ... in sports, every once in a while, it's not like, "Who's going to be the MVP in a league in a given sport?" It's "Will the vote be unanimous?" And my hunch is that if you've been paying attention to healthcare this year, the worst CEO isn't a question of "Is this guy the worst CEO?" It's just "Is the vote going to be unanimous?"
Michael Douglass: Yeah. I think the vote's unanimous. It's Martin Shkreli.
Kristine Harjes: Yep. In this room, at least.
Douglass: Yeah. Can't speak for the rest of America, of course ... but, he was at one point termed "the most hated man in America," or something like that ...
Harjes: I've seen that. I've also seen reports that he is "Biotech's Biggest Butthole," to put it gently.
Hill: There you go.
Douglass: All right.
Hill: Thank you for cleaning that up for our audience.
Douglass: We're family friendly here.
Harjes: Of course, for all the children who are listening.
Hill: So, this is the guy, he was CEO of ... was it Turing Pharmaceuticals?
Hill: And he made headlines because he had a drug that, seemingly, for no other reason than he just thought it would be nice to make a heck of a lot more money, raised the price on this drug by ... what percentage?
Douglass: From $13.50 per pill to $750 per pill, which is over a 4,000% increase.
Hill: Just because.
Douglass: Yep. Daraprim is a 64-year-old drug for toxoplasmosis. And it caused a furor. And Hillary Clinton tweeted about it, Twitter just lit up about it, and he's actually recently started talking about doing the same thing with another drug called -- I'm going to butcher the name. You can't help it in healthcare. It's called ... benznidazole, which is--
Hill: Sounds like you're missing a vowel.
Douglass: Yeah. And he's guided that they're also going to increase the price there significantly.
Harjes: And on that one, he's guided that they're going to increase the price to the level of hepatitis C drugs, which, we're talking almost $100,000 there.
Douglass: Yeah, they are not cheap. And the thing is, listen, I'm sure he's making his shareholders a fair bit of money. But when you think about the broad industry, the biotech and pharma industry, this is setting off a conversation they really don't want to have.
Hill: I was just going to say, this reminds me of conversations I've had with people I know in the auto industry, about how, and most recently, Volkswagen, but on any given year we could be talking about Toyota, GM, but, when one of the automakers has some major recall, there's an accident in the case of Volkswagen, there's a massive cover up of trying to defraud the public on emission standards.
All the other automakers see that news and they just shake their head, and it's like, "Well ... now this stink is going to get on us." And that's the thing. Not just Hillary Clinton, pretty much every politician on Capitol Hill was saying, "Now we have to look at Pfizer, now we have to haul all the big drugmakers in here." I don't think anyone necessarily begrudges pharmaceutical companies for trying to make a profit. But when you see this kind of massive, seemingly arbitrary price increase, then you're right, it absolutely sets off all these bells and whistles. And I just picture all the other drugmakers getting into a room with this guy and just smacking the hell out of him.
Harjes: I think they'd do worse than that. I'm just considering this guy's personality. He's not been a good representative of the pharmaceutical industry, to put it nicely.
Hill: He also doesn't -- and we talked about this last week a little bit with Steve Ells from Chipotle, who's been a very good CEO, and I say this as a shareholder -- there are a lot of things I like about Steve Ells and admire about him. But he does not necessarily possess, in his skill set, a great presence on television. And that's fine, because not every CEO needs to be good on TV, although it's helpful when they are. But in the case of Shkreli, it doesn't help his case that he is a young man who looks even younger than he is and just comes across on television as just this petulant child. Again, one more reason I think all the big drugmakers would love to get in a room with him with no windows.
Douglass: And have a word.
Hill: Or two.
Harjes: It almost makes for entertainment, which is kind of sickening if you're following the industry and really care about this kind of thing. This guy is almost kind of funny, if you can look at it in that lens.
Hill: He's a cartoon character.
Douglass: Check his Twitter feed sometime.
Harjes: Exactly. The newest edition of news about Martin Shkreli is that he bought the new Wu-Tang Clan album, which apparently was only going to be released to one person, whoever the highest bidder was, so he buys it for a reported $2 million.
Douglass: Well, that's where it's going.
Harjes: So now you've got people making up all sorts of information about this. I saw something this morning, and I don't know if this guy made this up or if this is actually in the terms of the contract, but apparently, there is a stipulation in the contract about this album that at some point during an 88-year period, the seller can legally plan an attempt to execute a heist to steal back the album. Said heist or caper can only be taken by currently active members of the Wu-Tang Clan and/or actor Bill Murray.
Hill: You know what? I approve of that.
Harjes: This is entertainment.
Hill: Anything involving Bill Murray, I'm good with.
Kristine Harjes has no position in any stocks mentioned. Michael Douglass owns shares of Chipotle Mexican Grill. The Motley Fool owns shares of and recommends Chipotle Mexican Grill and Twitter. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.