it's friday night in midtown manhattan
and i'm here to hang out with martin
shkreli who became famous in october for
raising the price of a drug
that's used to treat hiv positive
patients by more than five thousand
percent
the drug in question is called dara
print it used to cost 13.50 per pill
turing changed the cost to a whopping
750
dollars that's price gouging pure and
simple martin shkreli is a 32 year old
entrepreneur and company builder from
sheepshead bay brooklyn
after increasing the price of daraprim
overnight he became the poster child for
capitalistic greed
shkreli ran with the bad boy image
flaunting his trollish behavior in the
media
he's not your typical pharma tycoon
anyway over the past year he's funded an
indie record label
claimed he would bail bobby schmerda out
of jail and purchase the only copy of a
legendary wu-tang clan album
with no immediate plans to play it
in december shkreli was indicted on
securities fraud charges and is now
under investigation by both congress and
the federal trade commission for price
gouging
so his time in the spotlight isn't over
yet
i caught up with him at his midtown
apartment to meet the man behind the
headlines
oh yeah i noticed uh we are right
next to pfizer is this on purpose it's a
little on purpose
so i walk by here every morning i go to
work and
i walk by pfizer's world clinical world
headquarters and
they don't have one lab in there they
don't have you know any research going
on this company's cut
billions of dollars of research and they
raise price
all the time in fact they raised price
on 100 drugs just last week and nobody
wrote anything about it but
so it's fun to kind of walk by here and
simultaneously see like
what i love and what i hate um i love
drugs and how they can help people but i
also hate
companies that are kind of hypocritical
and full of
and pfizer is a good example of a
company like that so
is that are you not cold by the way it's
like you're wearing like a rain gallery
whatever it's all right impervious not
impervious
i think you're getting uh heckled right
now no he said free shkreli so
i think freeze like i'm gonna hit you
sorry nevermind oh it's all love
so yeah is this yours what no
it's probably fbi yeah there you go um
so it's an fbi
mess in my business this is the spot
checking to see if it's fbi i don't it
might be fbi
this is the spot
this is it right oh that's the album
yeah okay
all right let's open a really nice
waddle this is a
2005 protruce magnum okay so we're gonna
have
some of this maybe play some chests or
do whatever you want
it's been a while since i've done this
i'm assuming you go first right i do
cool i know that much but beyond that it
might be a little
bad so i hit this every time yeah okay
so you play this sicilian defense
frequently or
no i don't know what that even means
okay so i don't understand what wine
we're drinking and i don't understand
the game that we're playing so
that's fine the sicilian defense is one
of the more popular
um moves in chess um
but it doesn't appear you know how to
play chess very well yeah
anyway what do we want to talk about i
kind of want to know how you got started
in
you know the hedge fund business um i
got interested in stocks as a kid and my
friends made fun of me
all the time uh for that you know in
fact i remember
the kids that made fun of me for caring
about stock uh the stock market and i
um um i told them that i'd uh
you know uh that it would someday would
matter and um
you know i got more and more interested
in investments and
uh the time came for me to get like a
part-time job slash internship and i i
uh found my way into a hedge fund but
over time i kind of realized that
that um who gives a you know at the
end of the day like
is that really a career you know
predicting the stock price you might as
well
gamble on racehorses or blackjack or
poker i mean it's
it's such a silly i'm threatening your
queen so just keep that in mind
it's sort of a silly uh it's sort of a
silly um
queen's the most important piece cool um
i'll move her
yes so um in any event i kind of went
from
you know this this kind of ridiculous
idea that people should sit around and
speculate on a stock price like it's
something to do i mean it's absurd um
and and started a drug company one i
could do it
most importantly that i understood
medicine and science enough to the point
where i could start
our company two is very profitable a lot
of people
think that you are evil i know you know
that
yeah are you evil am i evil no no
i um i uh
i think i'm the opposite of evil right i
mean i i think that um
almost it became thing where i wanted to
agree to do it like uh participate in it
and say oh yeah i am evil you know let
me
let me be the bad guy and i started
doing funny and fun stuff that that
maybe even extended
that concept of yeah sure i'm evil um
i'll be the bond villain and uh but the
reality is you know you're
you're talking to someone that cares
deeply about helping people's lives
so i think the idea that i represent
pharma is insane
uh that i don't um i mean i i don't like
most drug companies i think most of them
do a bad job
i think that um i'm different yeah i'm a
capitalist i'd love to make a
an even bigger fortune than i've got now
but i can do it at the expense of a
human life you know
we sell our drugs for a dollar to the
government
but we sell our drugs for 750 a pill to
walmart to exxon mobil to all these big
companies and they pay
full price because them why
shouldn't they and if i take that money
and i'm using it to do research for
dying kids
i think i'm a hero let alone evil so how
did you decide that you wanted to
purchase daraprim as opposed to any
other drug that treats a rare illness
well my team you know looks for drugs to
buy
and i've been fascinated by infections
for a long time my sister was dying of
an infection
and we didn't know it's an infection it
was this
just this strange symptomatology where
she couldn't move
and it was really scary and um so i've
always been sort of fascinated by
infections because they're alive they're
alive within you and it's
it's amazing because we need drugs to
kill these these bugs
and um for daraprim um the uh
opportunity presented itself where we
could um
you know um buy this medicine this
medicine could have been for sale so we
approached
this company and we ended up buying it
so we saw that as an opportunity
um to make money for our shareholders um
but also then
build a platform of a company that was
focused on rare infections
we knew ahead of time that we were going
to raise the price
you know we paid so much for that
medicine relative to the amount of money
it was making that we
we knew that we had to raise the price
it wasn't going to be
and the company selling it to us knew
shkreli claims he's not hurting people
and that if anyone has to suffer from
the price hikes it's greedy insurance
companies
but critics say that building those
companies as greedy as they may be
amounts to a cost spread out across
taxpayers and raises premiums
when you do that does that cause health
care premiums to increase
yeah it's a great question i mean so the
u.s drug
industry is a 500 billion dollar
industry and um
one drug even the biggest drug in the
world can't it can't influence
healthcare premiums it's too big it's in
fact drugs are only a portion
of healthcare in general so doctors are
doctors and hospitals are actually
bigger than drug costs
so drug costs are about 20 of
of all health care costs and 80 percent
as hospitals and
physicians and things like that um and
drugs really take it on the chin
as as the major culprit
and no one sort of complains about
hospitals or doctors
raising one of the smallest drugs in the
world
say you know our drug was public
information was a 5 million
drug even if that went up 20-fold i
could tell you it hasn't
um you know it's 100 million which on a
500 billion
dollar number it's basically meaningless
um
so to me it's like it's a little you
know
i mean my i have a big mouth and and
that's kind of um
the reason a lot of this stuff has
happened that's a good move um
for once and um but you know there are
more expensive drugs there are bigger
drug price increases
i'm not the you know and i'm not saying
that like there's a slippery slope of
saying like well i'm not the worst
child abuser i'm not the worst you know
domestic violence person
that's not what i'm saying at all um you
know
because i don't think that'd be an
appropriate argument i defend what we've
done
i think it's a good thing but at the
same time like if you want to think it's
a bad thing then
you know you can look at other companies
and in fact
last thing i'll say is about 60 to 70
percent of our patients actually do
get it for free and you can imagine if
you extend this kind of offer
to people they'll take advantage of it
and they do um
you know it's hard to run a business
like that shkreli has touted that people
who can't afford darapram can contact
him and get it for free
but physicians and hospital systems
managers across the country have
reported that they can't afford to stalk
the drug
which causes shortages in emergency
situations
i'm sure you know that your company
among others
is part of this investigation in the
senate committee on aging
and there have been you know people that
are representing hospital systems
testifying and saying that you know
there have been shortages at
their hospitals in emergency situations
and they can't afford to stock the drug
uh beyond just individuals you know
being able to appeal to you personally
for free
how do you respond to that kind of a an
issue
yeah i mean it's tricky so before the
price increase most hospitals had a
bottle lying around and they were able
to
feel it it's getting hot in here um
the they had a bottle and and they um
you know they're they're sort of because
this drug is so
rarely used there's 5 000 hospitals in
the u.s there's only a few thousand
people that get this illness to begin
with
so most hospitals will actually never
see anyone with this illness
and so if you have to hold a bottle just
in case
and now the price of that bottle has
just skyrocketed i would complain too
and we got all these complaints and we
decided to say
why don't we make you a tiny bottle that
is cheaper we'll lower the price just
for you
and and that seems to have solved the
situation as far as i can tell
if you can't afford my medicine you know
where to find me i'll be online i'll be
on twitter
there's a way to easily send me a
message that says you know i can't get
this drug
the co-pay's too high help me out martin
you know i
i will i will race i will run to help
you
i've got nothing better to do yeah
you've talked about how your company
plans in spending a lot more than the
average
drug company on research and development
can you talk about
specifically you know what percentage
you plan on on using
uh toward research and development
versus other companies
yeah i mean i love r d um we spend about
um 60 of our revenue in r d the average
drug company spends 15.
so for us it's it's we put all of our
extra income
into r d we don't pay dividends we don't
do anything with our cash
and spend it on research and i'm happy
you know i don't care you know for
daraprim to cost more money
fine you know if that's the price i have
to pay to to find a new medicine
for a dying kid i'll raise it even more
you know what do i care
you know microsoft is going to lose
money walmart's going to lose money
you know why are we crying about this
you know it's not like
there's there's people that are actually
going to suffer from this it's big
fat you know corporations that pay
health care bills in the united states
but the reality is dare prim's dangerous
for you if you took dare from right now
you'd get very sick
and i don't see why that needs to be the
case i think you should be able to take
a drug that doesn't
hurt you that's not too much to ask and
while we're making all this money
whose responsibility is it's ours and
the people who invented therapy many
years ago didn't think about that
and the companies shame on them
who owned it between 1940 and
last year when we bought it they didn't
care either to improve it so we're the
first company that said
you know what let's take an honest look
at this medicine it kind of sucks
and again we're taking a big gamble like
we have no idea
if our second generation drug will work
the escalating price of drugs in the u.s
has become a focus in the 2016
presidential race
the consolidation and lack of
competition within the american
pharmaceutical business has basically
allowed companies to charge whatever
they want most of europe
where public health care is a norm it's
governments that determine what drugs to
cover
and at what price
you know the united states is one of the
few countries that
are only countries that doesn't set drug
prices um
why do you think that's a good thing i'm
not sure it's a good thing right i mean
i think countries that set drug prices
um that's sort of an imaginary concept
no country can set a dark price drug
company central crisis
what kind of is misunderstood and what
people don't understand is
they're companies they have owners and
their owners demand that they extract as
much
profit as possible and that's the rule
of law today if you don't like that
you know i don't know what to tell you
that's the way the world works
whose turn is it it's a minor years your
clock went down
but i moved my king here okay um you're
in check
so this whole game is is aft but um
you know whatever so yeah maybe we call
it uh
call it a game i'm happy to concede that
you won although
i mean i have a check so i guess that's
fine good game in
good game yeah cool
shkreli's wu-tang clan album set him
back two million dollars although you
wouldn't guess it
it sits casually in an embossed case in
his living room the only place that it's
ever been spun
they called the shaolin school the two
cities are
each schools and uh no one's heard that
before
um but one is the shaolin school
and one is the a la school i think like
personally like i see the gizza and me
as like sounds silly
um like i see him in me and vice ver i
hope vice
versa um he's like sort of the scientist
rapper
type guy
are people ever going to be able to hear
this album
other than right now um i think um
it depends you know it depends on on the
world you know i think that
i could see myself in a place where i
break it you know and i've seriously
considered that
um i just snap it in half and
bury the remains of it so no one tries
to reconstruct it and then
i've seen a world where i give away for
free and i've seen a world where
um i charge for it or something like
that or you know
and if if people want to hear it
i'll put it out if people don't want to
hear it
and they don't appreciate the wu tang
for what i think it is
that's fine too so i don't know
everything's sort of open
open-ended i just bought a few months
ago and i was arrested a month ago so my
life's sort of
all over the place um who knows maybe
the feds will own it
uh soon but um you know
i have a contingency plan if that
happens