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Turing Pharma
Finance, Ethics, Strategy
The pharmaceutical industry is under
pressure to deliver drugs at
affordable prices but some CEO’s
prefer to charge monopoly prices or
simply what the market will bear.
The case study highlights Martin Shkreli and his actions
providing a compelling narrative on the state of US
corporate activity in the pharmaceutical industry. It also
addresses some of the ethical issues behind Shkreli’s ‘profit
at all costs’ attitude and his potential manipulation of
financial operations through ‘shorting’ to maintain his
position and managerial control.
In the case of Turing Pharmaceuticals, after its acquisition,
Shkreli increased the price of its primary product, Daraprim
by 5000%.
Shkreli on February 1, 2011, in a naked short sale on an
account it held with Merrill Lynch, his investment vehicle
MSMB Capital sold short 32 million shares of Orexigen
Therapeutics stock. The gamble failed and MSMB Capital
was virtually wiped out. It is this deal that haunts Shkreli
throughout the case as he is accused by another company
he set up Retrophin who accused him of looting their funds
to pay his MSMB investors who had lost money on the
Merrill Lynch deal. He then faces the SEC and Committee on
