A CEO Who Gives Free Markets a Bad Name

If Martin Shkreli is not the most hated man in America, he must least be first runner-up.

If his name doesn't ring a bell, you're not alone. He's probably less well known for who he is than for what he did.

Shkreli, 32, is the Turing Pharmaceuticals CEO who decided to raise the price of Daraprim, a drug used to treat toxoplasmosis in cancer and AIDS patients, by more than 5,000 percent.

Although he admitted in interviews with Bloomberg TV and CNBC last Monday (Sept. 21) that the drug costs less than a dollar to make, Shkreli raised to price from $13.50 a tablet to $750.

"At this price it's a reasonable profit," Shkreli told CBS News. "Not excessive at all."

Ah, that's what they all say. Shkreli is far from the first drug company CEO to take an old drug and boost its price. But he may well be the first to brag so brazenly about it.

He spent the next 24 hours in a Twitter battle with some of his new enemies, as his name trended on the social network.

"No, you are wrong," he responded to a user who tweeted "You have given people their death sentences," according to an exchange captured by the Fusion news website. But complex market arguments don't fit as easily into a tweet's 140 characters as snark does.

To a journalist who tweeted, "I think the hole you've dug is deep enough," he tweeted back, "uh f u." Ah, what a swell guy.

But by the next day, Shkreli took his Twitter account private and said he was backing off the price hike. He would make the drug more affordable, he told ABC News and NBC News on Tuesday evening. Yet, beyond assuring us that Turing will still make "a very small profit," he gave no indication as to what the new price would be.

Drug companies have long argued that they need to price their pharmaceutical products high in order to fund the research that brings us newer and better drugs. But how high can prices be raised before they begin to gouge? That's a hard line to draw, but 5,000 percent seems clearly to leap right over it.

By midweek even billionaire celebrity Donald Trump, perhaps delighted to have someone more widely hated than himself to kick around, took a moment in his Republican presidential campaign to blast Shkreli.

"He looks like a spoiled brat to me," Trump told reporters at a news conference in South Carolina. "That guy is nothing. He's zero. He's nothing. He ought to be ashamed of himself."

Shkreli, Trump noted, was one of the "hedge fund guys," the only group on whom he wants to raise taxes. They're "getting away with murder," he says, as they "shift paper around" and "get lucky."

On this Trump and the Democrats' front-runners showed rare agreement. Hillary Clinton called the Daraprim increase "price gouging" and said drug price reforms will be a key issue in her campaign. Fellow Democratic candidate Bernie Sanders promised to add Daraprim to ongoing congressional probes of drug pricing.

In the political sphere, it hardly helped Shkreli's case that the controversy blew up days before Pope Francis' historic address to a joint session of Congress. This, after all, is the pope who called the theories that "economic growth" and "a free market" will inevitably bring "greater justice and inclusiveness" an opinion that "expresses a crude and naive trust in the goodness of those wielding economic power."

He might well have been talking about Shkreli, whose remarkable indifference to public outrage borders on a disdain for humankind.

Yet speaking before Congress, the pope mentioned only the fruits of capitalism as he called for a "humane, just and fraternal" response to undocumented immigrants in the Americas "led to travel north in search of a better life for themselves and their loved ones, in search of greater opportunities."

At that, the conservative Wall Street Journal editorialized triumphantly, "There must be something moral to free-market economics." Indeed, capitalism brings more prosperity than other systems do, especially when CEOs are encouraged to do the right thing.

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(E-mail Clarence Page at cpage@tribune.com.)