Pharmacy tales: The man who out-Shkrelied Shkreli

November 10, 2015

Article

Can you say "Risperdal," boys and girls?

David StanleyThere's a long lag between the time I write these columns and when they actually appear in print, so by the time you read this, the uproar over “pharma bro” Martin Shkreli, the man who bought the rights to the obscure but lifesaving drug Daraprim and immediately raised the price of a course of treatment from $1,130 to $63,000, will probably have died down. [Editor’s note: Not a chance.]

As I type this, however, the story is burning up the internet, with Shkreli portrayed as Public Enemy No. 1, a boorish, cocky, crass poster boy for those who feel that our system of corporate capitalism is out of control.

Here's the thing, though. While the massive price increase that the brazen profiteering Shkreli originally planned - which he later announced he would dial back - is in no way commendable, it would have broken absolutely no laws. As long as you or your insurance company can come up with the cash, you will get an effective, safe treatment for your condition, the side effects and risks of which are well known and documented.

Keep this in mind as I tell you the tale of another pharmaceutical executive.

How to make crime pay

Most everyone reading this article is familiar with Risperdal, the blockbuster mental health med that is probably on the fast-mover rack of a good many pharmacies around the country. It won't come as a surprise that when the drug was introduced, its manufacturer was aggressive in promoting its product. If you haven't already read the massive piece by Steven Brill in the Huffington Post, however, you might be dismayed by just how aggressive.

As outlined in the story, Johnson & Johnson, Risperdal's maker, took a drug the FDA said was primarily effective in treating schizophrenia in adults and actively promoted it for a wide variety of uses, including treatment of autism in children, and formed a special sales team to push for its use by the elderly, in spite of the fact that the drug was not approved for use by that population.

In a summary for The New York Times, Nicholas Kristof wrote: “The F.D.A. protested and noted that there were 'an excess number of deaths' among the elderly who took the drug. J&J seems to have shrugged. It was making vast sums, and the F.D.A. didn’t have teeth.”

It gets worse

And that's just the tip of the iceberg. I don't have enough space here to cover the kickbacks to Omnicare and payments to doctors and Medicaid systems, or how the company tried to cover up things like the case of the boy who grew a size 44D bust.

The Feds did finally decide that Johnson & Johnson had gone too far. The company eventually pled guilty to charges of off-label marketing and kickback schemes, and paid criminal and civil penalties of $2.2 billion, a little over 7% of worldwide Risperdal sales.

You’ve heard plenty about the “pharma bro.” Have you ever heard of the executive who was in charge of this ill-fated marketing campaign? His name is Alex Gorsky, and he went on to become CEO of Johnson & Johnson. While Shkreli has been vilified the world over, in part, no doubt, because of the horrible way he presented himself in interviews, Gorsky quietly went on to earn $25 million in 2014.

The law-abiding but obnoxious Shkreli reportedly has received death threats and the scorn of millions, while the man who led Johnson & Johnson to a criminal conviction was honored by the Appeal of Conscience Foundation, an interfaith religious group that honored him as a “man of integrity” and “corporate leader with a sense of social responsibility.” I'm not making this up.

The takeaway

All this tells me that Shkreli was simply a good PR man away from successfully pulling off his strategy, while a good corporate legal department can help you literally profit from crime.

The tale of the pharma bro isn't one of out-of control-capitalism; it is one of the importance of style over substance. If you don't believe me, Alex Gorsky has an integrity award he can show you.