Martin Shkreli, the CEO of Turing Pharmaceuticals, announced a huge increase in the cost of his drug for a life-threatening disease. Then he backtracked. By analyzing his passive statements, you see exactly how a scoundrel evades responsibility.
After acquiring the drug Daraprim, used to treat the sometimes deadly parasitic infection toxoplasmosis, Turing Pharmaceuticals hiked the price from $13.50 to $750 per tablet. Outrage directed at Shkreli went viral. Hillary Clinton and Bernie Sanders called for investigations and changes in pharmaceutical regulation.
Shkreli’s response? He called a blogger who asked about the 5000% price increase a “moron.” He went on “CBS This Morning” and told a reporter “At this price it’s a reasonable profit, not excessive at all,” and “With these new profits, we can spend all of that upside on these patients who sorely need a new drug, in my opinion.”
Yesterday Shkreli reversed his decision on the price increase. Take a look at several statements he made to NBC News (passive voice or similar constructions in bold italic):
Yes it is absolutely a reaction — there were mistakes made with respect to helping people understand why we took this action, I think that it makes sense to lower the price in response to the anger that was felt by people,”
“It’s very easy to see a large drug price increase and say ‘Gosh, those people must be gouging.’ But when you find out that the company is not really making any money, what does that mean? It’s very hard stuff to understand.”
I think in the society we live in today it’s easy to want to villainize people, and obviously we’re in an election cycle where this is very, very tough topic for people and it’s very sensitive. And I understand the outrage.
[The cost of producing the drug doesn’t account for] the quality control, the regulatory costs, and all of the other things that come with having a drug company.
It may turn out that’s it not even profitable at all, even at this price.
If you’re in charge, you take responsibility. Shkreli takes none. “Mistakes were made” is the classic passive evasion. He bought the company and then it increased the price — either he made this decision just to boost profits wildly or he’s totally ignorant of how pharmaceutical businesses actually work (or both). And he explicitly says in the first quote that he is lowering the price in response to people’s anger. This implies that he’s changing the price not based on costs, but based on public perception.
Here’s what his statement would look like if it was sincere and honest.
I bought this pharmaceutical company since it looked like a great deal. I didn’t worry about the economics of the company since I could make tons of profit by raising prices on a drug that lots of people need. As even an idiot knows, that’s how monopolies work. Unfortunately for me, it turns out there is a limitation on drug prices: public outrage and political pushback. That’s why I’m backing down. Here’s what I learned: outrageous profit grabs are a lot easier if you can do it when no one’s looking. (And maybe tweeting that people are morons isn’t the best way to keep this kind of thing a secret.)
[tweetthis twitter_handles=”@jbernoff”]Martin Shkreli, like toxoplasmosis, is a parasite on the healthcare system.[/tweetthis]
When you read passive voice from a CEO under pressure, ask yourself who’s really responsible. That’s where the truth is. Passive voice is the last refuge of the scoundrel.
Photo: Paul Taggart/Bloomberg