Wall Street short-sellers expose a scam that regulators overlook: how Big Pharma gouges patients in need of life-saving drugs.
- This documentary is the third installment of the 'Dirty Money' series. Like the two previous installments 'Drug Short' is all about playing the game (immorally) in order to get money. The film starts by showing the final free days of Martin Shkreli. He became famous in as the founder and CEO of Turing Pharmaceuticals. In 2015 Turing obtained the license for Daraprim and raised its price from $13.50 to $750.00 per pill. Thus he became known as 'Pharma Bro' the least moral and most hated person in America. The final picture of him in the opening sequence is of him being arrested later that same year for securities fraud. The doc follows by showing that his immoral raise of drug prices just follows in the footsteps of Valeant Pharmaceuticals. In 2008 Valeant was a relatively minor player in the drug industry: a California company worth $2.1 Billion. In 2010 Valeant merged with Canadian drug maker Biovail. The resultant was that Valeant could escape paying U. S. taxes and pay the smaller Canadian tax rate. But this turned out to be only the beginning. Most pharmaceutical companies spend 18% of their revenue on Research and Development of new drugs. Valeant decided to cut that R&D amount to 3%. This increased their bottom line but turned out to be only the start. Valeant embarked on a massive Merger and Acquisition policy. They would buy or merge with small drug companies who already held patents to specialized prescription drugs. The prices were then raised and the patient using those drugs had to pay. Yes they lost customers but because the prices were raised exorbitantly, Valeant became rich. As an example, the film interviewed a patient with Wilson's disease. The patient had been taking Syprine, a drug developed by Merck Pharmaceuticals at a cost of $1,395 per patient per year in 2013. After Merck was purchased by Valeant the cost rose to $21,267 by 2017. When the interview was recorded, the cost was approximately $289,000 per year. It was price gouging but most patients carried health insurance through their companies so it was paid by the insurer. The insurer passed these increases on to the rest of us. Valeant's business strategy hurt the patient directly while indirectly hurting the public. Most shareholders of the company were happy with the short-term profits and the greed which caused them. But some weren't happy and Valeant's actions brought increased scrutiny. That scrutiny uncovered a Valeant plan to ripoff health insurance companies. Once this was publicly known the stock would drop. That drop attracted 'short sellers', those stock traders who discovered how to benefit from the drop in stock prices. Fahmi Quadir is a short seller who blew the whistle on Valeant to bring its immoral business plan into light. Valeant was shown to be the moral equivalent of Enron (a discredited and now bankrupt energy company famous for willful fraud). Like Enron, relief only came after Congressional hearings: Senator Claire McCaskill summed up the hearings "We didn't find anything they were doing which was illegal. And that's the thing that's startling about this." The documentary ends by asking "What is good for Valeant versus what is good for the public?"