If you’ve got more money than you could ever possibly need for life’s essentials, you — like pharmaceutical CEO Martin Shkreli — may also have limitless options for how to spend your extra cash. Like spending $2 million to buy a new record album.
The 32-year-old Shkreli owes his immense fortune to a short yet lucrative career as a hedge fund manager turned pharmaceutical entrepreneur. The secret to his “success”: Shkreli buys old low-cost drug patents and then raises the cost of the drug dramatically, a two-step that he has so far pulled off multiple times.
Until earlier this year Shkreli operated in the shadows. But then his company, Turing Pharmaceuticals, infamously raised the price of a popular AIDS medication by more than 5,000 percent overnight. The subsequent fierce public outcry led the BBC to dub him “the most hated man in America.”
How can Shkreli get away with his price gouging? Our American health care system conveniently bans the importing of cheap, generic drugs from other countries and legally blocks our country’s largest purchaser of pharmaceuticals, Medicare, from negotiating prices. That all leaves fortune-hunters like Shkreli free to monopoly price their products.
In Shkreli’s case, the personal payoff has been huge. His drug work and the time he spent winning big bets on Wall Street (and sometimes losing big) has generated a net wealth reportedly in the ballpark of $100 million.
That fortune doesn’t place Shkreli in the Forbes 400. But $100 million does put him within the nation’s richest one-tenth of 1 percent, a group whose combined assets now equal the wealth of the entire bottom 90 percent of the American people.
Shkreli, known around the Internet as “Pharma Bro,” has now decided to use a small chunk of his immense wealth to spend $2 million to buy a one-of-a-kind album from hip hop group Wu-Tang Clan. In the process, he continues to personify our staggeringly unequal society, a place where extreme wealth sits concentrated in precious few hands.
You might be wondering, as I did, why a $2-million Wu Tang album exists? The group first grew to fame in the 1990s with the hit song C.R.E.A.M. (Cash Rules Everything Around Me). A bit over a year ago, Wu Tang announced plans to release the group’s next album in a single copy to be sold in an online auction. Why do this? The group’s explanation: Wu Tang wanted to “put out a piece of art like nobody else has done in the history of music.”
A more likely explanation for this hyper-exclusive release: Wu Tang saw a shot at a big paycheck and plenty of good and free PR for the group. Martin Shkreli may have helped with the former, but definitely not the latter. The media commentary on this stunt has ranged from skeptical to merciless.
Shkreli’s $2-million album purchase stands as the latest — and perhaps most egregious — example of how the ultra wealthy pollute our culture as they rush about buying ever pricier status symbols. In today’s new Gilded Age, these ultras simply outbid each other for alpha status, a $2-million record album here, a record-breaking $179-million Picasso there.
Without action to stem our growing concentration of wealth, we can expect to see many more records in the years to come.
Josh Hoxie tracks the debate over the estate tax and other grand divide-related concerns for the Institute for Policy Studies Program on Inequality and the Common Good.