Monday, December 21, 2015

Big Pharm Boy Arrested

Martin Shkreli Arrested - David Milberg
Well, sometimes instant karma really can getcha. After hiking up the price of an HIV treatment drug, Martin Shkreli quickly became the most hated man in America. Sure, others have done it before him, and, yes, the entire pharmaceutical industry has horrendous PR ratings, but this guy came to represent everything consumers hate about an industry that regularly saves and enhances their lives … but makes an absurd profit while doing so.

Shkreli was young, brash and arrogant. He came off as entirely unsympathetic, a villain from an old Saturday serial, missing only the mustache to twirl. Now, he’s been arrested, and all across the nation, people cheer, overjoyed this person they had no idea existed a month ago is now likely on his way to jail.

That’s the power of public relations, especially consumer public relations run through the wringer that is social media PR.

The FBI arrested Shkreli on charges of securities fraud, accusing him of orchestrating what they called a "trifecta of lies, deceit, and greed." When you are trying to repair your public image: “lies, deceit and greed” is not a good look.

According to reports, the arrest has nothing to do with any actions related to why most people hate him. Instead, the misdeeds have been connected to a probe that found “widespread” securities fraud in a hedge fund and drug company Shkreli previously managed. Arrest reports accuse Shkreli of using funds from one company to pay for the losses suffered by another.

In a recent news conference, U.S. Attorney Robert Capers said Shkreli used these two companies as his personal piggy bank, running them “like a Ponzi scheme.”

Now, the average consumer (who already hates Shkreli) probably has no idea how one even engages in securities fraud. They may not even understand what Shkreli did wrong … but they have strong negative emotional reactions to loaded terms such as “fraud” and “Ponzi.” Even if people never quite understand why the FBI wants to put Shkreli in prison, they know enough to believe their kneejerk hatred for That Guy was totally justified. True or not, when the consumer public believes they have ironclad proof you are everything they thought you were, that’s a tough PR position to come back from.

David Milberg is an investment banker from NYC.

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