And the ‘Shkreli Award’ goes to …

This nonprofit “honors” health care’s bad actors by presenting awards for ethical lapses, price gouging, and now pandemic profiteering.

Six minutes. That’s how long it took for Martin Shkreli to go from being just another CEO of a drug company to one of the most hated men in America. When Shkreli’s company, Turing Pharmaceuticals, bought the rights to the antiparasitic drug Daraprim in 2015, Turing promptly hiked the price from $13.50 a pill to a whopping $750—even though it costs only pennies to make. In a six-minute interview with CNBC, Shkreli justified the move by claiming his company would use the profits to invent new drugs. That’s when his smug non-apology, and his name, went viral. 

Now, four years after Shkreli was convicted of securities fraud, America still loves to hate the “pharma bro.” But for all the attention Shkreli gets, he’s just one member of a large gallery of rogues from inside U.S. health care. 

Practically every day there’s a news story about a bad actor taking advantage of vulnerable patients. That may seem hard to believe given the kind of heroism we’ve all seen during COVID-19 as health-care workers put their own lives on the line to care for others. We all owe them a debt of gratitude. Unfortunately, for every person in our health-care system who has acted bravely, there is no shortage of selfish Shkrelis out there—like the hospital that used a technicality to force a nearly $900,000 medical bill on its own employee after a traumatic childbirth. 

We should know. Each year at the Lown Institute, the staff combs through dozens of stories in the media, looking for examples of egregious profiteering and dysfunction in health care. With the help of a diverse panel of judges, we give out annual Shkreli Awards to 10 of the most deserving offenders. 

Through the years, we’ve learned not to underestimate the lengths to which institutions and individuals will go to protect their bottom lines. We like to think that no bad behavior can surprise us anymore—but then we learn better. Last year, we found a pharmaceutical company seeking the financially advantageous “orphan” drug designation for a drug it said was for a rare disease. The disease was COVID-19.

When we put all the examples of Shkreli-like behavior together, they stop looking like anecdotes and start looking like evidence. That’s the point of the awards: to highlight the structural weaknesses in health care that allow this kind of behavior to occur. 

Again and again we see in the Shkreli Awards that the way that health care is paid for, regulated, and organized does not just permit profiteering, it encourages it. Private insurers pay hospitals at a much higher rate than Medicaid does, so hospitals often try to avoid taking Medicaid patients (who are usually the patients in greatest need of care). Our “fee-for-service” reimbursement system, in which doctors and hospitals are paid more to do more, gives a provider an incentive to recommend a procedure or test even when a patient doesn’t need it. Drug prices have soared in recent years in part because Congress will not allow Medicare to negotiate for lower prices.

The COVID-19 pandemic revealed these structural problems as never before, making the 2020 Shkreli Award winners particularly shocking. Even as countless health-care workers and organizations stepped up, others treated the pandemic as “business as usual”—or worse, an opportunity for exploitation. 

For example, several California hospitals with open ICU beds refused or delayed transfers of COVID-19 patients from nearby hospitals that were overflowing. The reason? The patients had Medicaid or were uninsured. Any sense that the hospitals should help relieve the overcrowding was outweighed by what’s known inside health care as the “wallet biopsy”—a cynical phrase for how hospitals avoid caring for patients with public insurance.

Nor did COVID-19 melt the cold hearts of pharma. When the World Health Organization created an information-sharing project to more easily develop and distribute COVID-19 resources, several large pharmaceutical companies that were developing vaccines refused to participate. One CEO went so far as to call the project “nonsense” and “dangerous.” 

Others took the pandemic as an opportunity to maximize their profit at public expense. One New England doctor allegedly used a public COVID-19 testing site to test for at least 20 other respiratory pathogens. Why just test for COVID-19 when you can do a “super COVID test” and bill insurers up to $2,000? 

These examples illustrate an important lesson we’ve learned: What Shkreli Award recipients do is certainly unethical, but usually it is not illegal. Martin Shkreli may have said it best in an interview with Vanity Fair magazine: “I liken myself to the robber barons. Rockefeller made no attempt to apologize as long as what he was doing was legal.” (Ironically, when Shkreli went to prison, it was not for his price gouging but for cheating a hedge fund.) His conviction and incarceration didn’t bring down Daraprim’s price; it’s still hundreds of dollars per tablet. 

The story of Martin Shkreli, and most Shkreli Award winners, is a story of systemic—and not necessarily individual—failure. Some say our health system is broken, but that’s not quite right. One aspect of the system is working exactly as intended: to make a few people a heck of a lot of money. 

When we announced the 2020 awards, one of our judges, pediatrician and Flint water crisis whistle-blower Mona Hanna-Attisha, posed this question: “What can we do to make this the last Shkreli Awards?” As much as we’ve learned from this project, we’d like nothing more than to retire it for lack of nominees. But that will take some serious changes. 

If the Biden administration and Congress want to put us out of a job, they need to make these ethical lapses illegal and then prosecute them. There should be limits on price increases for health-care services and drugs (especially for essential medicines like Daraprim). We need Medicare and other government payers to be able to negotiate prices down in exchange for the huge volume of patients they cover. 

The way we pay hospitals and physicians must be restructured so that anyone, regardless of income or insurance status, can access the same high-quality care. Some policy experts have proposed an “all-payer rate setting” system in which all insurers, public and private, pay the same amount for a given medical service. No more discriminating against poor patients with Medicaid or against older patients with Medicare. And the Biden administration should continue moving toward implementing so-called value-based payments—giving hospitals set budgets and physicians’ salaries—rather than fee-for-service payments that encourage harmful unnecessary care. 

Even if you’re not a policymaker, you can still make a difference. Several Shkreli Award recipients have changed their ways because grassroots movements of clinicians, patients, and activists put pressure on them. For example, the Free the Vaccine movement contributed to biotech company Moderna lowering the price of its COVID vaccine (which had been the highest of any), and public outcry from doctors led at least one Shkreli Award winner who failed to disclose financial conflicts of interest to resign from her position. 

We’d be remiss not to acknowledge the importance of independent journalism in holding health-care actors accountable. The Shkreli Awards would not be possible without the courageous reporters who root out and write about these wrongdoings. 

Despite all we’ve seen, we’re not pessimistic. We believe a radically better health-care system is possible, but we can’t get there by being shy about calling out bad behavior. As our founder, physician Bernard Lown, said, “Those who see the invisible can do the impossible.” The Shkreli Awards have helped to illuminate aspects of health care that have remained hidden for too long. We hope that by uncovering them, we support the creation of a truly equitable and healing health system.

At the Lown Institute, a Massachusetts-based think tank that advocates for improvement in the U.S. health system, Judith Garber is health policy and communications fellow and Shannon Brownlee is special adviser to the president.

This story appears in the July 2021 issue of National Geographic magazine.

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