Texan hedge fund manager J. Kyle Bass, the founder of Dallas-based Hayman Capital Management, doesn’t feel sorry for big pharma.

“Cry me a river,” Bass said at the Vanity Fair New Establishment Summit in San Francisco on Wednesday. “You have drug companies that have margins greater than that of Google.”

Bass pointed out that many of these companies didn’t even invent the drug they’re marketing. Instead, they bought the rights and have raised the price every year.

Recently, a lot of ire has been directed at Mylan (MYL) over its massive price increase for the EpiPen — a device that delivers life-saving medicine to those suffering from an allergic reaction. The EpiPen costs $600 for a pack of two.

More than a year ago, Bass used Mylan and its EpiPen as an example of a drug company with dubious pricing.

“EpiPen fell off patent back during the Vietnam War,” he said at the Vanity Fair event. “The only thing that really protects the EpiPen is four patents surrounding the retractable needle. So the medicine itself is not patented.”

Mylan is not the only drug company that’s raised prices or caught the attention of Bass.

Bass, who’s famous for his bet against the subprime housing market, has been battling big pharma, challenging the validity of the most egregious drug patents. It’s what he’s called a “David and Goliath” fight.

“Challenging what I deem to be dubious patents just sounded like fun to me. And, I had enough capital and enough time at the time to kind of challenge some of the worst,” he said at the Vanity Fair summit.

In early 2015, Bass formed the Coalition For Affordable Drugs with the goal of going after the drug companies that he saw as the most egregious examples of those extending their patents at the expense of Medicare and Medicaid and American consumers and patients.

Soon after, CFAD and Bass began filing inter partes review petitions (IPRs), a procedure that challenges the validity of a patent before the US Patent Trial and Appeal Board, part of the US Patent and Trademark Office. For a while, he had been betting against the companies’ stocks as part of an “activist short strategy.” He returned most of the money from that separate investment vehicle earlier this year and is now just executing the strategy pro bono without shorting the stocks.

Bass gave his lawyers a challenge to find the worst patent possible that he would go after personally. They ended up finding two.

One of those targets was Suprenza, a weight-loss drug for obese patients. He noted that the patent was extended only for blue speckles on the white pill, which are actually colored granules of a water-soluble sugar.

“The irony is it’s a diet pill and the specks were sugar granules. In our patent challenge we wrote obviously no one at the Patent Office has ever chewed Tutti Frutti gum,” Bass said.

Bass won the Suprenza IPR last week after the patent owner failed to respond to his petition.

Another target is Propofol, an injectable medicine commonly used in surgery that’s also listed as an essential medicine by the World Health Organization. Bass explained that the only thing protecting the patents is the siliconized rubber stopper.

“It’s un-effing believable that these things exist.”

—
Julia La Roche is a finance reporter at Yahoo Finance.

Read more:

A top central banker once told me something he’d never say publicly

Kyle Bass warns the clock is ticking for China’s banking system

Short-seller Jim Chanos explains why being short is actually about being long

Jim Chanos uses this 7-point checklist for companies he’s going to short