Forbes list

By the mid-1980s Frost, still a practicing dermatologist, was being listed by Forbes magazine as one of the wealthiest 400 in the country.

In 1986, Schering-Plough, a New Jersey pharmaceutical giant, bought Key for about $800 million. Frost, the largest shareholder, received about $100 million from the deal, Jaharis about $90 million.

The next year, Frost merged three small companies into an already existing publicly traded company, a New Jersey chemical firm named IVACO Industries. He redubbed the company IVAX and began developing new drug lines. Ambitious plans to develop new brand name drugs, however, did not work out and Frost saw opportunities in the new world of generics.

“For me, the fun is to build, not to manage,” says Frost. He sums up his business philosophy as searching for “what’s available, what is possible to do. That’s the overriding consideration. There are a lot of things I would have liked to do, but didn’t have the means.”

Frost seized opportunities overseas. “We became a major player all over Latin America and Central and Eastern Europe. It would be 10 to 15 years before any of the [other] large U.S. generic companies would take any interest in expanding outside the United States.”

Frost finally stopped working as a dermatologist in 1990 as IVAX continued to grow and prosper until the mid-1990s, when it was hammered by stiff competition from generic competitors. It lost $160 million in 1996, $233 million in 1997. The stock, riding high at about $50 in the early 1990s, fell to $12.

Frost sought to right the ship by making a huge deal, agreeing to pay $1.6 billion for Bergen Brunswig, a pharmaceutical wholesaler, to “pick up an extra layer of profit” by distributing IVAX’s own drugs. “What we didn’t anticipate was that the drug chains would dump us because they were threatened,” fearing that an IVAX wholesaler would provide the same low prices to independent pharmacies, heightening competition for the chains.

Frost backed out of the deal.

Losses kept mounting. Frost led a major restructuring, with layoffs, plant closings and the sale of unprofitable subsidiaries while forging ahead with lengthy FDA battles to get approval for the first generic time-release drug and the first generic inhaler.

IVAX profitability soared. In 2005, the Jerusalem-based Teva Pharmaceutical Industries brought IVAX for $7.4 billion. Frost’s take was about $1.1 billion.

At 69, Frost didn’t even consider retiring. He says he’s constantly being sent investment opportunities, and he jumps at what he likes. Frost and close associates now own the second largest billboard company in China. He’s also become the largest shareholder in Vector Group, a Miami company that makes several brands of cigarettes. (He says the company also has other products.)

His main undertakings are as chairman of Ladenburg Thalmann, an investment bank, and chief executive of OPKO Health, a pharmaceutical company that started specializing in ophthalmology research drugs. When they didn’t pan out, he broadened into buying other pharmaceutical companies, including ones in Chile and Spain. OPKO’s main long-term hope is a system that could provide early detection of Alzheimer’s and other diseases.

Short term, OPKO plans next year to market what it says is a more accurate prostate test that is likely to save huge sums on unnecessary biopsies. On CNBC’s Mad Money, Cramer talked about how this test was a great example of slashing healthcare costs envisioned by the Affordable Care Act.

Through all this, Frost goes daily to his 15th floor office overlooking the bay and Miami Beach. He built the structure at 4400 Biscayne Blvd. when he led Key Pharmaceuticals, then bought it back and sold it to IVAX. When he sold IVAX, Frost again repurchased the building, this time for $18 million, according to county property records.

The building now houses OPKO and Ladenburg Thalmann, but large IVAX signs are still atop the structure. Frost says they’re expensive to take down. “Besides, it’s become known as the IVAX building,” although the company has ceased to exist.

He does spend money happily on other pursuits. Some years ago, he bought a jet with gold-plated bathroom fixtures that once belonged to casino magnate Steve Wynn. That’s been replaced by a larger Airbus ACJ319, which sells for about $60 million.

For years, the Frosts lived in homes on San Marino and Hibiscus islands, where they filled the walls with American Abstract paintings from the 1930s and 1940s until they had “no more room on the walls,” says Patricia.

That art produces one of those classic stories of how much chance meetings and personal contacts matter to Frost. About the time they decided they wanted to change their art collection and find a new home for the American Abstracts, Frost happened to meet a professor of dermatology whose son was married to a woman who worked at the Smithsonian in Washington. Frost told the professor they were interested in giving away more than 100 paintings. The Smithsonian called quickly.

“The following week we had a deal,” he says. Patricia has served on the Smithsonian board, alongside the U.S. vice president and congressional leaders.

Sprawling estate

They moved to Star Island in 2001, combining two adjoining sites, including one previously owned by Leona Helmsley, to make a sprawling six-acre estate with a six-bedroom, eight-bath classic-style manse for a total estimated value of $52 million.

Jaharis, his partner from the Key days, says they’ve created “more like a museum than a house,” bringing over 50 Italian craftsmen for two years to install the marble on the property. Frost says that 50 might be an exaggeration, and they were installing several types of Italian stones. The art in the house, he says, consists of “European masters.”

Also on the property: a large greenhouse that contains more than 100 types of palms gathered from around the world. “He spends a lot of time in that garden,” says Richard Pfenniger, a longtime Frost executive. Frost says he gets there almost daily, often weeding on his hands and knees.

The Frosts also own a $7 million apartment overlooking Central Park in Manhattan and “a flat” in London. Patricia Frost also travels frequently to meetings of the Florida Board of Governors that oversees the state’s university system.

A registered Democrat, public records indicate Frost gave $200,000 to groups supporting Republicans in the 2012 election. “It was a lot more than that,” Frost says, but won’t reveal the amount. And what did he think of the outcome? “I can only hope for the best.”

Art of giving

The art museum at Florida International University is named after the Frosts, thanks to a $2 million donation. So is the UM Music School, after a $33 million donation. And they’ve pledged $35 million for the new Miami Museum of Science, which will also bear their name when it’s finished.

“He has no children,” says Jaharis, his longtime Key colleague and still a close friend. “What are you going to do? You can’t take it with you.”

In April 2011, the Frosts signed a pledge, initiated by Warren Buffett and Bill Gates, to give away at least half their fortune.

“We need to step it up,” Frost said recently, during an interview in his Star Island greenhouse. He said they plan to focus on education, on both state and international levels.

Patricia, an educator for three decades, added: “We both have some ideas.”