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Drug company boss Martin Shkreli refuses to testify to Congress Drug company boss Martin Shkreli refuses to testify to Congress
(about 2 hours later)
Martin Shkreli, the pharmaceutical boss dubbed “the most hated man in America” for increasing the price of an HIV drug by 5,000%, refused to testify on Thursday in an appearance before US lawmakers who excoriated him over severe hikes for a drug sold by a company that he acquired. Pharmaceutical entrepreneur Martin Shkreli threw insults at the US Congress on Thursday, less than an hour after refusing to testify at a hearing investigating accusations of profiteering on life-saving drugs sold by his and other drug companies.
Twenty-four hours after facing fraud charges in a federal court in Brooklyn, Shkreli, 32, turned up in Washington after being subpoenaed by the House of Representatives oversight committee.
Related: Pharmaceutical (and Wu-Tang) villain Martin Shkreli has courted controversyRelated: Pharmaceutical (and Wu-Tang) villain Martin Shkreli has courted controversy
Shkreli, widely scorned for hiking the price of a long-established and potentially lifesaving drug, exercised his fifth amendment right against self-incrimination when he went before the House oversight and government reform committee. The controversial entrepreneur was accused of taking “blood money” from Americans and refused to answer questions. Minutes after being released from the hearing, Shkreli posted on Twitter: “Hard to accept that these imbeciles represent the people in our government.”
Elijah Cummings, the top Democrat on the panel, berated Shkreli: “I call this money blood money … coming out of the pockets of hardworking Americans,” he said. The firm Shkreli created and ran until his arrest in December, Turing Pharmaceuticals, is under fire for hiking the price of the drug Daraprim by more than 5,000% overnight, from $13.50 to $750 a pill, after acquiring it from another company.
The lawmakers summoned him to answer for the decision that made him infamous: raising the price for Daraprim, the only approved drug for a rare and sometimes deadly parasitic infection. Shkreli had already warned that he intended to invoke the fifth amendment and decline to answer questions in order to avoid the risk of incriminating himself.
The brash entrepreneur and former hedge fund manager, who pleaded not guilty after his arrest in December in New York on charges of wire and securities fraud, has been out on $5m bail. He walked into the packed hearing room well before the session began and met the crush of cameras. Even a few members of the House panel were swept up in the curiosity and snapped Shkreli’s photo on their cellphones. He wore a sport jacket and button-down shirt, conservatively preppie attire. Nonetheless, Shkreli’s short appearance in Washington became explosive when committee members were infuriated by his discourteous facial expressions as the event unfolded. One member begged him to examine his conscience.
Also appearing before the lawmakers were Turing’s chief commercial officer and the interim CEO of Canada’s largest drugmaker, Valeant Pharmaceuticals. Documents from Valeant and Turing show they have made a practice of buying and then dramatically raising prices for low-cost drugs given to patients with life-threatening conditions including heart disease, Aids and cancer, according to excerpts released this week by the House panel. Earlier, Shkreli and Turing’s chief commercial officer, Nancy Retzlaff, were criticized for hiking the price of Daraprim despite the fact it is the only government-approved treatment for the rare infection toxoplasmosis, which can be fatal for some Aids and cancer patients and endangers babies in-utero.
Lawmakers released excerpts from 250,000 documents showing how Shkreli sought to make his former company, Turing Pharmaceuticals, $1bn from buying up the 62-year-old anti-parasite drug on the cheap. Lawmakers released excerpts from 250,000 documents showing how Shkreli sought to make $1bn from buying up the 62-year-old anti-parasite drug.
“Very good. Nice work as usual. $1bn here we come,” he said in an email to the company’s chairman as he worked to buy Daraprim for $55m in 2015. “Very good. Nice work as usual. $1bn here we come,” he said in an email to the company’s chairman as he worked to buy Daraprim for $55m in 2015. Shkreli said hiking the price of the drug would bring in an extra sales of $375m, “almost all of it profits”.
Shkreli said hiking the price of the drug, which is used to treat toxoplasmosis in patients with compromised immune systems, would bring in an extra sales of $375m, “almost all of it profits”.
“Should be a very handsome investment for all of us,” he said. “Let’s all cross our fingers that the estimates are accurate.”“Should be a very handsome investment for all of us,” he said. “Let’s all cross our fingers that the estimates are accurate.”
The committee’s ranking Democrat member, Maryland congressman Elijah Cummings, called the revenue made from selling Daraprim “blood money”.
Cummings said that since acquiring Daraprim last August, Turing took in $98m in revenue from the drug, while its manufacture cost only $1m. He said Turing cited $22m spent on research and development but that documents acquired by the committee showed those outgoings were “as much about public relations as about research”.
“It’s not funny, Mr Shkreli. People are dying,” Cummings said, as Shkreli shot him a smirk.
Committee chairman Jason Chaffetz, a Utah Republican, then asked Shkreli: “What do you say to a single, pregnant women on low income who might have Aids and she needs Daraprim to survive?”
Shkreli, 32, solemnly leaned into the microphone.
“On the advice of counsel, I invoke my fifth amendment privilege against self incrimination and respectfully decline to answer your question,” he said.
Sitting directly behind Shkreli was his new counsel, Ben Brafman, the high-profile New York lawyer Shkreli recently picked to represent him in his fraud case.
Shkreli repeated his response to the next two questions from Chaffetz.
Republican committee member Trey Gowdy, of South Carolina,asked the witness about his name. “Is it pronounced Sh-kr-ellie?” he asked. “Yes, sir,” replied Shkreli. Gowdy pounced.
“See, you can answer some questions. That one did not incriminate you. I just want to make sure you understand you are welcome to answer questions where the answers will not incriminate you, not every disclosure can be subject to the fifth, only those you reasonably believe can be used in criminal prosecution,” he said.
The FBI is investigating financial transactions at a pharmaceutical company and a hedge fund Shkreli ran prior to starting Turing. He is accused in the federal criminal case also of running a Ponzi scheme at a prior pharmaceutical firm, Retrophin, and at a hedge fund he ran.
Democratic presidential candidates Hillary Clinton and Bernie Sanders have accused Turing of price-gouging. Sanders posted on Twitter on Thursday that America is fed up with “blatant profiteering” by the likes of Shkreli.
Cummings in his opening address had referred to Shkreli’s purchase at auction in December of a one-off Wu-Tang Clan album for $2m and contrasted it with his constituents who live “paycheck to paycheck, or even no check to no check”.
Cummings and other committee members pointed out that even with discounts on the price of Daraprim offered to some patients and hospitals following the uproar about Turing’s pricing last fall, that slack has to be picked up by taxpayers via Medicare and Medicaid, state governments or higher premiums for health insurance customers.
As Gowdy continued his attack, Brafman jumped to his feet from the public seating, where he was positioned directly behind Shkreli, and called out: “Mr chairman, may I be recognized for a moment?”
Brafman attempted to add something barely audible about being Shkreli’s attorney, but was cut off by Chaffetz, who said, sharply: “You are not recognized and you will be seated.”
Brafman sat down.
Cummings then expressly pleaded with Shkreli to reflect on his company’s strategy and instead of being “the bad boy of pharma” who could go down in history as “the poster boy for greedy drug companies”, he could help reform the system with fairer pricing.
Shkreli laughed. He did not answer any more questions and shortly after was allowed to leave the hearing.