Ex-Drug Executive Shkreli Invokes Fifth Amendment Before Congress

By Sarah N. Lynch and David Ingram, Reuters

04 February 16

ormer drug executive Martin Shkreli laughed off questions about drug prices and tweeted that lawmakers were imbeciles on Thursday, when he appeared at a U.S. congressional hearing against his will.

Shkreli, 32, sparked outrage last year among patients, medical societies and Democratic presidential front-runner Hillary Clinton after his company, Turing Pharmaceuticals, raised the price of 62-year-old Daraprim by more than 5,000 percent to $750 a pill.

The lifesaving medicine, used to treat a parasitic infection, once sold for $1 a pill.

At a hearing of the U.S. House Committee on Oversight and Government Reform, Shkreli repeatedly invoked the Fifth Amendment of the U.S. Constitution, which says no person shall be compelled in any criminal case "to be a witness against himself."

Wearing a sport jacket and collared shirt rather than his usual T-shirt, he responded to questions by laughing, twirling a pencil and yawning.

Committee Chairman Jason Chaffetz, a Utah Republican, asked Shkreli what he would tell a single, pregnant woman with AIDS who needed Daraprim to survive, and whether he thought he had done anything wrong. Shkreli declined to answer.

"I intend to follow the advice of my counsel, not yours," said Shkreli after South Carolina Republican Representative Trey Gowdy suggested he could answer questions that were unrelated to pending fraud charges against him.

After the hearing, Shkreli's lawyer, Benjamin Brafman, attributed his client's behavior to "nervous energy."

Later, though, Shkreli wrote on Twitter: "Hard to accept that these imbeciles represent the people in our government."

U.S. Representative Elijah Cummings, who learned about the tweet while Turing Chief Commercial Officer Nancy Retzlaff was testifying, pounded his fist on the dais. The Maryland Democrat then shouted about an internal Turing document in which a staffer joked about the price increase.

"You all spent all of your time strategizing about how to hide your price increase ... and coming up with stupid jokes while other people were sitting there trying to figure out how they were going to survive," Cummings said.

Shkreli was arrested in December and charged with running his investment funds and companies almost like a Ponzi scheme. He has pleaded not guilty to the fraud charges, which are not related to the pricing of Daraprim. He also stepped down from Turing and was fired from KaloBios Pharmaceuticals Inc.

Cummings pleaded with Shkreli to reconsider his views about drug pricing: "You can go down as the poster boy for greedy drug company executives, or you can change the system."

At one point, Brafman asked to address the committee, but Chaffetz said no.

Shkreli was allowed to leave the hearing early after he repeated that he would not answer any questions.

'Such Contempt'

Representative John Mica, a Florida Republican, said he would consider asking fellow lawmakers to hold Shkreli in contempt for his behavior.

"I don't think I've ever seen the committee treated with such contempt," Mica said.

Brafman said Shkreli would have liked to discuss drug pricing but had no choice, given the criminal charges against him.

Also at the hearing, Valeant Pharmaceuticals Inc interim CEO Howard Schiller put forward a conciliatory face, testifying that his company had changed its business and pricing tactics.

"Where we have made mistakes, we are listening and changing," Schiller said during opening remarks. "In a number of cases, we have been too aggressive" about price increases.

Valeant shares rose more than 5 percent during the hearing.

Retzlaff testified that Turing acquired Daraprim because it was "priced far below its market value" and is committed to investing revenue into new treatments.

The Federal Trade Commission and the New York attorney general are investigating Turing for possible antitrust violations.