Martin Shkreli Takes the Fifth Before Congress
February 04 2016 - 11:00AM
Dow Jones News
WASHINGTON—Former pharmaceutical executive Martin Shkreli, who
prompted a public outcry last year for raising the price of a
lifesaving medication, asserted his Fifth Amendment right not to
testify Thursday before a House committee probing escalating drug
costs.
His appearance marked the end of weeks of negotiation over
whether he would attend the hearing between the committee and Mr.
Shkreli's lawyers, as well as a barrage of tweets from Mr. Shkreli
that criticized lawmakers. He claimed he was being asked to come to
the hearing merely to help Congress score political points or
provide entertaining theater.
Pressed by one committee member to answer some questions that
wouldn't incriminate himself, Mr. Shkreli said: "I intend to follow
the advice of my counsel, not yours."
Mr. Shkreli was escorted out of the hearing, about 50 minutes
after it started, when he made it clear he wouldn't answer any
questions. Rep. John Mica (R., Fla.) threatened to hold Mr. Shkreli
in contempt for refusing to testify, but Rep. Jason Chaffetz (R.,
Utah), who is the committee's chairman, indicated he wouldn't seek
a contempt finding.
The hearing is part of the probe by the House Committee on
Oversight and Government Reform, which is investigating causes and
solutions to sharp cost increases in drug prices.
Canadian-based Valeant Pharmaceuticals International Inc.
purchased two long-standing drugs that treat heart problems—Isuprel
and Nitropress—from privately held Marathon Pharmaceuticals LLC and
then raised their prices by 525% and 212%.
Howard Schiller, interim chief executive of Valeant, said the
company would raise drug prices in the future "within industry
norms, and much less than" it had for Isuprel and Nitropress.
Mark Merritt, president and chief executive of the
Pharmaceutical Care Management Association, warned lawmakers
against price controls on drug products and limits on patient cost
sharing. His group represents pharmacy-benefit managers, which are
third-party administrators such as Express Scripts Holding Co. and
CVS Health Corp. The managers oversee prescription drug program,
negotiate drug costs on behalf of employers and health plans and
attempt to get discounts from drugmakers.
Limiting how much patients must pay out of pocket for
prescription drugs will allow pharmaceutical companies to raise
prices and pass those costs along to employers and governments,
according to his testimony.
Some states already have taken steps to limit cost sharing.
California, for example, requires health plans sold on their
state-run exchange to comply with a monthly cap. Other states have
taken similar steps.
Congressional probes into rising drug prices have picked up as
more pharmaceutical companies have raised the prices of drugs after
acquiring the rights to sell them in the U.S. Memos released by
Democrats on the committee indicated that Valeant and Turing
Pharmaceuticals AG set profit targets and then raised the price of
newly acquired drugs to meet them.
The committee subpoenaed Mr. Shkreli, the former CEO of Turing
Pharmaceuticals AG when it bought the U.S. rights to an
anti-parasite drug called Daraprim and increased its price more
than 50-fold. Mr. Shkreli resigned as Turing CEO after his arrest
on securities fraud charges, which he denies.
The hedge-fund manager bought Turing and then increased the
price of Daraprim, a drug that treats a parasitic infection, from
$13.50 to $750 a pill. After a public and political outrage, he had
pledged to lower the price but instead opted to grant a discount to
hospitals that still resulted in a sharp increase in the cost of
the drug.
Mr. Shkreli has been active on social media, tweeting on Jan. 22
"you want me to go to DC to just say 'I plead the 5th?" for your
entertainment?"
Nancy Retzlaff, chief commercial officer at Turing
Pharmaceuticals LLC, which was the company that Mr. Shkreli ran,
did appear Thursday. She said that patients didn't pay the list
price for Daraprim—in fact, most patients paid just pennies a
pill.
Prescription drug spending rose more than 12% in 2014 in the
U.S., the biggest annual increase in more than a decade, according
to a report by Express Scripts.
Write to Stephanie Armour at stephanie.armour@wsj.com and
Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com
(END) Dow Jones Newswires
February 04, 2016 10:45 ET (15:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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