Snowstorm Gives Martin Shkreli More Time to Battle His Subpoena to Appear Before Congress
January 25, 2016
By Alex Keown, BioSpace.com Breaking News Staff
NEW YORK – A snowstorm that shut down much of the east coast over the weekend turned out to be a bit of a blessing in disguise for Martin Shkreli, the former pharmaceutical entrepreneur under federal indictment for securities fraud.
The storm, which dropped about two-feet of snow from Baltimore, Md. to New York City, shut down much of the federal government and has caused a Congressional committee to delay a hearing on prescription drug prices, for which it had subpoenaed Shkreli, from Jan. 28 to Feb. 5.
The congressional committee subpoenaed Shkreli to testify about his former company’s decision to increase the price of Daraprim, a treatment for the parasitic toxoplasmosis, by 5,000 percent, Business Insider reported. Shkreli was served with a subpoena to appear before the U.S. House of Representatives' Committee on Oversight and Government Reform on Jan. 26. In typical Shkreli fashion, he tweeted “House busy whining to healthcare reporters about me appearing for their chit chat next week. Haven’t decided yet. Should I?” He also posted an image of the subpoena on his Twitter feed with the caption “Found this letter. Looks important.”
Shkreli retweeted U.S. Sen. Susan Collins, a Main Republican, who announced that Shkreli had invoked his Fifth Amendment privileges, which allows a witness to decline to answer any questions that may incriminate themselves in a court of law.
In addition to Shkreli, Congress called several other witnesses to testify, including Howard Schiller, the interim chief executive officer at Valeant Pharmaceuticals ; Nancy Retzlaff, chief commercial officer at Turing Pharmaceuticals, the company founded by Shkreli; Janet Woodcock, director of the Food and Drug Administration’s Center for Drug Evaluation and Research; and Mark Merritt, chief executive officer of the trade group Pharmaceutical Care Management Association, Bloomberg reported.
Valeant is facing scrutiny from U.S. lawmakers and two U.S. attorney’s offices over pricing of drugs acquired through acquisitions. Valeant is under fire for a price increase of two recently-acquired cardiac drugs, Nitropress and Isuprel, after the company acquired Salix Pharmaceuticals , Ltd. Valeant then increased the prices for those drugs by 212 percent and 525 percent, respectively.
In addition to the snowstorm delaying the congressional committee, Shkreli will also have to seek judicial approval to travel to Washington. According to a Reuters report, Shkreli faces a court-ordered restriction on travel, requiring him to remain in the state. He is allowed to seek a waiver on the restrictions. Shkreli’s attorneys sent a letter to U.S. District Judge Kiyo Matsumoto in Brooklyn last week, although it did not seek a travel waiver. Instead, his attorneys said that if Shkreli is not allowed to leave New York state, then they were requesting the court accept the “letter as a motion to quash or to stay the subpoena," Reuters reported.
In multiple interviews and on his Twitter feed, Shkreli has said the federal government does not understand how pharmaceutical pricing works.
The subpoena came at a time right after Shkreli began searching for new legal representation in the seven federal charges for securities fraud stemming from his time as a hedge fund manager and during his stint as chief executive officer of Retrophin Pharmaceuticals . The seven count indictment against Shkreli included multiple charges of securities fraud, securities fraud conspiracy and wire fraud conspiracy. In August Retrophin sued Shkreli for $65 million over his use of company funds while helming that company. In its lawsuit, Retrophin said Shkreli breached his duty of loyalty to the biopharmaceutical company and he engaged in self-dealing and also seeks disgorgement of money paid to him. Retrophin said Shkreli used company funds for personal use, enriched himself through false consulting contracts and referred to Shkreli as “the paradigm faithless servant” who “is not entitled to compensation or post-separation benefits.”