Congress Subpoenas Martin Shkreli to Testify About Drug Pricing, Shkreli May Plea the Fifth
Published: Jan 22, 2016
January 21, 2016
By Alex Keown, BioSpace.com Breaking News Staff
NEW YORK – Martin Shkreli’s troubles continue. In addition to the federal securities fraud charges he faces, the former entrepreneur and pharmaceutical head received a subpoena to appear before a congressional committee investigating the price of prescription drugs, Bloomberg reported this morning.
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.”
Rep. Elijah Cummings of Maryland, the top Democrat on the House committee, told Bloomberg he has been trying to get Shkreli to talk about his “outrageous price increases.” Cummings also said that Shkreli has “obstructed our investigation at every turn.”
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.”
Shkreli gained notoriety in September after he increased the price of Daraprim, a toxoplasmosis treatment, by 5,000 percent. Shkreli’s Turing acquired the drug in August for $55 million. The cost of Daraprim jumped from $13.50 per pill to $750, which sparked an outrage across the country and ignited a firestorm among politicians who began decrying the high price of prescription medications.
In addition to Shkreli, the U.S. House of Representatives' Committee on Oversight and Government Reform also asked for documents about drug pricing from Valeant Pharmaceuticals , Bloomberg said. 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. Valeant acquired the two drugs in April. In addition to the two cardiac drugs, Valeant has also been criticized for quadrupling the price of the 55-year-old drug Cuprimine, used in the treatment of Wilson disease.
Valeant’s interim chief executive officer, Howard Schiller, will testify at the hearing, Bloomberg reported.