Lawmakers on Thursday lashed out at former pharmaceutical CEO Martin Shkreli, who invoked the Fifth Amendment and refused to testify about his decision to significantly raise the price of a lifesaving generic prescription drug.
Four times, the former hedge fund manager, who has been unapologetic about the price hikes, intoned before the committee, "On the advice of counsel, I invoke my Fifth Amendment privilege against self-incrimination and respectfully decline to answer your question."
A few representatives of the House Oversight Committee attempted to get answers. For about an hour before he was excused from the hearing, Shkreli smirked at the lawmakers and occasionally turned away while they were speaking.
“I don't believe I've ever seen the committee treated with such contempt,” said Rep. John Mica (R-Fla.).
Other lawmakers erupted in fury. Rep. Elijah Cummings of Maryland, the top Democrat on the committee, told the 32-year-old Shkreli to wipe the smirk off his face.
"I call this money blood money ... coming out of the pockets of hardworking Americans," he said, as Shkreli sat through his lecture. "I know you are smiling, but I am very serious, sir."
Before the hearing had ended, Shkreli had tweeted: “Hard to accept that these imbeciles represent the people in our government.” His feud with Congress has been mostly aired over Twitter, where he has posted flippant remarks about its attempts to get him to testify. He has said he was only being a good businessman.
Shkreli has since resigned as CEO of Turing Pharmaceuticals, which increased the price of the drug Daraprim overnight from $13.50 a pill to $750 a pill. Shkreli pleaded not guilty after his December arrest on charges of securities fraud involving another company he ran. He has been out on $5 million bail.
Presentations by Turing executives, part of the trove of documents obtained by the Congressional panel, show that as early as last May, the company planned to turn Daraprim into a $200-million-a-year drug by dramatically increasing its price. Turing bought the 60-year-old drug from Impax Laboratories in August for $55 million and swiftly raised its price.
Shkreli said in an e-mail to one contact: "We raised the price from $1,700 per bottle to $75,000. Should be a very handsome investment for all of us."
That move and other spikes in prices on generic drugs that have no competing brands sparked the hearing.
Nancy Retzlaff, chief commercial officer for Turing, testified that the company intends to use revenue from Daraprim to invest in research on toxoplasmosis, the parasitic infection it treats, that typically targets people with weakened immune systems, as well as other rare diseases.
She said the company has been dedicated to ensuring that every patient who needs the medication receives it, and that any access problems are because of gaps in distribution, not price. Retzlaff said about 3,000 people are treated with Daraprim, and only 25% are covered by commercial insurance. She added that the overall impact of the drug on commercial health plans' budgets "is very, very small."
But anticipating a possible backlash, the company warned in an internal memo that advocates for HIV patients might react to the price hike.
Turing's revenue is not exorbitant, Retzlaff said.
But Committee Chairman, Rep. Jason Chaffetz of Utah noted Turing's recent generous raises for several employees, as well as planned bonuses and expenses such as a cigar roller for “yacht night.” That information shows the company doesn't have a revenue problem, he said.
“Don't come before the country and shed a tear and say we're not making any money,” he said.
Also appearing before lawmakers was Howard Schiller, interim CEO of Valeant Pharmaceuticals International, which raised the price of two cardiac drugs frequently used in hospitals to treat heart problems. He was a little more apologetic about his company's actions. He said Valeant had made some mistakes, had been too aggressive, and that future price increases would be more modest.
“We're going to change,” he said. “We're going to be a responsible corporate citizen.”
Valeant likewise identified revenue goals first, and then used drug prices to reach them, committee staff said in a memo. The memo stated that Valeant believed it could repeatedly raise the prices of Nitropress and Isuprel without repercussions because the drugs are administered by hospitals, which are less price-sensitive than consumers.
Valeant used patient-assistance programs to justify its price hikes, according to the memo.
Rep. Buddy Carter (R-Ga.), a pharmacist himself, said he was “disgusted” by the “perverse business practices” of some of the witnesses. He later told Retzlaff that what she had done was “repulsive.”
Congress' potential course of action on the issue is still unknown. Cummings introduced legislation last year that would allow the HHS to negotiate drug prices under Medicare, ban drugmakers from paying generic manufacturers to delay bringing a generic to market, require companies to report information that determines drug prices, and allow drugs to be imported from Canada.
The Associated Press contributed to this report.