A former U.S. pharmaceutical business executive has angered lawmakers by refusing to explain why he raised the price of a life-saving pill by 5,000 percent.
Martin Shkreli was removed from a congressional hearing on Thursday after citing his Fifth Amendment right to stay silent. The 32-year-old received a subpoena to appear before the hearing after his former company, Turing Pharmaceuticals, raised the price of Daraprim, the drug used for treating AIDS and certain types of cancer, from $13.50 to $750 per pill.
When the price for Daraprim went up sharply in August of last year, the general public, politicians and even industry officials reacted with outrage. The price was increased shortly after Turing, under Shkreli's leadership, bought the patent for the drug. U.S. lawmakers and the Federal Trade Commission are now investigating whether the company violated anti-trust laws.
On Wednesday, Shkreli refused to cooperate.
"On the advice of counsel, I invoke my Fifth Amendment privilege against self-incrimination and respectfully decline to answer your question," Shkreli said.
Furthermore, the former hedge fund manager appeared to be smirking at lawmakers, which prompted his removal from the hearing.
Shkreli's lawyer later tried to justify his behavior.
"Some of what you saw was nervous energy by an individual who very much would like to explain what happened, but has agreed to listen to his lawyer," Shkreli's attorny, Ben Brafman, said.
But Shkreli's Twitter message later in the day showed only contempt for Congress.
"He had a wonderful opportunity to do what he said he wanted to do, which was educate Congress on drug pricing and he skipped it. So, I guess he wasn't all that interested in educating us after all," Representative Trey Gowdy of South Carolina said.
Turing and other companies selling expensive drugs say much of the revenues are invested in research and development of new life-saving drugs. Asked about the morality of making the Daraprim price unaffordable to many critically ill patients, a Truing representative said the company also invests in "patient access programs."
"We didn't want the price increase to disadvantage patients in any way," Turing's Nancy Retzlaff said.
But some lawmakers came well prepared to reject such claims.
"They (the pharmaceutical companies) will downplay their massive profits by claiming that they help patients who can't afford their exorbitant prices. The testimony from the drug companies today will be the same. But the difference now is that we've seen behind their smoke screen," Representative Elijah Cummings of Maryland said.
Analysts say Shkreli's behavior will hurt the U.S. pharmaceutical industry.
"I think it definitely angered a lot of people. And, what's unfortunate is this is going to raise calls for price control in pharmaceuticals more generally," said Yevgeniy Feyman of the Manhattan Institute.
Shkreli is facing charges of securities fraud in two other companies.