Pharma CEO Martin Shkreli Takes 5th Amendment, Infuriates Lawmakers

WASHINGTON (CBSNewYork/AP) -- Pharmaceutical chief Martin Shkreli refused to testify Thursday in an appearance before U.S. lawmakers over severe hikes for a drug sold by a company that he acquired, yet even without answering questions, managed to leave them infuriated.

Shkreli, widely scorned for hiking the price of a long-established and potentially lifesaving drug by more than 5,000 percent, exercised his Fifth Amendment right against self-incrimination when he went before the House Oversight and Government Reform Committee.

Shkreli appeared to smirk throughout his hour-long appearance. Four times the brash entrepreneur and former hedge fund manager 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.''

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 the lecture.

"I know you are smiling, but I am very serious, sir,'' Cummings said. "I truly believe you can become a force of tremendous good. All I ask is that you reflect on it. No, I don't ask, I beg that you reflect on it."

Shkreli was dismissed less than an hour into the hearing, but not before Chairman Rep. Jason Chaffetz, R-Utah, shouted down a request by Shkreli's attorney to speak. Lawmakers, instead, took turns denouncing his conduct and attitude.

Attorney Ben Brafman attempted to explain his client's behavior.

"Some of what you saw was nervous energy," he said, "Mr. Shkreli is not a villain. He's not the bad boy. I think at the end of this story he's the hero."

Shkreli gained notoriety after a drug company he founded, Turing Pharmaceuticals, spent $55 million for the U.S. rights to sell a life-saving medicine called Daraprim and promptly raised the price from $13.50 to $750 per pill.

As CBS2's Mark Albert reported, Shkreli didn't leave Capitol Hill without taking a parting shot at lawmakers.

Minutes after Shkreli walked out of the room Thursday, a message appeared on his official Twitter account saying, "Hard to accept that these imbeciles represent the people in our government.''

Cummings, attributing the message to Shkreli, boiled over. "There are very real issues for people with compromised immune systems,'' he thundered as he asked Turing executive Nancy Retzlaff to interpret the message on Shkreli's Twitter account.

California Democrat Ted Lieu, a member of the panel that called Shkreli to Capitol Hill, also responded on Twitter, CBS News reported.

"You know what's sort of cool @MartinShkreli? That I represent the people and you are under federal indictment," he said.

Shkreli faces separate criminal charges of securities fraud in connection with another drug company he owned. He pleaded not guilty after his arrest in December in New York and has been out on $5 million bail.

PHOTOS: Martin Shkreli Busted For Securities Fraud

Prosecutors allege that after he lost investors' money through bad trades, he looted Retrophin, another pharmaceutical company where he was CEO, for $11 million to pay back his disgruntled clients.

Also appearing before the lawmakers Thursday was Turing's chief commercial officer and the interim CEO of Canada's largest drugmaker, Valeant Pharmaceuticals.

Documents from Valeant and Turing show they have made a practice of buying and then dramatically raising prices for, low-cost drugs given to patients with life-threatening conditions including heart disease, AIDS and cancer, according to excerpts released this week by the House panel.

The two companies' executives insisted they were committed to ensuring that cost isn't a deterrent for patients who need the drugs.

With Shkreli mum, it was up to Retzlaff to defend the Daraprim price rise. She said about 3,000 people are treated by Daraprim, and only 25 percent are covered by commercial insurance. She added that the overall impact of the drug on the budget of commercial health plans "is very, very small.''

Documents show how executives at both companies planned to maximize profits while fending off negative publicity over the price hikes.

Presentations by Turing executives, part of the trove of documents obtained by the 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 and swiftly raised its price.

Shkreli said in an email 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.''

But anticipating a possible backlash, the company warned in an internal memo that advocates for HIV patients might react to the price hike.

Shkreli had appeared unapologetic in interviews.

"With these new profits we can spend all of that upside on these patients who sorely need a new drug, in my opinion," he said.

Valeant likewise identified revenue goals first and then used drug prices to reach them, committee staff said in a memo. It said Valeant believed it could repeatedly raise the prices of Nitropress and Isuprel without repercussions because they're administered by hospitals, which are less price-sensitive than consumers.

Valeant used patient assistance programs to distract that attention and justify its price hikes, according to the memo.

(TM and © Copyright 2016 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2016 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

In:
• Martin Shkreli