How Martin Shkreli Is ‘Trashing’ the Pharma Industry
Martin Shkreli showed up in Washington, suit clad, seemingly ready to face the House Committee on Oversight and Government Reform as part of Thursday’s hearing on drug prices. What followed was…silence.
Shkreli was asked a series of questions regarding the 5,000% price increase for life-saving treatment Daraprim, which he enacted at his former company, Turing Pharmaceuticals. He declined to answer a single question, smirking throughout the session and invoking his Fifth Amendment right to remain silent.
“It’s not funny, Mr. Shkreli,” said Representative Elijah Cummings, a Democrat from Maryland, who requested the hearing. “People are dying. They are also getting sicker and sicker.”
Shkreli still didn’t respond to questioning. His only reflection on the event came via Twitter shortly after leaving.
Despite Shkreli’s nonchalance, the environment in the hearing was heated as lawmakers ranted about the out-of-control drug price increases on a series of off-patent drugs. The hearing, which was called by the House oversight committee, was attended by a representative for Turing, Chief Commercial Officer Nancy Retzlaff, as well as Valeant Pharmaceutical (VRX) interim CEO Howard Schiller, both of whom answered questions about their companies. The straightforward answers, at least in most cases, still didn’t tamp down the anger some lawmakers felt.
“You’re trashing the pharmaceutical industry, which is doing some great work,” said Representative Stephen Lynch, a Democrat from Massachusetts. “You’re going to cause us to put heavy heavy regulations on other companies and possibly choke off other important drugs. Look at the impact you’re having.”
For the most part, both Retzlaff and Schiller answered questions succinctly, though Retzlaff often put off answers saying she wasn’t sure and would have to get back to the committee. That included her not knowing that Shkreli is still Turing’s largest shareholder. She had earlier in the hearing said that he was “one of our shareholders” and eventually admitted to knowing he was “a major shareholder.”
Schiller, when asked about Valeant’s move to drastically raise the prices of two of its off-patent heart medications, admitted that they company had previously pursued a business plan that included buying off-patent medications that lacked generic competition and raised the prices to maximize profit. Schiller confirmed that nearly 80% of Valeant’s growth in the first quarter of 2015 came from these prices increases rather than expanded market share. Though, he said that the company is abandoning that method now.
“We were too aggressive,” said Schiller. “We won’t be looking for those drugs in the future.”
The conciliatory tone didn’t calm lawmaker’s heated tones, which continued through the end of the two-hour session. Many continued to voice their concerns about a “broken market” when it comes to drug pricing, raising the specter of increased governmental regulation–a move that many pharmaceutical companies have said would curb innovation.
“We have market power without competition, most glaringly represented by Mr. Shrkeli. Let’s have transparency in pricing. There’s so much talk about what goes into research, but the bottom line here is we know prescription drugs are life extending and pain releiving, but we are getting killed by the price,” said Representative Welch, a Democrat from Vermont. “Bottom line here is we have a broken market.”