(Adds detail from hearing and legal expert quote)
By Sarah N. Lynch and David Ingram
WASHINGTON/NEW YORK Feb 4 Former drug executive
Martin Shkreli smirked and brushed off questions about drug
prices then tweeted that lawmakers were imbeciles on Thursday,
when he appeared at a U.S. congressional hearing against his
Shkreli, 32, sparked outrage last year among patients,
medical societies and Democratic presidential front-runner
Hillary Clinton after his company, Turing Pharmaceuticals,
raised the price of the drug Daraprim by more than 5,000 percent
to $750 a pill.
The lifesaving medicine, used to treat a parasitic
infection, once sold for $1 a pill and has been on the market
for more than 60 years.
At a hearing of the U.S. House Committee on Oversight and
Government Reform, Shkreli repeatedly invoked the Fifth
Amendment of the U.S. Constitution, which says no person shall
be compelled in any criminal case "to be a witness against
Wearing a sport jacket and collared shirt rather than his
usual T-shirt, he responded to questions by laughing, twirling a
pencil and yawning.
Committee Chairman Jason Chaffetz, a Utah Republican, asked
Shkreli what he would tell a single, pregnant woman with AIDS
who needed Daraprim to survive, and whether he thought he had
done anything wrong. Shkreli declined to answer.
"I intend to follow the advice of my counsel, not yours,"
said Shkreli after South Carolina Republican Representative Trey
Gowdy suggested he could answer questions that were unrelated to
pending fraud charges against him.
After the hearing, Shkreli's lawyer, Benjamin Brafman,
attributed his client's behavior to "nervous energy."
Later, though, Shkreli wrote on Twitter: "Hard to accept
that these imbeciles represent the people in our government."
U.S. Representative Elijah Cummings, who learned about the
tweet while Turing Chief Commercial Officer Nancy Retzlaff was
testifying, pounded his fist on the dais. The Maryland Democrat
then shouted about an internal Turing document in which a
staffer joked about the price increase.
"You all spent all of your time strategizing about how to
hide your price increase ... and coming up with stupid jokes
while other people were sitting there trying to figure out how
they were going to survive," Cummings said.
Shkreli was arrested in December and charged with running
his investment funds and companies almost like a Ponzi scheme.
He has pleaded not guilty to the fraud charges, which are not
related to the pricing of Daraprim. He also stepped down from
Turing and was fired from KaloBios Pharmaceuticals Inc
Cummings pleaded with Shkreli to reconsider his views about
drug pricing: "You can go down as the poster boy for greedy drug
company executives, or you can change the system."
At one point, Brafman asked to address the committee, but
Chaffetz said no.
Shkreli was even asked about his purchase of a
limited-edition Wu-Tang Clan hip-hop album for $2 million.
"Is that the name of the album? The name of the group?"
Gowdy asked. After Shkreli again invoked the Fifth Amendment,
Gowdy added: "I am stunned that a conversation about an album he
purchased could possibly subject him to incrimination."
Shkreli was allowed to leave early after he repeated he
would not answer questions.
Representative John Mica, a Florida Republican, said he
would consider asking fellow lawmakers to hold Shkreli in
contempt for his behavior.
"I don't think I've ever seen the committee treated with
such contempt," Mica said.
Brafman said Shkreli would have liked to discuss drug
pricing but had no choice, given the criminal charges against
Shkreli's tweet did not amount to waiving his right against
self-incrimination, experts said. "The First Amendment protects
Mr. Shkreli's right to post his opinion on Twitter that the
Congress is populated by 'imbeciles.' This is classic political
free speech," said lawyer Paul Callan.
Also at the hearing, Valeant Pharmaceuticals Inc
interim CEO Howard Schiller put forward a conciliatory face,
testifying that his company had changed its business and pricing
"Where we have made mistakes, we are listening and
changing," Schiller said during opening remarks. "In a number of
cases, we have been too aggressive" about price increases.
Valeant shares rose more than 5 percent during the hearing.
Retzlaff testified that Turing acquired Daraprim because it
was "priced far below its market value" and is committed to
investing revenue into new treatments.
The Federal Trade Commission and the New York attorney
general are investigating Turing for possible antitrust
(Reporting by Sarah N. Lynch in Washington and David Ingram in
New York; Additional reporting by Nate Raymond, Caroline Humer
and Noeleen Walder in New York; Editing by Peter Cooney, Lisa
Von Ahn and Alistair Bell)