Shkreli Will Not Attend Congressional Hearing; Turing Pharma Faces FTC Probe over Drug Prices

Martin Shkreli

Turing Pharmaceuticals is under investigation by the U.S. Federal Trade Commission (FTC) in connection with the sudden significant increase in the price of Daraprim, a life-saving drug, according to a lawyer representing Martin Shkreli the former CEO of the company.

Last year, Turing Pharmaceuticals attracted the attention of the media, the medical community, and legislators after increasing the price of Daraprim by more than 5,000 from $13.50 to $750 a pill.

Daraprim is an antibiotic used to treat a deadly parasitic infection called toxoplasmosis, which is dangerous particularly to AIDS patients and others who have weak immune systems. Turing Pharmaceuticals and Mr. Shkreli received strong criticisms due to the aggressive drug price hike, and eventually “agreed to lower the price on Daraprim to a point that it is more affordable.”

According to Reuters, Mr. Shkreli’s lawyer, Baruch Weiss wrote a letter to the House Committee on Oversight and Government Reform that his client will not be able to appear in a hearing to answer questions about drug prices on January 26 because of the FTC investigation against Turing Pharmaceuticals.

Shkreli to avoid self-incrimination

The House Committee subpoenaed Mr. Shkreli to explain why he decided to suddenly and significantly increase the price of Daraprim. Atty. Weiss indicated in the letter that his client would “gladly cooperate” and produce documents required by the House Committee if he would be granted immunity.

Atty. Weiss also stated that given the situation that Turing Pharmaceuticals is under investigation, which also involves Mr. Shkreli; he would instead assert his constitutional rights not to answer questions to avoid self-incrimination.

According to the lawyer, the FTC investigation is parallel to another antitrust probe against Turing Pharmaceuticals concerning Daraprim by the New York State Attorney General.

The “same facts that would support liability under civil antitrust violations would support criminal antitrust charges,” and any statement by Mr. Shkreli regarding Daraprim could be used against him, explained Atty. Weiss.

Turing Pharmaceuticals released a statement indicating that its Chief Commercial Officer, Nancy Retzlaff would testify at the House Committee hearing on drug prices.

In his letter, Atty. Weiss said the House Committee “will obtain the information it needs” about Daraprim pricing from Ms. Retzclaff.

Shkreli accused of securities fraud

Mr. Shkreli is currently facing lawsuits filed by the Securities and Exchange Commission (SEC) and the U.S. Attorney’s Office for the Eastern District of New York for allegedly committing securities fraud.

The charges against Mr. Shkreli were connected to his activities during tenure as CEO of Retrophin while also working as hedge fund manager of MSMB Capital and MSMB Healthcare.

Prosecutors alleged that Mr. Shkreli engaged in a “Ponzi-like scheme” and used Retrophin as his “personal piggy bank” as he misappropriated the company’s assets to repay the hedge fund investors he defrauded.

Mr. Shkreli pleaded not guilty to charges against him, and he is confident that he will be “fully vindicated.” According to him, the allegations were” baseless and without merit.”

Atty. Weiss told the House Committee that the charges against Mr. Shkreli were not related to Daraprim, but prosecutors advised them that the “government’s criminal investigation is ongoing.”  They are uncertain if the case could involve issues that to be discussed during the House Committee hearing about drug prices on January 26.