House Hearing Probes The Mystery Of High Drug Prices That 'Nobody Pays'

Feb 4, 2016
Originally published on February 4, 2016 4:45 pm

Members of Congress at a Thursday hearing wrestled with questions about why the prices of some old drugs are rising so fast.

Much of the session held by the House Oversight and Government Reform Committee was dominated by Martin Shkreli, the bad-boy former CEO of Turing Pharmaceuticals who earned notoriety by raising the price 5,000 percent for the drug Daraprim, a treatment for toxoplasmosis.

Shkreli — who has been indicted on unrelated securities charges and pleaded not guilty — invoked his Fifth Amendment right against self-incrimination and refused to answer questions. As the hearing went on, he smirked, rolled his eyes and chuckled. Afterward, he insulted the committee members on Twitter.

Committee member Rep. Ted Lieu, D-Calif., tweeted back.

Once Shkreli left Thursday's hearing, lawmakers grilled other witnesses about rising drug prices.

The seemingly simple question about how much Daraprim costs in the real world proved pretty tricky to pin down.

Listen for yourself as Rep. Peter Welch, D-Vt., asked Turing's Chief Commercial Officer Nancy Retzlaff how much Daraprim costs. The response is enough to make us feel like imbeciles.

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AUDIE CORNISH, HOST:

Executives from two drug companies went before a House committee today to answer questions about the high prices of the drugs they sell. The former CEO of Turing Pharmaceuticals, Martin Shkreli, declined to explain why he raised the price of a life-saving drug by 5,000 percent. NPR's Alison Kodjak reports that even without his testimony, the hearing had plenty of drama.

ALISON KODJAK, BYLINE: Shkreli has come to be called the bad boy of the pharmaceutical industry for his lopsided smirk and dismissive behavior when challenged about his business practices. Last year, he bought the rights to a cheap drug that treats the brain infection toxoplasmosis and raised the price from $13 to $750 a pill. Today in the House Oversight Committee, Shkreli took a scolding from lawmakers. Democrat Elijah Cummings...

(SOUNDBITE OF ARCHIVED RECORDING)

ELIJAH CUMMINGS: The way I see it, you can go down in history as the poster boy for greedy drug-company executives, or you can change the system.

KODJAK: When he was subpoenaed to testify, Shkreli said he would take the Fifth Amendment and declined to answer questions, and that's what he did five times today.

(SOUNDBITE OF ARCHIVED RECORDING)

MARTIN SHKRELI: On the advice of council, I invoke my Fifth Amendment privilege against self-incrimination and respectfully decline to answer your question.

KODJAK: But he was anything but respectful. Shkreli rolled his eyes, posed for photos and chuckled while taking the Fifth. When it became clear that he wouldn't answer any questions, he was dismissed. Once he left the hearing room, he started tweeting. Turing's chief commercial officer, Nancy Retzlaff, was left to the lawmakers' ire.

(SOUNDBITE OF ARCHIVED RECORDING)

CUMMINGS: And the thing that really gets to me - Mr. Shkreli walked out of this hearing a few minutes ago, and before he probably got out of the door, he sends a tweet calling everybody on this committee imbeciles. Did you know that?

NANCY RETZLAFF: I was not aware of that.

KODJAK: Retzlaff spent the next few hours telling skeptical committee members that the company boosted the price so it could invest in research for new drugs to treat toxoplasmosis and other rare diseases, and she argued the company paid co-pays in the tens of thousands of dollars to ensure that patients could get the medication called Daraprim for one penny a pill.

(SOUNDBITE OF ARCHIVED RECORDING)

RETZLAFF: We are absolutely committed and always have been to ensuring every single patient who needs Daraprim gets it.

JASON CHAFFETZ: That ain't true, but we'll talk more about that.

KODJAK: Committee Chairman Jason Chaffetz, a Utah Republican, was one of many on both sides of the aisle who were skeptical of Turing's claims. He asked her how a hypothetical mother with AIDS would get the drug.

(SOUNDBITE OF ARCHIVED RECORDING)

CHAFFETZ: What is she supposed to do? Is she supposed to tweet Martin and try to get that for a penny? Is that how that works?

RETZLAFF: Now, that doesn't work. That's not how it works.

CHAFFETZ: It doesn't work. I get it.

KODJAK: Turing wasn't the only company at the hearing. Valeant Pharmaceuticals CEO Howard Schiller was also there to explain why his company raised the price of two widely-used heart drugs. He faced far fewer questions than his Turing colleagues, and he struck a much more humble tone with Cummings.

(SOUNDBITE OF ARCHIVED RECORDING)

HOWARD SCHILLER: In the past, we had purchased some drugs like this where there was no generic competition. We raised the price, as you mentioned. We were too aggressive, and we are not...

CUMMINGS: Maybe way too aggressive and...

SCHILLER: We are not going to be looking for those kinds of acquisitions going forward.

KODJAK: The lawmakers weren't appeased, though. They threatened price controls or even having the government make certain medications if the huge price increases continue. Massachusetts Democrat Stephen Lynch blamed Turing.

(SOUNDBITE OF ARCHIVED RECORDING)

STEPHEN LYNCH: And you're trashing the pharmaceutical industry, good researchers that are out there doing great work, and you're going to cause us to have to put heavy, heavy regulations on good companies.

KODJAK: But given the gridlock in Congress, public shaming may be the lawmakers only tool. Alison Kodjak, NPR News, Washington. Transcript provided by NPR, Copyright NPR.