WASHINGTON — Martin Shkreli, the former pharmaceutical executive that much of Congress loves to hate, has repeatedly argued that his company spent most of its money on research to develop new and better drugs.
On Thursday, Jason Chaffetz, the chairman of the House Oversight and Government Reform Committee, argued that Shkreli and his old firm, Turing Pharmaceuticals, were more interested in turning a profit — and weren’t being honest about it.
At a hearing on prescription drug prices, he pointed to newly released documents from a committee investigation that showed Turing approved raises for its officers at a board meeting and spent thousands of dollars on chartered yachts, celebrity performances, and a “fireworks package.”
One employee — whose name was redacted — was given a raise of 400 percent, from $160,000 per year to $800,000, according to minutes from a 2015 meeting. Two others saw their salaries hiked to $600,000. One had previously made $275,000 and the other $250,000.
Turing spent & budgeted for yachts, celebs, & hundreds of thousands of dollars in raises & bonuses. Not research. pic.twitter.com/uRlpdEvjLn
— Oversight Committee (@GOPoversight) February 4, 2016
Shkreli became synonymous with high drug prices after Turing bought a drug — which is used to treat AIDS patients — and raised the price from $13.50 a pill to $750 a pill, an increase of more than 5,000 percent.
At the hearing, Nancy Retzlaff, Turing’s chief commercial officer, insisted that “we invest 60 percent of our net revenues” in research and development, more than most drug companies spend.
But Chaffetz, a Utah Republican, accused Turing of “lying” about what he suspected was its real motive: profit.
He played a video of Shkreli saying, in a local television interview: “We take all of our cash, all of our profits, and spend it on research for these patients.”
Spending 60 percent of the revenues on research is “not all the cash,” Chaffetz told Retzlaff.
“I’m a conservative guy. I want people to make profits … You know why I think you’re lying to us? You didn’t say ‘profit,'” Chaffetz told Retzlaff.
“I think you’re purposely avoiding it. I don’t think you’re telling the full and complete truth,” he said. “I think you’re both being disingenuous and incomplete in your answers.”
Retzlaff allowed that “of course we expect to make a profit” — but insisted that Turing provided enough financial assistance to vulnerable patients, especially the uninsured, that many only paid “pennies” for Daraprim.
Chaffetz, however, said those costs will be shifted to insurers and government programs — and that other Americans will end up paying the costs.
“Who’s paying the 750 bucks? Suckers! And you know who the suckers are? The American public,” Chaffetz said. “Your extravagance is something we all have to pay for.”