Martin Shkreli appears to be a big step closer to testifying before a congressional committee.
The US Department of Justice wrote a letter Sunday to a federal judge overseeing a securities fraud case against Shkreli to say “the government does not object to (Shkreli) traveling to Washington, D.C., to comply with the House Committee’s subpoena” to testify at a hearing on prescription drug pricing. As part of his $5 million bail order, Shkreli is prevented from traveling outside parts of New York City and nearby Long Island.
The letter paves the way for Shkreli to appear before the House Oversight and Government Reform Committee, which wants to explore the rising cost of medicines. A hearing had been scheduled for Tuesday, but it has been postponed to Feb. 4 due to the recent blizzard.
Turing Pharmaceuticals, where Shrkeli was chief executive until his recent arrest, is under a microscope after buying Daraprim, a life-saving medicine, last summer and then boosting the price from $13.50 to $750 a tablet.
The Justice Department decision follows an exchange of letters over the past few days between the committee, which threatened criminal contempt charges against Shkreli if he did not testify, and Shkreli’s attorneys, who argued the testimony would subject the controversial former pharma executive to embarrassment.
One key argument they have made is that Shkreli planned to plead the Fifth Amendment so he would not incriminate himself.
Although the hearing is unrelated to Shkreli’s arrest for securities fraud, his attorneys had argued that the US Federal Trade Commission and the New York attorney general are investigating the Turing pricing actions. “If Mr. Shkreli made any statements about Daraprim, or increases in prices for Daraprim, those statements, therefore, could be used against him in a criminal matter,” his attorney wrote to the committee last Friday.
The antitrust probes center on moves made by Turing to thwart generic competition, which we first reported here.
In response, Representative Jason Chaffetz (R-Utah), who chairs the committee, responded in his own letter last Friday that Shkreli and his attorneys had 10 days in which to respond to the subpoena calling for his testimony, but failed to act in a timely manner. Moreover, Chaffetz also noted that Shkreli and his attorneys could have asked the federal judge overseeing the securities fraud case to lift the travel ban in order for Shkreli to comply with the subpoena.
“The committee rejects the notion that Mr. Shkreli is unable to comply with the subpoena and will move to enforce the subpoena,” Chaffetz wrote to Baruch Weiss of the Arnold & Porter law firm in Washington, D.C., which currently represents Shkreli.
The securities fraud case involves Shkreli’s tenure as chief executive of a different drug maker called Retrophin. Federal prosecutors allege he used the company treasury as a personal “piggybank” in order to pay off debts owed to investors in his troubled hedge fund, MSMB Capital Management. Shkreli has denied the charges.
US District Court Judge Kiyo Matsumoto, who is overseeing the securities fraud case, has not yet moved to lift the travel ban.