While testifying before a Senate committee on Thursday, a former vice president of Turing Pharmaceuticals admitted he was fired after questioning Martin Shkreli’s decision to raise the price of a lifesaving drug by 5,500%. Although former Turing CEO Shkreli invoked his Fifth Amendment right and chose not to testify before the committee, the current interim CEO did testify and was unable to justify Shkreli’s decision to raise the price of Daraprim.
Former vice president and top lawyer for Turing Pharmaceuticals, Howard Dorfman testified before the Senate Special Committee on Aging to address the recent price hikes in U.S. prescription drugs. After Dorfman told Shkreli that the 5,500% price hike “was certainly unjustified,” Shkreli reportedly responded that “no one cares about pricing increases.”
“Mr. Shkreli told me that he was the most knowledgeable person with regard to this business model,” Dorfman said. “That I was seriously misinformed — despite my 30 years in the industry.”
Shortly after raising his concerns, Dorfman was reportedly fired from Turing Pharmaceuticals in August 2015. During that time, Turing raised the price of Daraprim from $13.50 per pill to $750 per pill.
“What improvements did Turing make to Daraprim to justify raising the price from $13.50 per pill to $750 per pill?” asked Committee Chairwoman Sen. Susan Collins.
Testifying before the committee on Thursday, interim Turing CEO Ronald Tilles admitted that the drug has not changed since the 1950s and currently sells overseas for approximately $2 per pill. When Tilles attempted to justify the price hike by spending 60% of the revenue on research and development, Sen. Claire McCaskill pointed out that Turing chief commercial officer, Nancy Retzlaff, had testified last month stating that the R&D argument simply was not true.
“She might be correct,” Tilles acknowledged.
While dodging questions, Tilles and Michael Smith, co-founder of the company, repeatedly blamed other Turing executives for the pricing decision. Frustrated with their unwillingness to take responsibility for their actions, Sen. Joe Donnelly told them, “I was born at night, but I wasn’t born last night: You guys are running a scam. And you tried to figure out how fast and how long you could milk it.”
With their newborn daughter diagnosed with toxoplasmosis, Shannon Weston told the Senate panel that she and her husband Joshua sought a second mortgage in 2015 when told a year’s supply of Daraprim would cost $360,000. According to Weston, their medical insurer declined to pay the bill.
“I was hopeless and depressed at the thought of what would happen to my perfect little girl if I was not able to help her,” Weston testified. “I truly felt like I had failed her in the worst possible way.”
Listening to the testimony of victims and Turing executives, Sen. Bob Casey described the pharmaceutical company’s behavior as “pure evil.”
Shkreli’s own emails revealed that he admittedly raised the price of Daraprim purely for profit. Last December, Shkreli was charged with securities fraud, securities fraud conspiracy, and wire fraud conspiracy while defrauding investors and misappropriating assets before becoming CEO of Turing Pharmaceuticals. According to U.S. Attorney Robert Capers, the charges against Shkreli carry a maximum sentence of 20 years in prison.
“Whether or not these companies’ actions are legal, their behavior harms patients, represents a market failure, and is a call to action,” declared Committee Chairwoman Sen. Collins.
Vowing to end unjustified drug price hikes, Sen. McCaskill asserted, “Let me speak very clearly to the folks who believe that they can participate in this sick game: we are coming after you.”