MARIA BARTIROMO, FBN ANCHOR: Martin Shkreli making headlines last August when one of his drug companies, Turing Pharmaceuticals, acquired a drug called Daraprim only to raise the price of that drug by more than 5,000 percent overnight.
Shkreli has since been ousted as CEO of that company and separately he has been arrested for securities fraud. He’s also the subject of a congressional investigation on price gouging. Shkreli will be headed to court tomorrow and he will be on Capitol Hill later this week talking about price gouging.
But first he joins me right now in studio for a Fox Business Exclusive. Martin, thanks very much for joining us.
MARTIN SHKRELI, FORMER CEO, TURING PHARMACEUTICALS: Thank you for having me.
BARTIROMO: I’m happy you’re here and there’s a lot to talk about. Let’s first begin on these charges. You are under criminal investigation for securities fraud. What can you say?
SHKRELI: Well, you know, we made a statement that, you know, refutes the – the – the charges. You know, obviously I think that I’m innocent and not guilty and so forth. the government alleges a Ponzi scheme, so-called Ponzi scheme. Despite that, all of my investors were very successful in our funds and usually in Ponzi schemes someone loses money, and the government can’t find that — that part of the so-called scheme. So, we think their charges are baseless, and meritless (ph) and we’ll be victorious.
BARTIROMO: So you went back and looked at other different fraud cases, right? You say you looked at 100 fraud cases, and you said that sentencing guidelines are related to profits that people made.
SHKRELI: That’s right.
BARTIROMO: And so that’s why you’re saying you didn’t make any money, so where’s the Ponzi scheme.
SHKRELI: That’s right. I also didn’t receive any compensation from – for any substantial compensation from my hedge fund. So, I feel very confident in the case. You know, I can’t talk about the case extensively, but, you know, I feel very good about it.
It also strikes me as a coincidence, my attorneys and I feel it’s a strong coincidence that these charges come on the eve of the Daraprim price increase.
BARTIROMO: Yes, that’s what I want to talk about, because when you joined me here at the end of last year we talked about this. I was reading an article in “Newsweek” and they’re calling you the most hated man, Martin, for raising the drug price of that HIV drug by more than 5,000 percent. Why did you raise prices like that?
SHKRELI: Well, you know, just to address the most hated man thing, just on the walk here I had people stop me for autographs and selfies. So, I don’t know that I’m the most hated man in the world, but — at least not in New York City.
But in any event, you know, I raised the drug price for a number of reasons that I numerated last time. This drug was a very, very inexpensive drug compared to its peers. This is a rare disease drug for a rare infection, a lot like the Zika virus, in fact. And now with a higher price, Turing Pharmaceuticals, the company I worked at and was — founded and CEO of, that company can afford to invest research in – in that disease state, Toxoplasmosis, the same way that – the same way that we need a new drug for Zika, we need a new drug for Toxoplasmosis.
BARTIROMO: Well, then this is what you were trying to create with Turing Pharmaceuticals, become this infectious disease specialty company by looking at some of these infectious diseases where others are not focused on.
SHKRELI: Yes, there’s a dozen, or two dozen or three dozen of these diseases that there are very little attention. Just in the last year we had two major out breaks of Ebola and now Zika, and I don’t think that we should be waiting for a third, or fourth or fifth while people are dying, and it would be simple for a drug company to come in and try to cure all of these illnesses.
There’s not a big commercial opportunity for these illnesses, that’s why the price has to be so high, because the cases are so small, but we can’t afford to let these small cases reverberate and become outbreaks.
BARTIROMO: So, you say that these charges about securities fraud are really all about the government being upset with you.
SHKRELI: You know, I can’t comment anymore about the case. You know, I’ve said what I’ve had to say. I think the charges are meritless, baseless, and we’ll be victorious in court, and I’ll let – I’ll let the — I’ll let the courtroom speak for itself.
BARTIROMO: And you’re going to court this week.
BARTIROMO: You’re going to take the Fifth.
SHKRELI: So, I’m going to court tomorrow in New York and I’m going to Congress on Thursday and I will be taking the Fifth Amendment. I’ve signed an affidavit saying I will – I’ll have nothing to say at Congress. I will stick to that.
I think it’s ridiculous that they would actually force me to be there in person when I have stated that I – I will be taking the Fifth. In fact, I think it’s unethical. In fact, the D.C. law manual states it’s unethical to bring someone and subpoena them just to hear them take the Fifth. I think it’s nothing more than an advertisement for some congressmen that want to get some votes and some cheap publicity off of my name.
BARTIROMO: So, you – so you think it’s unethical for them to drag your butt to Washington only so that you can take the Fifth, but you don’t think it’s unethical to raise the price of a drug that so many people need by 5,000 percent?
SHKRELI: Only if…
SHKRELI: Only a few thousand people need Daraprim, and at the end of the day, this is a medicine that is very affordable, we’ve made it very affordable. 60 percent to 70 percent of the drug is given away for free. And this is a drug that costs even less than most of the drugs in its peer group right now. So, as a capitalist, the company decided to raise the price of the drug to maximize its profit. It also bended over backwards to make sure that that drug was affordable and new research is being done.
So, it’s a win-win situation all around, whereas what Congress is doing is just a play to embarrass me.
BARTIROMO: You have been quoted as saying if anybody, a patient or a hospital, every really needed the drug at a lower cost you could arrange a special one-time discount.
BARTIROMO: Did anyone take advantage of that offer?
SHKRELI: Oh, yes. There is a huge number of discounts. Like I said, 60 percent to 70 percent of the drug is given away practically. That’s more than any drug. I’ve – I’ve been around the drug industry a while and seen thousands of drugs, I’ve never seen this amount of discounting and free drug give away.
So, people look at the list price, it’s just like buying a car. You know, there’s a discounted price as well.
BARTIROMO: You know, since we spoke the last time I was able to speak with a number of CEOs and health care professionals, all of whom agree with your free markets talk that, look, if you need – and I’m a free market person, and I believe in the free market. And – and if you need – if you need to see investments in this so that we could find the drugs that we need for Zika and for this – and – and HIV, then you need to have investors believe they can make money on it. However, even they – even though they all believe that, they all say you’re a profiteer and you are giving this industry a bad name.
SHKRELI: You know, that’s up to them. I mean, I do more research than – than most of these companies. All of Turing profits go back into research. You know, I am not with the company anymore, as you know, but all of Turing’s profits go back into research. Those companies can’t say same thing.
BARTIROMO: What do you need to do to get the public to buy into this? I mean, you know, throughout all of this you have been, you know, put on covers of magazines, on TV shows as the bad guy for raising prices the way you did. And then right after that you get this securities fraud allegation and the criminal investigation.
You said to me when we were on the phone, maybe I was a little snarky, I need to change that.
SHKRELI: Well, my new strategy is to pick fights with rappers, if you haven’t seen that. But no, in all seriousness, I think that, you know, the world is changing its mind about me. There have been a lot of new, positive interviews. I think the tide is swinging from, you know, this is a bad guy to people listening to me and really understanding who I am and seeing that maybe it’s actually the government that’s starting to beat up on me just a little too hard.
BARTIROMO: I want to get to the rapper thing in a minute because I think our audience really wants to hear about that. That was really funny, a little bizarre.
But first, you have a new legal team in place. We want to break that news right here because I know this is a lawyer who is very well known.
SHKRELI: Yes, no, I announced in court filings a few weeks ago that I was – I was replacing my legal team. My former team did a wonderful job, tremendous job over the last year talking with the government about these allegations, and unfortunately the government decided to proceed without warning regardless. But I have hired Ben Brafman to represent me going forward and I’m very excited about that.
BARTIROMO: This is the man who represented Sean “Puffy” Combs.
SHKRELI: That’s right.
BARTIROMO: Yes. So, what is he going to do different?
SHKRELI: I’m not sure he’s going to do anything different. You know, his track record is impeccable and I think that – to the extent that he’s representing me going forward, I think we’re going to put our best foot forward. And like I said, the – the — we have a very good case to make and I think we’re going to win.
BARTIROMO: Do you think that because of the raising of the price of the AIDS drug that it just left a bad taste in peoples’ mouth and then they started looking at – at your life closer?
SHKRELI: You know, I – I can’t speculate. Live I’ve said in our official statement, you know, I – I — we definitely find the timing not a coincidence.
BARTIROMO: All right, okay. Let me get to the rap part of the story, because in a video obtained by TMZ you threatened to erase part of a one-of-a-kind hip-hop album that you actually purchased for $2 million. Let’s watch.
SHKRELI: If you ever say some dumb (CENSORED) again, this album, this Shoalin, I’m going to erase all of your (CENSORED) from this album.
UNIDENTIFIED MALE: (inaudible)
SHKRELI: I’m going to erase you from the record books of rap. You’re going to be done. You’re my son (ph). You have to listen to me. I butter your bread, you understand me?
UNIDENTIFIED MALE: You’ll be a ghost for real (CENSORED).
SHKRELI: Without you – without me, you’re nothing.
BARTIROMO: When did you do that video?
SHKRELI: It was few days ago.
BARTIROMO: Okay. So — can you tell us a little about the conflict with Wu-Tang Clan member Ghostface Killah?
SHKRELI: Killah. Yes, no…
BARTIROMO: Ghostface Killah.
SHKRELI: Mr. Killah and I have exchanged some words. No, in all seriousness, it’s – you know, this album is a one-of-a-kind album that was purchased for $2 million. It was the most expensive piece of music ever purchased in the history of recordings. And you know, my goal with the – with purchasing the music was to bring a new narrative to the music industry that, you know, music is important. And you’ve seen artists like Taylor Swift pull their music back from streaming services and so forth.
And music is so important. You look at companies like Apple, there’s a big part of Apple that’s based on music. And so, for me highlighting this piece of music as important and iconic was – was important. Being a part of that comes with a narrative, and the narrative has to be exciting for people to watch and see. And rap music has a lot of bravado and a lot of, you know, sort of fighting in it. It’s a big part of the rap culture. And – and I certainly helped play my part in that.
BARTIROMO: Yes, I think. But I mean, in the middle of everything you’re going through, to do this video, it seems a little bizarre.
SHKRELI: Well, I think that, you know, anyone watching the video understands that it’s certainly more than a little bit tongue in cheek. And obviously this – this probably was, as you can imagine, planned well in advance of – of everything that – that was planned.
So, I think that, again, I hope Mr. Killah and I can resolve our differences, but peacefully, but we’ll see.
BARTIROMO: Have you heard from Ghostface Killah at this point?
SHKRELI: I — I – I’ve heard some rumblings that he may be releasing a statement shortly.
BARTIROMO: Okay, so what do you want to – when you say you could resolve your differences, what – what would you like to see happen with him?
SHKRELI: Well, I expect him to apologiz, but at the end of the day, you know, I’m a businessman, I’m willing to compromise and perhaps just shake on it. I have a lot of respect for him as an artist, but he had some disparaging things to say about me which I don’t agree with. And you know, he and I come from – we’re kind of – come – cut from the same cloth. We’re both New York City natives and, you know, I think he’ll – he’ll – he’ll wisen up and decide that I’m not such a bad guy either.
BARTIROMO: And you’re not afraid to be getting involved in – in – I mean, this is like a serious group that is out to get you.
SHKRELI: I think he should be afraid.
BARTIROMO: What are you going to do?
SHKRELI: That’s all I’ll say.
BARTIROMO: He should be afraid of you.
BARTIROMO: Is that a threat?
SHKRELI: That’s not a threat, but, you know, like I said, rap music – a big – Maria, of course I’m being tongue in cheek here…
SHKRELI: … but, you know, rap music, there’s a big part of rap music that is about people fighting with each other. Just recently the astrophysicist got into a fight, Neil deGrasse Tyson, got into a fight with a rapper and we’ve seen the mayor of Toronto get involved with Drake’s music. So, you know, rap is becoming more permeated through our culture. People love it, people love the excitement and the bravado. And you know, I’m doing my part to – to play a part in that.
BARTIROMO: All right, so tell me what your plans are going forward. I mean, you’re going to take the Fifth when you go to court, obviously. When you’re – when you go to Congress. What are you going to be talking about when you get there this week to Congress, if you’re going to take the Fifth.
SHKRELI: I’m not going to say anything other than Fifth Amendment. They can ask me any question. What color is the sky? Fifth Amendment?
BARTIROMO: Well, what about talking about price gouging?
SHKRELI: I can’t talk about it. You know, there is basic defense lawyer council. The problem is — as you know, I’m not a shy person. I would love to talk to Congress. I would berate them, I would insult them, I would have a — try have a cordial discussion, but I’m sure it would devolve very quickly into a fight. And you know, I would do it behind closed doors, I would do it under immunity. They don’t want to do any of those things.
SHKRELI: They just want this to be a circus.
BARTIROMO: They want you in front of the cameras.
SHKRELI: That’s it.
BARTIROMO: Yes, but look, when we talked about the infectious diseases and – and – and what you were trying to do with Turing Pharmaceuticals, there are 50 infections diseases that are being unmet, right?
SHKRELI: That’s right.
BARTIROMO: So – so what do you – what do you tell people about your moral responsibility. I understand running Turing and you’re CEO and you want to run public companies. You have to answer to share holders, get the best price for the product. But what about the moral responsibility that you have to make sure that you make available the drugs that people need at affordable prices?
SHKRELI: These companies that I’ve been involved in, both Retrophin before Turing and Turing now, they do that. They bend over backwards. In fact, they do it better than big pharma because they have a company that’s dedicated to one small product, whereas big pharma, they don’t even know that they have these drugs.
And if you look at moral responsibility, the responsibility rests on our industry to have drugs for Zika and Ebola before the outbreaks, not after. You know, after is too late. You’ve had already enough people die. You want to have these things beforehand. And of those 50 infections diseases, I know that Turing’s working on three or four of them to come up with these new drugs for the next decade.
BARTIROMO: Have you seen other price increases since you took the price up by 5,000 percent?
SHKRELI: Yes, you know, Pfizer actually raised price on 100 different drugs, and…
BARTIROMO: Not 5,000 percent.
SHKRELI: No, but their drugs are so large that their price increases are way bigger than the ones we took. The impact the market place and the average consumer and the average employer way more than – than our price increase does.
BARTIROMO: Do you – do you have a horse in the race in terms of the White House? Here we are on the day after Iowa. Are you supporting anybody?
SHKRELI: You know, I’m not supporting anyone outright just yet. I’m probably going to lean to the right a little bit, but you know, I like a lot of things that Bernie Sanders is saying. You know, he has a specific focus on mental health that I haven’t seen any other candidate mention. Mental health is very close to – to my life and my family, and you know, the company that I was involved in, Turing, has a number of mental health drugs. So, I’m very excited to see Bernie talk about that.
BARTIROMO: So – so, you said you may lean to the right, but if not you’ll go with Bernie. So, you’re feeling the Bern.
SHKRELI: I’m not feeling the Bern. No…
BARTIROMO: Oh, you’re not feeling the Bern.
SHKRELI: I think his economics policies are – are a little crazy, but at the end o the day I think he’s an earnest guy, he’s an authentic guy, and – and that’s very important to me.
BARTIROMO: What about Trump?
SHKRELI: I think he’s – I don’t know. I watched the Steven Colbern (sic) roast of him, and I’m not so sure he’s as authentic as we think. So, I’m not a big Trump fan honestly. So, I haven’t really found a candidate that I love, but I found pieces of candidates. There’s pieces of Bernie I like, there’s pieces of some of the Republicans I like. And you know, it would be nice if you could take the best of all of them and smush them into one person, but unfortunately that’s politics.
BARTIROMO: Martin, you’re going to be in Washington. We’re going to be watching that. We know you’re going to take the Fifth. We appreciate you joining us this morning.
SHKRELI: My pleasure. Thank you for having me.
BARTIROMO: Thank you so much. Martin Shkreli there.