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