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Turing CEO: Senate drug probe is 'mountain out of molehill'

Activists hold signs containing the image of Turing Pharmaceuticals CEO Martin Shkreli in front the building that houses Turing's offices, in New York, Thursday, Oct. 1, 2015, during a protest highlighting pharmaceutical drug pricing.
Craig Ruttle | AP
Activists hold signs containing the image of Turing Pharmaceuticals CEO Martin Shkreli in front the building that houses Turing's offices, in New York, Thursday, Oct. 1, 2015, during a protest highlighting pharmaceutical drug pricing.

A controversial drug company CEO — whose 5,500 percent price hike of an AIDS drug ignited a national firestorm — on Wednesday said that a Senate investigation into the pricing practices of his and three other pharmaceutical companies is a misguided effort to "gain political capital."

"The senators have their facts wrong," Turing Pharmaceuticals boss Martin Shkreli told CNBC. "They're trying to make a tempest out of a teacup, and a mountain out of molehill."

"This is co-opting a headline to try to gain political capital, which is really unfortunate," said Shkreli, who has been sent a letter asking him to appear before a Senate committee next month to discuss his company's astronomical price spike.

Shkreli said the price increases by Turing and other companies that are the focus of the Senate investigation are not significantly affecting overall cost trends in the pharmaceutical industry, because "these are small drugs ... tiny drugs," with little market share.

"Given the $500 billion industry ... neither this nor any other pricing increase will change the industry," he said.

Shkreli also said he would make a "modest" decrease to the price of Turing's drug Daraprim, at least for some customers, by the end of this year. Daraprim is used to treat a parasitic condition known as toxoplasmosis, which is seen in HIV patients and pregnant women.

He previously has promised, after facing criticism, that he would cut Daraprim's retail price. But that hasn't happened yet.

"I haven't decided it to be 10 [percent] or 5 or 20 percent or anything yet, but it'll be modest," Shkreli said Wednesday. Those price cuts will be for customers covered by private and government-run insurance.

He said there will be more "substantial" price cuts for hospitals that are finding it difficult to buy Daraprim at full price, and for uninsured people.

"People that need the price decrease are hospitals, customers that aren't covered by other government programs," he said. "The price for those customers will be much less."

Shkreli also said that 60 percent of Daraprim's sales are for "a penny a pill," under discount programs available to needy customers.

His comments came after the Senate's Special Committee on Aging said it will look at the prices of drugs by Turing, Valeant Pharmaceuticals, Rodelis Therapeutics and Retrophin.

Before he founded Turing, Shkreli started the biotech company Retrophin. But he was ousted by Retrophin's board last year, and the company is now suing him for $65 million, claiming he used Retrophin's money and stock to pay investors in a hedge fund he once ran. Shkreli denies Retrophin's allegations.

His new company, Turing, generated outrage in September when it was revealed it had raised the list price of its drug Daraprim from $13.50 per pill up to a whopping $750. Daraprim has been on the market since the 1950s, and is not patent protected.

Shkreli said the steep price hike was justified given Turing's need to turn a profit and to fund the development of other drugs that could replace Daraprim.

But critics accused Turing of price gouging, and have continued to vilify Shkreli — who has eagerly engaged his critics in battles on Twitter.

The controversy comes at a time of increased focus nationally on the prices of prescription drugs in the United States. Public opinion surveys have shown majorities are worried about the prices of prescription drugs, which are used by about 60 percent of the population.

Shkreli, in his interview Wednesday with CNBC, suggested that reversing the price increases of Daraprim and the drugs made by the other three companies would do little, if anything, to relieve concerns about overall prices.

"I think there's a perception that these price increases will change the industry or are changing the industry. They're not," he said. "Daraprim's one of the smallest branded medicines in the U.S."

"These are little drugs, they're all minuscule products, they will absolutely not change the industry," Shkreli said.