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Congress outraged over hepatitis C treatment VA can't afford

WASHINGTON -- Congress is looking into why veterans are being denied a cure for a deadly form of hepatitis.

In a CBS News investigation, we told you the cure was developed by a doctor working for the Department of Veterans Affairs.

The doctor got rich, but at $1,000 a pill, the VA can't afford it.

Much of the anger at Wednesday's hearing was directed at someone who wasn't even in the room.

"If I were you, I would be outraged," Rep. Mike Coffman, R-Colorado, said.

"Certainly the taxpayers should be outraged," Rep. Ralph Abraham, R-Louisiana, added.

Their target is Dr. Raymond Schinazi, who played a leading role developing a drug that cures hepatitis C. When he sold his company to pharmaceutical giant Gilead in 2012, he made over $400 million.

And he did it all while working seven-eighths of his time for the VA.

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Dr. Raymond Schinazi.
CBS News

"So, I'm not full time -- what I do with my remaining time is up to me," Schinazi told CBS News in December.

We asked him if anyone has ever questioned the arrangement that allowed him to become very wealthy while working most of his time for the government.

"Nobody has questioned anything yet," he said.

That changed Wednesday as House members including Rep. Tim Huelskamp, R-Kansas, grilled David Shulkin, the VA's undersecretary for Health.

"But he just sold a company for $400 million. Did anybody know about that?" Huelskamp asked.

"I'm not aware of who knew what three or four years ago," Shulkin responded.

Coffman wanted to know why Schinazi got rich, but the VA got nothing for a drug that one of its own doctors helped develop.

"Is it bureaucratic incompetence or is it corruption, or is it a combination of the two?" Coffman asked. "This wasted resource is why this nation is unable to take care of the men and women who have served this country in uniform."

Others were upset that Schinazi wasn't there to be questioned. The VA says Schinazi retired just two days ago.

"The person that's responsible always seems to retire before the investigation starts," Coffman said.

The VA did approve Schinazi's part-time arrangement and told CBS News part-time employees are allowed to invest in private companies, so long as all conflict of interest rules are followed.

The VA said there will be both internal and outside investigations.

  • Chip Reid

    Chip Reid is CBS News' national correspondent.