The appearance of former Turing Pharmaceuticals CEO Martin Shkreli, the hoodie-wearing, hip-hop-loving indicted millennial multimillionaire, will certainly create congressional theatrics. | AP Photo Martin Shkreli calls lawmakers 'imbeciles' The normally outspoken Martin Shkreli held his fire — until after the hearing.

The drug industry’s most notorious CEO pleaded the Fifth Amendment before Congress on Thursday and then promptly called lawmakers "imbeciles" on Twitter.

"Hard to accept that these imbeciles represent the people in our government," tweeted Martin Shkreli, the former Turing Pharmaceuticals CEO who exulted in making a fortune by jacking up the price of a life-saving medicine.


The appearance of the hoodie-wearing, hip-hop-loving indicted millennial multimillionaire created congressional theatrics — even though the usually chatty businessman, who showed up Thursday wearing a suit and no tie, stayed silent during the House hearing.

Democrats, including the presidential contenders, portray Shkreli as the face of an industry that increasingly puts profit above patients. Republicans, who oppose more government intervention in health care, depict him as a “bad apple,” an outlier besmirching an industry dedicated to life-saving innovation.

The trash-talking, attention-grabbing Shkreli is a one-man public relations disaster for the pharmaceutical lobby, whose representatives were making the rounds this week to educate lawmakers about why their companies are nothing like Turing and its bad boy former executive. PhRMA members, they say, invest time and money in research and development to bring cures to patients. Businesses like Turing, in contrast, buy old drugs from other companies and raise the prices — by 5,000 percent in Shkreli’s case.

Republicans on the House Oversight Committee Thursday morning chided Shkreli for refusing to answer their questions, citing some of his more notorious exploits, like purchasing a Wu-Tang Clan album for $2 million and broadcasting his life on social media.

"Mr. Chairman, I am stunned that conversation about an album purchased could possibly subject him to incrimination," said Rep. Trey Gowdy (R-S.C.). Shrekli, who's facing a federal investigation, repeatedly declined to answer the committee's questions.

"On the advice of council, I invoke my Fifth Amendment privilege against self-incrimination and respectfully decline to answer your question," Shkreli said before leaving the hearing room. Shkreli's attorney later criticized the way lawmakers questioned his client.

"I think it's extraordinarily unfair that Turing has been singled out for the type of unfair publicity they have received, and when all the facts about Turing ... have been disclosed, I think everyone will recognize that Mr. Shkreli is not a villain, he is not the bad boy," said Shkreli's lawyer Ben Brafman told reporters. "I think at the end of this story he is a hero.”

Shkreli's silence during the hearing created more space for ranking member Rep. Elijah Cummings and fellow Democrats to make more noise, turning the spotlight from Turing onto the drug industry more broadly. Cummings, who earlier in the week released a report finding Turing's price hike was driven primarily by profit, said that the price-gouging tactics are common practice in the industry.

"These tactics are not limited to a few bad apples — they are prominent," Cummings said Thursday morning, calling out a handful of pharma giants by name, including Pfizer and Teva. "All of these companies have taken significant price increases on their drugs."

Oversight Chairman Jason Chaffetz has taken a broader approach. He waited months before agreeing to Democratic requests for the hearing and he’s focused on the FDA. He argues that if the agency picked up the pace of approving generic drugs it could create more market competition, blunting these astronomical price hikes.

But Chaffetz isn’t letting the industry off the hook completely, either. The drug companies and regulators are in a “tug of war,” he told POLITICO this week. “There are legitimate questions on the full scope of the issue. Hopefully there are things that we can do that would increase the competition.”

Not all of the lobbyists and financial analysts worry that the hearing will inflict real damage to their industry. It’s pretty hard, they say, to upstage even a smugly silent Shkreli. This is, after all, the man who tweeted “Oh there’s nothing id like more than to tear Congress a new one.”

Bernstein analyst Ronny Gal also expected the panel would likely focus on the “more politically expedient” targets of Shkreli, Turing and Valeant, the other drug company in the hot seat. "This is what the drug industry wants as well," Gal said.

Valeant bought two heart drugs a year ago and dramatically increased their prices. The Oversight committee’s investigation revealed Valeant increased the prices of more than 20 other drugs by over 200 percent between 2014 and 2015. And the company is also facing a federal probe related to its pricing and distribution practices.

Valeant interim CEO Howard Schiller’s testimony struck a conciliatory tone, promising to raise drug prices more moderately in the future. "After years of rapid growth, which included significant price increases, we will no longer rely on such significant increases in prices," Schiller said.

Turing executive Nancy Retzlaff, who testified at the hearing, was more defensive of the company's decision to dramatically raise the price of its drug, Daraprim. Before Turing hiked the price overnight, Daraprim “was still being sold for a price that was well below its market value,” she said in prepared opening remarks.

Several polls have found that drug prices have become a big deal for consumers — Democrats and Republicans alike. And that could change the political calculations.

“It’s only a matter of time before it goes from ‘bad actors’ to everyone,” said Ipsita Smolinski, managing director of health care consulting firm Capitol Street. “The landscape has changed. Already we have seen Congress and CMS do things that we never would have seen before.” She pointed to a measure that will let Medicaid penalize generic drugmakers if they raise prices faster than inflation, and to some recent CMS decisions on reimbursement for biologic medicines.

Shkreli taunted the committee in the lead up to its hearing. He took his time getting a New York federal court's permission to travel to Washington — he’s facing federal securities fraud charges unrelated to his post at Turing and his bail agreement forbid him from leaving the state. He posted a picture of the congressional subpoena on Twitter and wrote, “Found this letter. Looks important.”

And whether he intended to or not, he did draw attention to other companies that are boosting their drug prices — though not as dramatically as Turing did to an AIDS medication.

One survey of 3,000 brand name drugs conducted by DRX, which provides health plans with price comparison software, led to the Bloomberg headline: "Shkreli was Right: Everyone’s Hiking Drug Prices.” It found that prices more than doubled for 60 drugs and at least quadrupled for 20 others since 2014. And the Oversight hearing announcement noted that the wholesale price rose more than eight times as fast as inflation for 30 of the top-selling U.S. drugs between 2010 and 2014 — 76 percent.

To Shkreli, 76 percent is piddling stuff. He’s said his only regret is that he didn’t jack up the price of Turing’s AIDS drug by even more than 5,000 percent.

Jennifer Haberkorn contributed to this report.

