Responding to widespread outrage over high-profile price hikes for prescription drugs, a Senate committee is holding a meeting on Wednesday to grill pharmaceutical executives on their business practices.
While House Democrats have already set up a task force to scrutinize price hikes, the hearing scheduled by the Special Senate Committee on Aging over the matter means that the majority party is taking an interest in the issue as well.
In particular, reports the Wall Street Journal, the committee is investigating the implications of companies that are buying the rights to medical patents and then dramatically raising the price.
While regulators and the public have long accepted that high prices are an occasionally necessary evil that allows drug companies to recoup the cost of their investment in medical research, the recent phenomenon of firms that invested nothing in the research raising the price has troubled officials.
An activist group in October released a report that showed that most of the largest price increases came from companies that were largely backed by hedge funds or venture capital firms. Presidential candidates on both sides of the aisle have denounced the trend, and the concerns over drug prices appeared to lead Hillary Clinton to propose stricter out-of-pocket maximums for prescription drugs.
That the same companies that dramatically increased prices for medications quickly lowered them in response to public criticism has likely prompted even greater skepticism of the companies’ claims that the original price increases were necessary to recoup their initial investment.
“There’s a line at which these huge price increases for prescription drugs go from rewarding innovation to price gouging and this hearing will set the stage for an examination of whether that line is being crossed,” Sen. Claire McCaskill, D-Missouri, the top Democrat on the committee, told the Wall Street Journal.