The testimony revealed a major distortion in the AARP-Schondelmeyer price studies, which increasingly make climate research at the University of East Anglia seem like the pinnacle of accurate and unbiased scientific inquiry.
You can download the testimony of the five witnesses here. The two statements to read are from Stephen Schondelmeyer of the University of Minnesota and John Vernon of The University of North Carolina at Chapel Hill.
Dr. Schondelmeyer has co-authored multiple AARP reports on the growth in published list prices. The Testimony of Stephen Schondelmeyer rehashes the text from the most recent report. Surprisingly, he does concede that list prices may not measure actual market prices (on pages 9 and 10). Thanks, Captain Obvious!
The Testimony of John Vernon highlights numerous important flaws in the Schondelmeyer-AARP studies. Here’s the one that really caught my eye:
Another flaw with the recent AARP report on rising drug prices, and related to the previous point, is that it ignores the fact that 10 of the top 25 branded pharmaceuticals in their study have generic versions currently on the market.Yep, you read that correctly. 40% of the top 25 drugs in the AARP study have minimal brand sales yet the brand price still gets fully weighted in the average price calculations! Nice way to distort the data, if you can get away with it.
Misleading facts didn’t stop the grandstanding. According to the Wall Street Journal:
“Panel member Rep. Jane Harman (D., Calif.) called the price increases ‘unconscionable and immoral’ and other Democrats on the panel questioned whether rising prices support lucrative pay packages for drug-company executives.”So what have we learned? A fact-finding committee hearing is not necessarily a bad idea, but many people are just not that interested in the facts.
BTW, I’m still waiting for a report on why college tuition at the University of Minnesota is rising so much faster than consumer price inflation (as discussed in the bottom of this post and the comments below it.) Some might call the tuition price increases ‘unconscionable and immoral’ and may even question whether rising tuition prices support lucrative pay packages for professors.
I’m sure a Congressional hearing is forthcoming, right?