60 Minutes Misleads Viewers About the Price of Prescription Drugs Paid By Medicare

National Center for Public Policy Research

April 3, 2007

Washington, D.C. - On April 1, 2007, the CBS News program 60 Minutes broadcast a segment on prescription drug prices that relied heavily on a flawed report written by a group with a clear political motive. Producers of the program did so despite the repeated warnings of The National Center for Public Policy Research that the report could not reliably justify its conclusion.

"60 Minutes had its storyline," says David Hogberg, a senior policy analyst with The National Center for Public Policy Research, "and it wasn't going to let facts get in the way. If it was supposed to be an April Fool's Day prank, the producers of 60 Minutes never let viewers in on the joke. Instead, it provided yet another example as to why the American public increasingly does not and should not trust the mainstream media."

In the segment, entitled "Under The Influence," 60 Minutes reporter Steve Kroft used a misleading report from the left-wing advocacy group Families USA to portray the pharmaceutical industry as fleecing the American taxpayer. The January 2007 Families USA report, "No Bargain: Medicare Drug Plans Deliver High Prices," purports to show that Medicare pays much higher prices for prescription drugs than the Veterans Administration (VA). The VA essentially dictates the prices it pays for prescription drugs in a manner advocated by congressional liberals as a replacement for the Bush Administration's Medicare Part D program.

When the Families USA report was first released, The National Center responded pointed out how the group distorted the data to reach its conclusion. As a July 12, 2007 National Center press release noted,

the Medicare drug price data used in the report to compare Medicare drug costs to the VA's drug costs come from only two counties - Montgomery County, Maryland and Hamilton County, Ohio. Based on median household income, both counties are above the national average. Montgomery County, for instance, is the fourth-richest county in the nation. Since wealthier areas, on average, tend to pay higher prices, Families USA's use of these counties as the source of their sample data all but guarantees that the Medicare drug prices data in their study will be exaggeratedly high.

In an e-mail sent out on March 28, Families USA boasted that the segment on 60 Minutes relied on its "No Bargain" report. After receiving that e-mail, Hogberg attempted to warn 60 Minutes that is was relying on a questionable piece of research - twice calling 60 Minutes producers and also sending them a fax and two e-mails pointing out The National Center's complaints about the Families USA report.

In one e-mail, Hogberg told 60 Minutes producers, "I want to emphasize that if you use the report in your segment, in the interest of journalistic objectivity you should have someone on the segment disputing its findings." When it aired, however, the 60 Minutes segment did not feature anyone disputing the Families USA report. Rather, reporter Steve Kroft chose not to question the report at all, instead saying, "Families USA reported in a January study that Medicare patients are being charged nearly 60 percent more for the top 20 drugs than veterans pay under a program run by the Veterans Administration."

"It really makes you wonder how committed CBS News is to journalistic integrity," says Hogberg. "After receiving ample warning that a report is flawed, one would think 60 Minutes would at least have someone on the show disputing the reports finding. In the wake of the Dan Rather-Bush National Guard fiasco, one would expect them to be a lot more careful with their research."

Adding insult to injury, 60 Minutes also misled viewers about the political ideologies driving Families USA. In the segment, Steve Kroft called the group a "non-partisan health care watchdog group." In fact, the group's executive staff and board of directors are filled with current and former Democrat politicians, Clinton Administration appointees and union executives who disproportionately fund Democrat candidates.

"Families USA was made out to be a disinterested, objective organization," Hogberg says. "It completely obscures the fact that Families USA is a left-wing organization with an agenda of increasing government involvement in health care. Apparently, they are all too happy to flack for any left-wing interest group."

The National Center's David Hogberg is the author of The National Center for Public Policy Research National Policy Analysis paper, "Letting Medicare "Negotiate" Drug Prices: Myths vs. Reality." The paper is available online at www.nationalcenter.org/NPA550MedicareDrugPrices.html.

The National Center for Public Policy Research is a non-partisan, non-profit educational foundation established in 1982 and based in Washington, D.C.