Later On

A blog written for those whose interests more or less match mine.

The unreported aspects of the Trump pharma deal (that fell through)

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One problem with many news reports is that the reporter lacks sufficient knowledge to file a meaningful report — like having a lifestyle reporter cover a science conference: the reporter misses the significance of what’s going on, doesn’t know what questions to ask, is unaware of the significance of information that’s not mentioned, doesn’t understand the implications of what is said, and so on.

That seems to be what happened when the NY Times reported on Trump’s pharmaceutical deal. Kevin Drum explains in this post in Mother Jones:

The New York Times reports that although President Trump was close to a deal with pharmaceutical companies that would reduce drug costs by $150 billion, the deal broke apart at the last minute when he also insisted that they pay for $100 “cash cards” for all seniors before the election. But why was this a deal breaker?

Some of the drugmakers bridled at being party to what they feared would be seen as an 11th-hour political boost for Mr. Trump, the people familiar with the matter said….One drug company executive said they worried about the optics of having the chief executives of the country’s leading pharmaceutical makers stand with the president in the Rose Garden as he hoisted an oversized card and gloated about helping a crucial bloc of voters.

Observant readers should immediately notice two suspicious things about this narrative. First, $150 billion is more than pharma companies earn from the entire American market. A deal of that size would wipe out their profits completely.

Second, . . .

Continue reading. Note how the reporter accepted at face value what “people familiar with the matter said.” The reporter probably felt that his/her report was good — that is what those people said — but lacked the subject-specific knowledge (in this case, business knowledge in general and knowledge of the corporate culture of Big Pharma in particular, along with ignorance regarding the intricacies of corporate finance) to know that what those people said didn’t make any sense.

Written by Leisureguy

20 September 2020 at 6:53 am

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