Bad journalism
by CarolineGlaxoSmithKline (GSK) is in $3 billion worth of hot water over a laundry list of ethical and criminal violations related to a drug that was found to cause heart problems.
I used to help coordinate some logistics for pharmaceutical dinner programs, and it’s really like a game of chicken with the FDA spending limits. The GSK offenses included in this settlement are, the company alleges, old and outmoded and no longer GSK’s modus operandi, but who can say?
Here’s something interesting though:
GlaxoSmithKline, with a market value of more than $110 billion, had net profit of about $5 billion on sales of $43 billion in the year ending Sept. 30. [...]
Frances H. Miller, a Boston University law professor and health policy expert, said, “Although $3 billion is a very big number in terms of drug industry settlements, it’s not a very big number in relation to almost $50 billion in annual revenue for the world’s fourth-largest pharmaceutical company.”
A company’s annual revenue has almost no bearing on its profit margins! I could make $100 billion a year and spend out $99.99 billion on costs. Moreover, $43 billion in sales is NOT “almost $50 billion” — in my personal school of mathematics, we don’t just round up almost a sixth. This quotation is an inflammatory soundbyte at best, because the bottom line is that this settlement eats up 60 PERCENT of GSK’s annual profits. That’s an enormous blow! Doesn’t a recordbreakingly huge criminal settlement stand on its own as a news story, without painting it as, still, some kind of financial underreach?
Don’t get me wrong, I believe in this settlement, and I believe there should have been prison time on the table for the responsible parties at GSK. But I don’t believe in misleading journalism or the glossing over of important numbers
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