As we were working away on our 40th anniversary issue, we got a new lead from an unusual venue on a 40-year-old Guardian story: Hearst was once again blacking out major stories to protect its corporate interests. And this time, the Hearst blackout was helping bolster a key point in the Clint Reilly/Joe Alioto antitrust suit aimed at breaking up the emerging Hearst/Media News Group/Dean Singleton conglomerate that would put a hammerlock on the Bay Area newspaper business.
The key point: that the Hearst/Chronicle and the Singleton papers that now ring the Bay aren’t competing, as the two publishers loudly claim, and they aren’t going to as long as there is an economic/financial umbilical cord tying them together. To explain:
The Wall Street Journal reported in a lead front page story on Oct. 6th that two Bay Area companies, Hearst and McKesson Corporation, were accused in a major federal case in Boston of inflating the cost of prescription drugs by an estimated $7 billion. The Journal reported that a Hearst subsidiary, a drug data publishing company called First DataBank, in San Bruno, had reached a settlement with a group of unions in Massachusetts and Pennsylvania over how the company gathered and presented prices in the pharmaceutical catalog it has published for years. First DataBank/Hearst price listings play an enormous role in determining what Americans pay for medications.
As G. W. Schulz makes clear in his Guardian story, “A tough pill to swallow, how a drug data publisher owned by media giant Hearst inflated the cost of medicine,” this is a major story for anybody anywhere who is agitated over the ever escalating price of prescription drugs. Moreover, it was a major local story because it involved two big San Francisco companies and a third company just down the Peninsula in San Bruno. Still more: when George started checking out the story, he found that there were more Hearst clinkers: Hearst was fined $4 million in 200l, the highest pre-merger antitrust fine in U.S. history according to Justice, for failing to turn over key documents during its monopoly move to purchase a medical publishing subsidiary. Hearst was also forced by the Federal Trade Commission to unload the subsidiary to break up its monopoly and disgorge $l9 million in profits generated during its ownership. Hot stuff. And particularly so since Justice and the AG claim to be closely investigating the terms of the Hearst/Singleton monopoly arrangement. Yet Hearst blacked out the stories-and the Singleton papers are not as yet pursuing the stories with the vigor of real competitive papers.
So the questions pop up: Will Justice and the California AG, given the recent Hearst transgressions, bear down harder on a Hearst deal aimed at destroying daily competition and imposing regional monopoly in the Bay Area? Will they disclose the documents and the results of their investigations? Questions to Hearst corporate in New York and Singleton corporate in Denver: Why didn’t you allow your city desks and business desks to cover this major local story involving prescription costs that affect most everybody? Will you now? If not, why not? Or do you want people to read the story only in the local independent alternative paper? B3
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