Bloomberg: Selling a Truck to Detroit’s Loyal Owners May Be Tesla’s Toughest Challenge Yet
A year before Elon Musk was ready to unveil Tesla’s first pickup model, the chief executive officer was setting a low bar for the amount of demand it will draw. Dig into the dynamics of the fiercely competitive and tough-to-crack U.S. truck market, and it’s easy to see why. Late Thursday, Musk will start his ascent up arguably the toughest hill Tesla has tried to climb yet with the debut of Cybertruck. He cautioned in November of last year that he wasn’t sure if a lot of people will buy the pickup and in June said the design won’t be for everyone. “An electric pickup truck needs to meet the needs and capabilities of current pickup trucks and deliver a little bit more,” Stephanie Brinley, an IHS Markit analyst, said by phone. “A traditional pickup-truck buyer may consider electric, but they are not going to give up on capability.” Detroit automakers aren’t waiting for Musk to take the wraps off his truck before starting to talk a little trash. Thirteen months after the Tesla boss tweeted that his pickup will boast 300,000 pounds of towing capacity, Ford released a video of an electric F-150 prototype dragging 1 million pounds of double-decker rail cars. Ahead of this week’s Los Angeles Auto Show, the vice president of marketing for General Motors’ GMC brand doubted Tesla’s pickup will be in the same league. Musk told a Tesla enthusiast podcast earlier this year that he wants his truck to start at less than $50,000. Not all of his comments about the pickup have moderated expectations: During an October earnings call, he declared it will be the company’s “best product ever.” Tesla probably won’t have the electric-truck market to itself for long, if at all. Amazon-backed Rivian Automotive plans to launch its R1T pickup late next year. Ford has vowed to start selling hybrid-electric and battery-electric versions of the F-150 starting in 2020, and GM has committed to producing plug-in pickups at a plant it had been planning to shutter in the Detroit area. Battery prices will have to drop significantly for electric trucks to reach parity with combustion engine-powered pickups, according to Dan Levy, an analyst at Credit Suisse.
Bloomberg: Doctors Who Helped Develop Heart Drug Now Balk at $225,000-a-Year Price
Doctor Mathew Maurer stood at a lectern in front of an audience of fellow cardiologists in Philadelphia, decrying the price of a new medication that had the potential to help many of his heart-failure patients. The drug, Pfizer Inc.’s tafamidis, cost $651 a day, Maurer told them—equal to a patient’s food budget for a month. Drugs don’t work if people can’t afford to take them, he said, and the pharmaceutical company’s $225,000-a-year price was well out of bounds. Maurer isn’t just any critic. A professor at Columbia University Irving Medical Center, he worked closely with Pfizer to develop the breakthrough drug. He was the lead author on a pivotal, company-funded scientific study that got tafamidis approved earlier this year. Bloomberg spoke to Maurer and three other doctors involved in tafamidis’s company-funded clinical trials who have since become critics of the drug’s price after seeing patients’ early financial struggles since it was approved in May. They argue tafamidis may be given to far more people than anticipated, will be taken by patients for years or decades. While criticism of drugmakers by patients is common, it’s far rarer for academics who helped lead development of a therapy to turn into antagonists of the same company that funded the
research. The company’s decision has prompted a new round of questions about what it’s proper to charge for an innovative medicine. “We can agree to disagree,” Maurer said, “but I had told them I thought $25,000 a year would have been a reasonable cost.” By the end of his talk, Maurer joked that he might no longer be involved in an ongoing tafamidis trial, and might even need a new way to fill his days.
Bloomberg: Charles Schwab to Buy TD Ameritrade for $26b
Charles Schwab Corp. is buying TD Ameritrade Holding Corp. for $26 billion. A deal would create a firm with roughly $5 trillion in combined assets, consolidating an industry under pressure from a price war that escalated when Schwab last month announced plans to eliminate commissions for U.S. stocks, exchange traded funds and options. The move forced other brokerages to follow suit and triggered a slump in the shares of such firms, with TD Ameritrade among the hardest hit.