Yes indeed, angel, we could diagram that answer conditionally. That would look something like this:
Deregulation has Beneficial Results
Narrowly Focused
The problem with this answer is not so much the reference to beneficial results, but the use of "only". There is nothing in the stimulus to suggest that broader deregulation efforts would have no beneficial results, but only that it would have at least some detrimental ones. E is just to narrow an answer here, and too strong, to describe what role the sentence in question was playing.
The other reason that E is wrong is that D is simply a better answer. Your prephrase should have been something like "a premise that supports the conclusion in the next sentence, that deregulation could lead to fewer medicines." Remember to always prephrase, and to select the best answer, not just any answer that might work.
Keep at it!
Adam M. Tyson
PowerScore LSAT, GRE, ACT and SAT Instructor
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