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August 29, 2023 Heather Cox Richardson
“For far too long, Americans have paid more for prescription drugs than any major economy. And while the pharmaceutical industry makes record profits, millions of Americans are forced to choose between paying for medications they need to live or paying for food, rent, and other basic necessities. Those days are ending,” President Joe Biden declared today.
The government announced the first ten drugs whose prices it will negotiate with pharmaceutical companies for about 65 million Medicare recipients. Until now, the United States has been virtually alone as the only country in which the government did not negotiate or regulate medicine prices, instead allowing companies to set whatever prices they believe the market will bear. Since their products often are the difference between life and death, it turns out the market will bear quite high prices, but—as Biden observed—those prices often force consumers to sacrifice in other ways to afford them.
A 2021 study by the RAND corporation found that drug prices average 2.56 times higher in the U.S. than in 32 other countries. For name brand drugs, U.S. prices were 3.44 times those in comparable nations.
As Amy Goldstein and Daniel Gilbert explained today in the Washington Post, when Congress created Medicare and Medicaid in 1965 as part of President Lyndon B. Johnson’s Great Society program, it covered drugs administered in a health care setting but excluded those a patient took at home. In 2003, after almost 40 years of medical innovation had significantly changed our management of chronic illnesses, Congress included those drugs under a separate Medicare plan—Part D—or as part of managed-care plans, but to get Republicans behind the bill, Congress explicitly prohibited the government from negotiating the prices of medications.
In 2021 a nearly three-year investigation by the House Committee on Oversight and Reform, then overseen by Democrats as they held the majority in the House of Representatives, concluded that “[d]rug companies have raised prices relentlessly for decades while manipulating the patent system and other laws to delay competition from lower-priced generics. These companies have specifically targeted the U.S. market for higher prices, even while cutting prices in other countries, because weaknesses in our health care system have allowed them to get away with outrageous prices and anticompetitive conduct.”
Republicans sided with the drug company executives who insisted that high prices were necessary to create an incentive for drug companies to innovate, as their investment in research and development depends on the revenue they expect from new drugs. But the committee’s report said their investigation concluded that “sky-high drug prices are not justified by the need to innovate. The largest drug companies spend more on payouts for investors and executives than on research and development. And many blockbuster drugs rely on scientific discoveries from research funded by taxpayers, while drug companies’ R&D spending often focuses on minor changes to extend patent protection and block lower-priced competitors.”
In 2022, Democrats passed the Inflation Reduction Act without a single Republican vote. That law permits the government to negotiate with pharmaceutical companies over drug prices the government will pay.
The ten drugs listed in today’s announcement are among those with the highest total spending in Medicare Part D, and today the Department of Health and Human Services released a report that 9 million seniors paid a total of $3.4 billion for these drugs in 2022. The Congressional Budget Office, the nonpartisan agency that provides budget and economic information to Congress, estimates that government negotiation over these drugs will save taxpayers about $98.5 billion over ten years. If a drug maker refuses to negotiate, it either will face a significant tax or must withdraw from Medicare and Medicaid.
This measure is extraordinarily popular. More than eighty percent of Americans want the government to be able to negotiate drug costs.
The new negotiated prices are scheduled to go into effect in 2026. Pharmaceutical companies are suing to stop the law, claiming it is unconstitutional, although when asked by reporters today about the lawsuits, domestic policy advisor Neera Tanden pointed out that the government “negotiates prices for every other element” Medicare covers of the health care system,, including rates for doctors, other providers, and hospitals. “The only reason why Medicare has not been negotiating drug prices is because Pharma got a sweetheart deal decades ago to basically prohibit negotiations,” she said. “Negotiations are part of [a] market system. It’s very normal for that to happen.”
“This plan is a key part of Bidenomics, my economic vision for growing the economy from the middle out and the bottom up—not the top down,” Biden said. “And it’s working.”
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Notes:
https://www.cbo.gov/publication/57126
https://www.kff.org/health-costs/poll-finding/public-weighs-in-on-medicare-drug-negotiations/
https://www.rand.org/news/press/2021/01/28.html
https://www.washingtonpost.com/health/2023/08/29/medicare-drug-price-negotiations/
https://www.pharmexec.com/view/astrazeneca-joins-legal-battle-against-ira
https://www.politico.com/news/2023/08/29/biden-drug-prices-gop-00113404
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The ‘Wild, Wild West’ of the American Egg Donor Industry Rina Raphael
Kaylene Breeding was always driven by a desire to help other women. In her twenties, she spent years volunteering at women’s charities. That’s when an idea she had considered since high school—donating her eggs—seemed like the “next step” in her volunteering. She would be helping a family in the “utmost way possible,” she recalls thinking.
Breeding, now 36, first heard about egg donation when she was a teenager and her local radio station in Oregon constantly aired commercials inviting young women to become donors. Breeding told me that when she reached her late twenties and wasn’t ready to have children, she decided to do something good with her eggs in the meantime.
Breeding donated her eggs six times. Twice these were “altruistic egg donations,” meaning she was paid by the recipient only for her medical and travel expenses. Her payment for the other donations was between $7,500 and $9,000. Out of all these donations, only one resulted in children. That was a set of twins born to a gay male couple in Israel. All she knows about the children is that they were born.
Today, Breeding, who has no children of her own, is struggling with her own compromised fertility. She is facing a hysterectomy because of severe endometriosis and adenomyosis, debilitating conditions in which endometrial tissue grows where it shouldn’t. She’s in chronic pain during exercise, ovulation, and sex.
Breeding’s doctors believe this is the result of donating her eggs, which required pumping her body with sky-high levels of estrogen. Believe is the key word here, as they can’t quite confirm it. There is little research on the long-term medical consequences of egg donation.
By now Breeding, who works in the aviation industry, knows a lot about those consequences. She is a moderator and administrator of We Are Egg Donors, a private Facebook support and advocacy group that counts over 2,000 past and current members. She reads many stories similar to hers of post-donation medical conditions. “Nobody wants to do the research because, frankly, I’m assuming they’re afraid of what we would discover,” she told me.
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A Chinese national, charged with fraud by the SEC, just sent Donald Trump $18 million Judd Legum
Chinese Crypto entrepreneur Justin Sun paid $6.2 million for a banana — sold by Sotheby’s as conceptual art — and then ate it last Friday.
The banana is not Sun’s most notable recent purchase.
On November 25, Sun purchased $30 million in crypto tokens from World Liberty Financial, a new crypto venture backed by President-elect Donald Trump. Sun said his company, TRON, was committed to “making America great again.”
World Liberty Financial planned to sell $300 million worth of crypto tokens, known as WLF, which would value the new company at $1.5 billion. But, before Sun’s $30 million purchase, it appeared to be a bust, with only $22 million in tokens sold. Sun now owns more than 55% of purchased tokens.
Sun’s decision to buy $30 million in WLF tokens has direct and immediate financial benefits for Trump. A filing by the company in October revealed that “$30 million of initial net protocol revenues” will be “held in a reserve… to cover operating expenses, indemnities, and obligations.” After the reserve is met, a company owned by Donald Trump, DT Marks DEFI LLC, will receive “75% of the net protocol revenues.”
So before Sun’s purchase, Trump was entitled to nothing because the reserve had not been met. But Sun’s purchase covered the entire reserve, so now Trump is entitled to 75% of the revenues from all other tokens purchased. As of December 1, there have been $24 million WLF tokens sold, netting Trump $18 million.
Sun is also joining World Liberty Financial as an advisor, making Sun and the incoming president business partners.
While Trump has the cash, Sun’s tokens are effectively worthless. To comply with U.S. securities law, WLF tokens are “non-transferable and locked indefinitely in a wallet or smart contract until such time, if ever, [WLF tokens] are unlocked through protocol governance procedures in a fashion that does not contravene applicable law.” The only thing that Sun can do with his tokens is participate in the “governance” of World Liberty Financial. Right now, the only thing World Liberty Financial does is sell tokens.
Any foreign national paying an incoming president $18 million weeks before entering the White House should raise red flags. Sun’s purchase is even more alarming because the Securities and Exchange Commission (SEC) is currently prosecuting him for fraud.
The SEC’s ongoing prosecution of Sun
On March 22, 2023, the SEC charged Sun and three companies he owns. The SEC accused Sun of marketing unregistered securities and “fraudulently manipulating the secondary market” for a crypto token “through extensive wash trading.” Wash trading involves “the simultaneous or near-simultaneous purchase and sale of a security to make it appear actively traded without an actual change in beneficial ownership.” In other words, according to the SEC, Sun made it seem like there was a lot of interest in crypto tokens he issued when much of the trading was fraudulent and manufactured by Sun.
The SEC also charged Sun with “orchestrating a scheme to pay celebrities to tout” his crypto tokens “without disclosing their compensation.” Federal law requires people who endorse securities to “disclose whether they received compensation for the promotion, and to specify the amount.” The celebrities involved included Lindsay Lohan, Jake Paul, and Soulja Boy.
Lohan paid $40,000, and Paul paid about $100,000 to settle the charges against them without admitting liability. Soulja Boy did not respond to the lawsuit, and a default judgment was issued against him.
Sun posted on X that he believes the SEC “complaint lacks merit” and complained that “the SEC’s regulatory framework for digital assets is still in its infancy and is in need of further development.”
The litigation against Sun is ongoing, with a federal judge considering a motion by Sun’s attorneys to dismiss the charges. The current SEC Chairman, Gary Gensler, who announced the charges against Sun, will step down when Trump takes office in January. A new SEC commissioner appointed by Trump could settle or dismiss the charges against Sun.
How Trump can use the power of the presidency to unlock hundreds of millions in profits for himself
Through World Liberty Financial, Trump can reap massive personal profits from creating a more permissive regulatory environment for crypto ventures.
In addition to his 75% share of revenues over $30 million, Trump’s company was also awarded 22.5 billion WLF tokens. At the current sale price, these tokens are worth more than $300 million. That is more than 20 billion tokens being offered for sale publicly. (This makes the “governance” value of WLF tokens, which was already questionable, effectively worthless. No matter how many tokens you own, Trump will always be able to outvote other token holders.)
Right now, Trump’s tokens — like those purchased by Sun — are worthless because they cannot be transferred. But Trump could appoint a new SEC chairman who is friendly to the crypto industry and who would create new rules allowing the WLF tokens and similar crypto assets to be legally traded. If the price of the tokens increases when they hit the open market, which is a possibility for a crypto token backed by the President of the United States, the value of Trump’s tokens could be in the billions.
That appears to be exactly the path Trump is taking. WIRED reports that Trump is “asking the crypto industry to weigh in on potential picks.” Among the leading contenders is Paul Atkins, a former SEC Commissioner, who, since leaving the agency in 2008, has run a consulting firm that works with crypto companies. Atkins is also co-chair of the Token Alliance, an initiative of the Chamber of Digital Commerce, the lobbying group for the crypto industry. He is also a member of the Chamber of Digital Commerce’s Board of Directors.
Another top contender, former SEC General Counsel Robert Stebbins, has said that the SEC should “pause most of its crypto lawsuits while clearing a path for the firms to do business without the overhang of litigation.” But Stebbins’ candidacy underscores the need for Sun to forge a favorable relationship with Trump. Stebbins acknowledged that, even if it takes a more permissive view toward the crypto industry, it may want to consider continuing to pursue litigation involving fraud.
Major media outlets obsessed with banana, ignore Sun’s payment to Trump
A foreign national under federal fraud prosecution making a purchase that results in $18 million cash payment to the president-elect has all the makings of a major scandal. But it has been virtually ignored by several major media outlets.
The New York Times, for example, has published five articles about Sun’s purchase of the banana but none about Sun’s $30 million purchase of WLF tokens and his business partnership with Trump. The Washington Post has published three articles about the banana, but its coverage of Sun’s purchase of WLF tokens was limited to one short paragraph in a larger editorial about the crypto industry. (The paragraph does not explain how Trump personally profits from Sun’s token purchase.) The Wall Street Journal did publish a short piece about Sun’s token purchase on its “Live Update” blog, but the piece was not viewed as significant enough to be included in the print edition. The paper published two articles, plus a video, focused on the banana. One of the Wall Street Journal articles about the banana was published on the front page of the paper.
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Poetic Justice for Jay Bhattacharya. Plus. . . Joe Nocera
It’s Monday, December 2. This is The Front Page, your daily window into the world of The Free Press—and our take on the world at large. Coming up: Biden pardons Hunter, is Tulsi Gabbard really a Russian asset?, a migrant gang member robs a New York prosecutor and smiles about it, plus much more.
But first: Karma comes to the National Institutes of Health.
If you’re a regular reader of The Free Press, you know Stanford University scientist Jay Bhattacharya, Donald Trump’s pick to run the NIH, is someone we admire. In 2020, when most scientists who doubted lockdowns and school closings were the right response to Covid-19 were too afraid to speak up, Bhattacharya was fearless in his dissent. In October 2020, he was one of three co-authors of the Great Barrington Declaration, which proposed a strategy of protecting the most vulnerable but otherwise reopening the country. For suggesting such “heresy,” Bhattacharya was attacked by the media and dismissed by many of his fellow scientists. He and his co-authors were also the target of fury inside the NIH, with its then-head Francis Collins calling for a “take down” of the declaration’s ideas.
Shamefully, in a country that claims to value free speech, Bhattacharya was also censored by the big social media companies. As we note in an editorial today, “the company now known as X put Bhattacharya’s account on a Trends Blacklist, which dramatically suppressed the visibility of his posts. YouTube, meanwhile, censored a video of a public policy roundtable with Bhattacharya and Florida governor Ron DeSantis because the Stanford scientist suggested—correctly—that the evidence for masking children was weak. Google, Reddit, and Facebook also censored mere mentions of the Great Barrington Declaration.”
We now know that the three authors of the declaration had it right all along. So it feels like poetic justice that a man who was smeared and censored by the country’s medical establishment has been nominated to run the very agency that called for his takedown. The critics are still howling, but we’re convinced he’s the right man for the job.
Read our editorial, “Poetic Justice for Jay Bhattacharya.”
The Tulsi Gabbard Smears Are Unfounded, Unfair, and Unhelpful
In the days and weeks to come, Team Trump will announce more nominations, and we will cover the major ones. Today, along with Jay Bhattacharya, we’re looking at the case of Tulsi Gabbard, who was nominated last month for director of national intelligence—a role that will put her in charge of the entire intelligence community.
In the midst of two hot wars and more trouble brewing across the globe, this appointment could not be more important. Consider what’s happening now in Syria, where rebels have overtaken much of Aleppo, the country’s largest city, and continue to make inroads elsewhere in the country amid fierce fighting. It doesn’t inspire confidence that, while serving as a member of Congress in 2017, Gabbard met with Syrian president Bashar al-Assad—the man who killed hundreds of his own people, including children, with chemical weapons four years earlier. Furthermore, after Russia invaded Ukraine in February 2022, rather than rebuking Vladimir Putin for his aggression, Gabbard announced in a video message that “It’s time to put politics aside and embrace the spirit of aloha.”
For Gabbard’s critics, this proves she not only holds contrarian foreign policy views, she’s a full-on Russian asset. Meanwhile, our columnist Eli Lake is having none of it. As he points out in his piece today, Gabbard is a lieutenant colonel in the U.S. Army Reserve who served in Iraq, and a patriot who should be given the chance to explain her beliefs in a confirmation hearing. “If she persuasively clarifies how her views have developed, then she should have the chance to serve,” he writes. Read Eli’s piece on why the smears against Gabbard are “unfounded, unfair, and unhelpful.”
“No Wonder He’s Smiling. He’s Gotten Away with It So Many Times.”
Brandon Simosa is one of the nearly 215,000 migrants New York City has taken in since spring 2022—a result of the Biden administration’s lenient border policies. On November 19, the 25-year-old Venezuelan was arrested for robbing a woman in her apartment building and masturbating in front of her while she stood terrified, cowering in the corner of her stairwell.
It gets worse. Simosa is a member of Tren de Aragua, the violent Venezuelan cartel that is sparking a crime wave across the U.S. And even though he arrived in the city only last June, Simosa had previously been arrested six times. Each time, he was set loose upon the city to wreak more havoc.
But this time, Simosa chose the wrong victim. The woman he robbed, who has not been identified, works for Manhattan district attorney Alvin Bragg, the man whose job it is to put criminals like Simosa in prison. And yet here, the irony is extra thick, because Bragg isn’t locking up as many criminals as his predecessors did. In fact, that’s exactly what Bragg set out to achieve. After he took office on January 3, 2022, he explicitly stated that several crimes, like prostitution and resisting arrest, would get a pass on his watch.
Now, New York City “is a great place to set up shop for a criminal,” said Hannah Meyers, a former counterterrorism officer for the NYPD who is now the director of policing and public safety at the Manhattan Institute. She says the case of Simosa is “a striking parable of how completely we’ve ceded law and order in this city.” Read Olivia Reingold’s piece on Simosa and the Big Apple’s big problem with migrant crime.
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On Sunday, with just 49 days left in his presidency, Joe Biden broke a promise to the American people: He issued a “full and unconditional pardon” to his son Hunter even though he vowed he would never grant him clemency for his crimes. This month, Hunter was due to be sentenced for three gun and tax felonies, for which he faced a total of 42 years in prison and $1.35 million in fines. Instead, Hunter will face no punishment for any offenses “he has committed or may have committed” from January 1, 2024 through December 1, 2024. Explaining his reasoning behind the pardon, Biden used an argument straight out of the Donald Trump playbook: He said his son was “treated differently” by the Justice Department. “From the day I took office, I said I would not interfere with the Justice Department’s decision-making, and I kept my word even as I have watched my son being selectively, and unfairly, prosecuted.” Our own Eli Lake, who has written extensively about the use of lawfare against Trump, believes that Hunter has actually been the beneficiary of the opposite treatment: favoritism. Case in point: The Justice Department hit Trump advisers with charges under the Foreign Agents Registration Act during the bogus Russia hoax scandal, but Hunter was never charged with any wrongdoing under that act even though he made millions lobbying foreign countries when his dad was vice president. As news of the pardon hit, even the Democratic governor of Colorado, Jared Polis, said he was “disappointed” by Biden’s decision to “put his family ahead of the country.” In a tweet late on Sunday, Polis wrote that he understands Biden’s “natural desire to help his son by pardoning him,” but “this is a bad precedent that could be abused by later presidents and will sadly tarnish his reputation.”
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One year after Hamas invaded Israel, killing 1,200 and taking over 250 hostage, 63 remain in captivity in Gaza. On Saturday, it was confirmed that 20-year-old Israeli American Edan Alexander is among them, after Hamas released a propaganda video showing him speaking out for the first time. In the video, Alexander begs Prime Minister Benjamin Netanyahu and president-elect Donald Trump not to forget him and his fellow hostages. Afterward, his mother Yael told thousands at a Tel Aviv rally that “My Edan, my love, we miss you so much.” She added that Netanyahu called her and “assured me that now, after the deal in Lebanon, the conditions are ripe to release you and bring you home”—referring to the 60-day ceasefire agreement between Israel and Hezbollah that has ended 13 months of armed conflict. Israel’s war with Hamas continues unabated for now.
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Former presidential candidate—and newly appointed government cost-cutter—Vivek Ramaswamy slammed New York City for spending $220 million to turn the Roosevelt Hotel in Manhattan into a migrant shelter. The hotel, dubbed the “new Ellis Island,” has been housing illegal immigrants and asylum seekers in its 1,250 rooms since May 2023. In dire need of repair, the hotel is owned by the Pakistani government, which is using the $220 million in rent to avoid defaulting on its international debt, part of a bailout package from the International Monetary Fund.
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Donald Trump’s latest controversial nomination, Kash Patel for head of the FBI, is getting early support from Republican legislators. In an announcement on Saturday, Trump cited Patel’s efforts to expose “the Russia hoax,” as the president-elect calls it, as an example of his commitment to the Constitution and agency reform. Patel, a former federal prosecutor and public defender, said he would “shut down the FBI Hoover Building on day one, and reopen it the next day as a museum of the deep state.”
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Pro-Trump columnist Scott Jennings is joining the editorial board of the Los Angeles Times amid the paper’s post–Election Day reckoning. The paper’s owner, Dr. Patrick Soon-Shiong, extended the invitation to Jennings after announcing his intention to make the newsroom more balanced. Jennings’ appointment follows the public resignations of three board members in the wake of Soon-Shiong’s decision not to endorse either presidential candidate.
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After months of heated debate, the United Kingdom’s parliament voted to allow medically assisted suicide for terminally ill patients. However, some disabled people are afraid the new law is not neutral, and could put pressure on vulnerable patients to end their lives—creating a slippery slope toward future bills sanctioning euthanasia for the disabled, the poor, and the depressed. For a deeper dive into the national conversation on this bill, read Madeleine Kearns’ piece, “Should a Government Help People Die?”
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Russian and Syrian forces launched air strikes yesterday on rebel territory in northwest Syria, leaving more than 300 dead, including 20 civilians. The rebels, who captured Aleppo in a surprise attack, now control a broad stretch of land in the west and northwest of the country. Their breach of Aleppo has reignited the Syrian civil war and given insurgent militias the first upper hand since their nadir in 2016, when Assad’s government recaptured the part of the city controlled by rebels.
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In one of those annual rituals that rank right up there with Groundhog Day, the Oxford University Press, which publishes the Oxford English Dictionary, has announced its word of the year: brain rot. According to the BBC, “It is a term that captures concerns about the impact of consuming excessive amounts of low-quality online content, especially on social media. The word’s usage saw an increase of 230 percent in its frequency from 2023 to 2024.” Other contenders included demure, dynamic pricing, and romantasy (romantasy?). We do have one question: Isn’t brain rot two words?
The Making of America’s Most Famous Cheerleaders
The Dallas Cowboys Cheerleaders aren’t just a famous pom-pom squad. They’re an American icon that has performed live with Dolly Parton and the band Queen, and danced to AC/DC’s “Thunderstruck” for more than 41.8 million viewers at home. Wannabe members face a lower acceptance rate than most Ivy League schools. But it wasn’t always this way.
Back in 1991, one woman transformed the DCC from a dance team burning through cash into a fully-fledged operation with the brand recognition of a Fortune 500 company.
That woman is Kelli Finglass, the director of the Dallas Cowboys Cheerleaders, who is somewhere between a drill sergeant and a mama bear. In a new episode of Honestly, Bari met with Finglass and asked her lots of burning questions, such as: How did she create a team culture of dedication and precision? What’s the line between compassion and hard-nosed management? And how does she retain America’s best dancers when any of them could easily achieve TikTok stardom overnight?
“I personally like people that want to be a part of a team and aren’t just trying to get followers,” Finglass told Bari. Click below to hear their full conversation.
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Joe Nocera is the deputy managing editor of The Free Press and the co-author of The Big Fail. Follow him on X @opinion_joe, and read his piece, “How a French Whale Made $85 Million off Trump’s Win.”
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