$100M Fraud Case Over ADHD Meds & The Pope Gives Warning on... AI

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0:27Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, the feds crack down on telehealth startups hawking easy access to Adderall on TikTok. Then HBO went all in on an over-the-top marketing campaign for House of the Dragon. Can the show help the network dominate Sunday nights again? It's Monday, June 17th. Let's ride.

0:52So the Euros are going on in Germany right now, one of the biggest international soccer tournaments in the world. And you may have seen some incredible fan interactions on social media already. The one that went viral over the weekend was a clash between supporters of Albania and supporters of Italy before their match, where Albanian fans made a big show of breaking uncooked spaghetti in half in front of a group of Italian fans. It was all in good fun, and the Italians played their part well, falling to their knees in response to the culinary banter. It was funny, Neil. It was funny, but I am just relieved they didn't bring over a pizza oven and start making pineapple on pizza or drink a cappuccino after 11 a.m.

1:32That could have led to an international incident on our hands. So, okay, Toby, what would you do if you were other countries? Bolivia plays the USMNT, the US Men's National Team, in the Copa America on Sunday. How would you get in our heads? What would your psychological warfare be? I feel like America is pretty easy. Just ask the average fan to explain offsides or do a chant other than USA, USA. That's all we got. If you want to go culinary, it's tough because we're pretty open-minded in America. The one thing that came to mind, though, is just cook a steak well done and saw a steak well done in front of Americans.

2:07That would cause maybe an international incident. But, yes, all in good fun. We do love to see the banter around these tournaments. Now let's talk Yahoo Finance. I got a text from my girlfriend's mom the other day. Sounds like we're about to hear a horror story. No, this was actually fine. This was a stock pick. She said she had a gut feeling about this one company, and I should check it out. Okay, so you're not giving us the name? Let me finish. First of all, no, I'm not giving you a name, but she texted me about this company, and I kind of go about my day. Fast forward 24 hours later, stock goes nuts.

2:38She was right, up 12 % after hour, new all-time high. Only then do I do what I should have done as soon as she texted me. Hop on Yahoo Finance? Hop on Yahoo Finance. If I had only just done a smidge of research, which Yahoo Finance makes so easy with their news articles in historical data all in one place, I wouldn't be rueing it right now. I like that. New tagline, here we go. Don't rue the day. Check out finance.yahoo.com instead, or download the app on the Play or App Stores. And always listen to your girlfriend's mom. I'm Christian McCaffrey, pro running back, and Abercrombie is an official fashion partner of the NFL.

3:13I'm not kidding when I say NFL by Abercrombie broke the internet last year, and I think this season's lineup is even cooler. And so does my wife, who keeps stealing all my hoodies. Stay fit for the season and Abercrombie's newest arrivals. Shop NFL by Abercrombie in the app, online, and in store.

3:57a criminal drug ring. Last Thursday, the DOJ arrested the founder and head doctor of telehealth company Dunn Global and charged them with scheming to distribute Adderall and other stimulants for ADHD to patients who did not need the medications. And through this alleged fraud, they made a lot of money, more than$100 million in revenue from arranging the prescription of more than 40 million stimulant pills, the DOJ said. This feels like a reckoning of sorts for all the telehealth startups, including Dunn, that sprung up during the pandemic, which was a direct result of the government relaxing rules that required you to go to a doctor in real life to get a prescription for controlled substances.

4:36In fact, it marks the first time that the DOJ has alleged criminal drug distribution involving a telehealth company. So these companies had been under investigation for years. The writing was on the wall. Yeah, it absolutely was. I think a lot of us have seen these ads on social media, too. But you're right. It was this coming together of two big forces here. One was those COVID error policies where you could just hop on Zoom, get this online consultation and be on your way with a prescription in hand. And then on social media, they would pump these videos that you definitely have seen with pithy captions.

5:08Like you started seeing a done provider for your ADHD and became a whole new person who uses her ADHD as a superpower. These are a flavor of ads that I'm sure most people have come across. And what they're doing is essentially funneling you into these very quick and very easy on the line consultations that allow you to snag an Adderall prescription much quicker and much easier than if you would have to go in person to a doctor. Yeah, here are the specifics of what the DOJ is alleging Dunn Global did. They eased access to the drugs by limiting the patient information available to prescribers. They told them to prescribe Adderall and other stimulants, even if the patient didn't qualify for them.

5:47And then they required the prescribing appointments to last no longer than 30 minutes. Plus, they discouraged prescriber follow-up appointments, and they also added an auto refill feature. So these are the sort of taxes that the DOJ is alleging done global and its head doctor and CEO did. And the thing, the background info to all this, too, is that we're in the middle of a prescription drug shortage on a lot of these medications. So already you're contributing to this problem because people who need these drugs can't get them. And now you're putting this influx of demand on an already strained supply chain.

6:24So that's kind of like the additional background context here that makes them just over prescribing these medications even worse than it already was. Dunn Global is not the only one of these telehealth startups. I mean, Cerebral is another one that came under fire after reports by the Wall Street Journal in 2022. I mean, they were, Their business was booming during COVID when all of these rules were relaxed. They 10x their sales. They reached a valuation of$4.8 billion. And then on TikTok from a few months in 2022, they were the third biggest ad spender on the platform. Dunn Global wasn't far behind.

7:02So these companies absolutely blew up and they poured a ton of money, tens of millions of dollars, into ads on these social media platforms. The feds are starting to say, like, you guys took advantage of this particular regulatory loophole to prescribe dangerous meds to people who may not have needed them. Just before the weekend, Pope Francis became the first pope ever to attend a Group of Seven summit that brings together world leaders from the U.S., France, England, and its allies around the world. The topic that the Okta Nigerian, who has said he cannot use a computer, chose to speak on? Artificial intelligence.

7:36It seems an odd choice, but in a wide-ranging speech, Francis touched on everything from the way we conceive our identity as human beings to how AI could democratize knowledge and eventually alleviate the human condition. He even touched on hard policy recommendations, saying he endorsed the need for a set of global principles to govern and guide AI's development. In fact, a document that the Vatican, Microsoft, and IBM signed all the way back in 2020 called the Rome Call for AI Ethics has emerged as the standard of best practices for AI and has helped the G7 as they tried to develop their own code of contact.

8:11Neil, for an old institution with a mixed record on science, to put it lightly, it has been interesting to see the church emerge as a leading voice on AI. Yeah, very odd fellows, the big tech community and the Vatican. But they both you can see what they both need from this. Microsoft and other big tech companies are facing sort of a PR crisis and how AI is being deployed around the world and whether it's safe and whether it's ethical. So if they can get that stamp of approval from the Vatican and the pope has one point three billion people who follow him, then that's a huge win for them. And then the Vatican, on its part, wants to be seen as on the vanguard of a new technology and showing that they view this as a big threat.

8:52But they want to warn about the safety of it and want to make sure that it's human centered. So, yes, very odd that the Pope and Microsoft President Brad Smith are in cahoots a little bit and they take meetings often with each other. And the Pope is addressing AI of all the things that are going on in the world. He chose AI at this big G7 summit. It shows you a little bit why they have engaged in this partnership. Yeah, the church definitely sees an opportunity presented to them from AI as well, because it gives them a chance to reassert themselves as a moral authority. Because let's be honest, their role as a moral authority has been crumbling in recent years, all these sex abuse scandals.

9:30I mean, even these past week, an Italian news source found that Pope Francis was using a slur for gay men in private meetings for a second time. So they've been having this very rocky track record when it comes to being a moral authority. So they're seeing AI as this opportunity to put their foot down, put their stamp down, advocate for this very human centric and human forward and ethical approach to AI. So it's definitely once you start digging beneath the surface, it makes a lot of sense that big tech and the church are getting in on AI. And you mentioned the Vatican's, you know, iffy track record with science.

10:02I mean, the most notable example is that they persecuted Galileo for saying that the Earth revolved around the sun. But on the other hand, they sprouted a lot of universities across Europe, and they also did not formally challenge Darwin's theory of evolution. So I think they want to sort of reflect on what's happened in the past and move forward in a more productive way. And then finally, the last note about this is that the Pope and AI kind of were on a collision course very early on in the advent of AI. I remember we talked about this drippy Pope incident where these images of Pope Francis wearing a Balenciaga puffer jacket started going viral.

10:42And I mean, I always hold it against you, but I remember you saying, I thought this was real because this was like the first wave of mid-journey generated images. And it was the first really, truly good one. So we called it the drippy Pope incident. And so it is funny that now a year and a half later, we're still talking about the Pope, talking about AI in much more serious circumstances this time around. It is CEO pay report season, and the numbers coming in are staggering. Last year, four CEOs of publicly traded companies earned compensation packages worth over$150 million. Those four were John Winklerade of TPG, a PE firm.

11:21Harvey Swartz of the Carlisle Group, also a PE firm. Hocktan of Broadcom, which is a semiconductor data center company, and Nikesh Aurora of Palo Alto Networks. But also, thanks to new rules that recently have gone into effect, companies also have to disclose how much the stock holdings granted to their CEOs have contributed to their overall pay. So when you factor in those rules based on market changes, you get another list of the highest compensated executives. And wouldn't you know it, Elon Musk tops that list with a compensation actually paid or cap of$1.4 billion. Alex Karp of Palantir comes in second at$1.1 billion.

12:00Hawk Tan of Broadcom, Brian Armstrong of Coinbase, and Safra Katz from Oracle round out the top five. But Neil, U.S. Bosses' pay is increasing at its fastest rate ever in the last 14 years, punctuated by the$46 billion pay package. Tesla shareholders just reapproved for Elon Musk. CEO pay, it's getting a little out of control. It's getting out of control, but it's not just the headline number of it rising. It's also how it compares to how the median average worker, the median worker is doing in the United States. So, so far in 2024, the median CEO pay at S &P 500 companies has risen by 12 percent.

12:35When you compare that with the year on year increase of U.S. wage growth for the median worker, that's just 4 percent. So basically inequality is increasing because CEOs are tripling up. Their pay raises are tripling up that of the average worker. Right. And if you just look at what the average worker is making, how many times they would have to work or how many years you'd have to work in order to make their CEOs pay. Median CEO pay hit$16.3 million in 2023. That's nearly 200 times the typical workers wages, which is also an all time high. So you're right. You have to put it into context. These CEO packages are increasing much faster than their workers wages.

13:12And it's added all those ratios are at an all time high. Right. So what is going on here? Why is this happening? I mean, as recently as the 1970s, the ratio of CEO pay to worker pay was less than 20 to one. And now it's upwards of 300 to one. So we've seen an explosion in CEO pay. I mean, if you are a free market person, you're saying that, OK, look, this is just what CEOs demand now. This is a very specialized type of role where you are running a massive multinational global company with hundreds of thousands of employees. You are increasing your shareholder returns by billions, in Jensen Huang's case, trillions of dollars at NVIDIA.

13:55And they deserve this amount of money to not be able to go to another company because this is just what they're worth on the free market in this particular labor market. Then you have the criticism being like, no, this is a distorted market. These are, in economic terms, rent-seeking individuals. It's a rent-seeking market where the railroading boards who are just approving their shareholder packages, they're playing companies against each other, and they're getting far more than they're actually worth. What is interesting, though, despite that very valid criticism, shareholders tend to, on the whole, overwhelmingly support these pay packages for their CEOs.

14:29Only 1 % of S &P 500 pay votes have failed this year. So 99 % of these times are getting through. Companies typically receive just under 90 % of the vote for their compensation packages. So not only are they getting approved, they're getting approved overwhelmingly by shareholders. So something has to give here because you are right. It doesn't have to be that way. If you look back as close as the 70s, it wasn't this exorbitant ratio. So I do feel like potentially we're on a course now where we'll have a course correction, but potentially not either because— Elon Musk just got$46 billion. Right, he just got$46 billion.

15:06Up next, unlike Rory McIlroy, let's head to our winners of the weekend segment. That's cruel. Eczema isn't always obvious, but it's real. And so is the relief from EBCLIS. After an initial dosing phase, about 4 in 10 people taking EBCLIS achieved itch relief and clear or almost clear skin at 16 weeks. And most of those people maintained skin that's still more clear at one year with monthly dosing. EBCLIS, LibriKizumab, LBKZ, a 250 milligram per two milliliter injection, is a prescription medicine used to treat adults and children 12 years of age and older who weigh at least 88 pounds or 40 kilograms with moderate to severe eczema.

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16:15Tuesday on NBC, Jimmy Fallon and Bozema St. John hosts the highly anticipated new competition show. I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not play play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. Make the best idea win! On brand with Jimmy Fallon. Series premiere Tuesday on NBC. Let's see. Let's head to our winners of the weekend, the segment where Toby and I reveal two things that had an even better few days than Bryson DeChambeau.

16:55Toby, you won the pre-show Super Smash Brothers Melee, so you get to go first. I'm more of a brawl guy, but I took you down. My winner of the weekend is Inside Out 2. On Friday's show, some of you may have heard us talk about this movie and how after a series of disappointing results at the box office, Disney and Pixar really needed it to do well. Well, how does bringing in$155 million at the domestic box office good for the second highest opening for an animated film ever sound to you? It just dominated. Only Incredibles 2 stands ahead of it domestically when it comes to animated movies. And when you factor in its global haul of nearly$300 million, it comes in as the best opening for an animated film ever.

17:35Neil, I haven't seen it yet, and I've seen slightly mixed reviews. But clearly, nostalgia sells, sequels sell, and Inside Out 2 looks to be a juggernaut. Get ready for Inside Out 3, Inside Out 4, Inside Out 5, Outside In 6, whatever. Yeah, sequels are absolutely running rampant right now. The Bad Boys sequel, the fourth installment, was the winner of the box office the weekend before. Pixar decided that it wanted to do more sequels. Every other movie that it's going to produce right now is going to be a spinoff or a sequel of something that happened before. just existing IP can't get better than that when it comes to movies and this is also a big relief to movie theaters in general which are having a really big down year they're down 24 percent from the same time last year they hadn't had a hundred million dollar opening since Barbie which was 11 months ago now which is crazy but this was a huge relief for box off the box office and Pixar it was projected to bring in around 80 to 90 million and it brought in 155 million so it absolutely blew expectations out of the water i'm a little sad though because this is almost a pyrrhic victory in a sense because god now you're right the sequel strategy has been proven we're going to get spin-offs we're going to get never-ending replays of the same content hits we're going to see probably finding dory for finding nemo toy story 5 they're all coming down the pipeline right now so it makes me a little sad that this is the state of pixar and this is say the movies but i guess you'll take the wins where you can get them at this point apparently it's a good movie though.

19:05Yeah, it's fine. I have not seen it yet. Apparently the reviews I've been seeing is a little bit emotionally stunted. It's not as emotionally complex as the first one, but it's funny. It's smart. And I do think that we're going to see continual sequels because as Riley, the protagonist, ages, you get more emotions. You get different emotions in you. So I can see us going through her entire life cycle at this point. My winner is the investor Bill Gross, because he just made almost$20 million this weekend selling stamps. Gross is best known for co-founding Pacific Investment Management Company, or PIMCO, and has been called the bond king for slinging bonds.

19:44But in his downtime, he's a prominent stamp collector, and he's built the largest collection of U.S. stamps in history. On Friday and Saturday, he auctioned off over 100 of his stamps and earned more than$18 million from them. A single stamp from 1868 sold for$4.4 million, making it the most expensive stamp in history. Only two of these stamps are known to exist, one formerly owned by Gross, and the other is held at the New York Public Library. So why is he getting rid of his stamps right now? Gross has a very investor-like answer to this. He says the market is peaking since young kids aren't getting into the stamp collecting game, so he expects less demand for his rare stamps going forward.

20:24Toby, should we start getting into stamp collecting? Well, I guess not because Bill Gross is getting out of it right now. I do think that the backstory behind that record stamp of Benjamin Franklin that he sold is interesting. The previous record for a single U.S. stamp was set back in November, and that was$2 million for an inverted Jenny. And inverted Jennys are these very famous stamps known for their inverted image of an airplane upside down. and Bill Gross traded four inverted jennies in order to get one of these Z stamps, one of these Benjamin Franklin stamps. So I don't know if that's technically a good deal because he sold the Benjamin Franklin one for 4.4 million.

21:03The inverted jennie just sold for$2 million. So he got a little bit, I don't know, of a raw end of the deal there still. But it is interesting that you would think stamp collecting is such an emotional thing that you're tied to. But no, he's looking at it very rationally. He's saying the market's peaking. I'm selling it all right now. And he's making a pretty penny from it. Yeah. So the way he got into this was his mom started collecting stamps to eventually sell to put him through college. And he just said she bought the wrong stamps and said, no, I can do it better than my mom. And he said, if I can apply bond market economic terminology and philosophy to the stamp auction, then perhaps we can make some money as well.

21:42And that he did. That's so funny. Also, what is it called when you collect slams? Philatelist. Philatelitry. Philatelitry, that is a good trivia fact to bust out right there. If you were walking around New York City or scrolling on social media and saw a dragon wrapped around the Empire State Building, it wasn't your mushroom omelet hitting a little bit differently. You were just getting a taste of the all-out marketing push HBO has been running for the House of the Dragon, the Game of Thrones spinoff series that came back for a second season last night. To help build hype for the expensive project, HBO has been running a massive marketing campaign.

22:19At one point, everyone was convinced that House of the Dragon banners were hanging from the Brooklyn and Manhattan bridges. It turned out to be computer-generated images. But it was another clever example of how HBO is working to hype people back up to again descend into the bloody world of Westeros. In 2022, HBO dropped$100 million in media spend in its biggest ever marketing campaign to promote the first season. And it looks like it's running back the same playbook to build hype for season two. Although their marketing push is repping some people the wrong way. Yeah, in Mexico City, there is an old castle, a 19th century castle, where on the internet you could see through the social media campaign that there was a Targaryen flag flying from it.

23:03And the Mexican officials who were in charge of this castor got very angry and upset. And they said, look, we are this. This is not real. This is completely computer generated. Don't believe for a second that we're actually flying a Targaryen flag. And they actually threatened to sue and pursue legal action against HBO for this. It does feel like we're on the new vanguard of marketing where you're not exactly sure what's real. And this isn't even AI, of course. This is just traditional computer generated images. So we'll see what happens with future marketing campaigns. And other marketers are probably looking at what HBO is doing and saying, wow, look at all the buzz that's happening.

23:36You know, never mind the legal challenges. This reminds me of the Barbie marketing playbook because remember Barbie was doing a combination of real life activations. Remember the Barbie Malibu Dreamhouse that they painted pink and put on Airbnb? Also combine that there is all these computer generated augmented reality images of a giant Barbie stepping over a building in Dubai. and so it is interesting to see this combination of you do things like put a real dragon around the Empire State Building, but you also mix in some computer-generated stuff and it just gets a lot of people talking, which is a good thing because right now, HBO does need a little bit of a hit.

24:14It's staring down potentially its worst Emmy season. The network is expected to finish third in Emmy nominations, which would be its worst performance since 1996. It also, Max isn't really capturing that many people. It only has 1.2 % of TV use in the US. That's way behind Netflix's 7.6%. So it is looking for a hit right now. And I guess the way to get a hit is to just plaster dragons all over the place. House of the Dragon is really popular. I mean, people, you know, after Game of Thrones ended, everyone was like, wow, I am so done with Westeros. This is the worst thing I've ever seen, which is maybe true, but they really did a good job of resurrecting this world House of the Dragon, the season one finale was the most watched finale for HBO since Game of Thrones ended.

24:58So I think a lot of people watch this and it depends on how the season does. But we'll just I'm just waiting for White Lotus to come back. Finally, it is Monday, as if you need a reminder. So here is what you need to know for the week ahead. First things first, you're probably going to want to bring a change of clothes to work. A heat dome is about to roast a large portion of the United States, starting with us here in the Northeast and then making its way to the Midwest and the Great Lakes Temperatures could near 100 degrees as north as Maine, while Detroit is expecting its worst heat wave in at least 20 years.