The 10 Drugs Getting Medicare Price Cuts & Bitcoin's Big Win Over the SEC

0:28Stop waiting for customers to fall into your funnel. Dash ads. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. On today's pod, Biden dropped his list of drugs that will be subject to negotiation by Medicare, and Big Pharma is big mad about it. Then we'll tell you about a high school football game in Ohio that caught the entire country's attention. Then Bitcoin is showing signs of life again after a crucial court ruling paved the way for it to scooch into the traditional finance world. Plus, the real Slim Shady is real fed up with a certain candidate rapping his songs on the campaign trail.

1:03It's Wednesday, August 30th. Let's ride.

1:10Alright, Neil, to start off the show today, we have an update on the live in-person screening of Dumb Money we're hosting. As a quick reminder, last week on the show, we put a call out to any local MBD listeners to come watch an exclusive preview of Dumb Money with us on Monday, September 11th. It's the movie chronicling the craziness of the GameStop saga, starring the likes of Pete Davidson, Seth Rogen, and Paul Dano. It looks incredible. We got tons of emails from you guys expressing interest in coming to hang with us, which was awesome to see. If you did email us, please make sure to check your inbox later today because we're sending out a link for you to confirm your tickets.

1:49And if you're still interested, we still got space. So send us an email. Neil, I'm so excited for this movie, but I'm also just really excited to meet people in person for the first time. I can't wait. I can't wait. And just to reiterate, we want you to be in person in New York City. Make sure you can actually come to this. Definitely check your email later today. and if this is the first time you're hearing about it, also send us a fresh email, morningbrewdailyatmorningbrew.com. I actually memorized it this time. I know our email address. It's a lot of words. But I will also say the email again at the end of the show in case you forget that.

2:23So if this is the first time you're hearing about this movie screening with us, definitely send us an email and at some point today, we will send you the link. We got a busy morning, but hopefully we'll get it to you by the afternoon. Yep, I'm pumped for this. We are real people, people. That's the big takeaway for me. Did anyone, I mean, why wouldn't they think that? People, I don't know. Were AI? With AI generation, yeah, you never know these days. Kobe bought 3 ,000. All right, let's begin in the world of pharmaceuticals, where unlike Elon Musk, President Biden followed through on a cage match he promised to participate in.

2:54And that is his battle with the pharma industry to lower prescription drug prices for Americans. Yesterday, Biden dropped his highly anticipated list of the first 10 prescription drugs that will be subject to negotiations with Medicare the government's health program covering 65 million Americans. These drugs include major bestsellers that cost tens of thousands of dollars per year, like the blood thinner Eliquis from Bristol-Myers Scribman Pfizer and the diabetes pill Jardians from Eli Lilly. Maybe they should start by making these easier to pronounce. Anyway, this is a historic move and one of the most aggressive actions ever taken against the pharma industry.

3:31Until now, Medicare has not been able to negotiate drug prices directly with pharma companies, But that changed last year due to a measure in the Inflation Reduction Act, one of the few initiatives in the bill that actually aims to reduce inflation. The goal here is that by empowering Medicare, which is the largest buyer of health care in the country, to sit down at the table with pharma companies, it'll save billions of dollars for both the government and consumers. But this is far from a done deal because big pharma companies are seething over this plan and are making a lot of lawyers rich to stop it from happening.

4:03Yeah, obviously they are not thrilled about this. Last year, the industry as a whole spent$400 million in lobbying fees to try to stop the IRA, the Inflation Reduction Act, from passing. But it did pass. But here's the thing that I feel like the government may have seen coming is that now drug makers are already starting to increase the prices of new drugs that they release in order to offset these negotiations that are going to happen. And so it's always the second order effects of these things where even with the best intentions and this had the best intentions, it had like pretty universal support when it comes to Congress.

4:41Both Republicans and Democrats were on board with this because who's against lowering drug prices? Well, I think like I think Republican voters were on board. I don't think Republican politicians were on board because the IRA passed without any Republican support. But this is a very popular people hate paying high drug prices. And the U.S. pays double that of its peer nations in terms of prescription drugs. So this is a thing that voters will get on board with. And you're going to hear a lot on the campaign trail. I think they really wanted to get this initiative out before Biden starts campaigning.

5:15And you're going to hear it up and down the ticket. Republicans do say that this is they agree with pharma companies that this is government overreach. And they're like, you are what this amounts to is way too much meddling in the free market. and what you're doing is price setting, you're not allowing, this isn't like a fair negotiation because Medicare is the largest buyer of healthcare. They have so much bargaining power. Yeah, that was the main argument that these drug companies were saying is that you're squashing innovation. Like we use these profits to innovate and discover new drugs, which I mean, while that is true to a certain extent, like they've been raking in record high profits for years now.

5:54So it's not totally, it's not completely squashing the only innovation and an engine that they have. But the government really thinks this will work. They expect prices to be slashed by half on average. Who knows if that actually, these are all projections at this point because these cuts come into effect in 2026. But generally the idea of negotiating drug prices to lower is definitely like this movement we're seeing, especially with Mark Cuban's cost plus drugs. This is definitely, finally we're reckoning with this moment in America when for so long drug prices have been so high. Yeah, but I would say expect this to be played out in courts, and I would expect it to make its way to the Supreme Court before these go into effect in 2026.

6:37The interesting argument here is that the drug companies are pursuing is that the government is violating the Fifth Amendment, which bans the seizure of private property for public use without, quote unquote, just compensation. So they're saying that this thing is unconstitutional under the Fifth Amendment. Interesting. A little constitutional law right here. Thank you for that, Neil. Okay, let's move on. Neil, I can count on pretty much one hand the amount of times we've talked about the crypto industry since we started this show. That's because outside of celebrities getting sued, it's been a while since there was anything to talk about.

7:14But that changed yesterday after a federal appeals court ruled that the SEC must reconsider its ruling on a popular Bitcoin trust. Now, the Grayscale Bitcoin trust was supposed to be a game changer for crypto. giving less crypto-savvy investors easy access to the space via an ETF that more or less tracked the price of Bitcoin. But the problem is that the ETF wasn't an ETF at all in the eyes of the SEC. It denied investment firm Grayscale the permission to convert that trust into an ETF, and things have been hanging in limbo ever since, until the ruling yesterday. Now, the ruling didn't explicitly give Grayscale permission to make the switch into an ETF, but it did at least tell the SEC that it was wrong to deny it in the first place.

7:58Even still, pretty much anything related to the crypto space from Bitcoin to Coinbase's stock spiked yesterday in reaction to the news. Neil, could this bring crypto back to life a little bit? I don't know. This reminded me of a basketball team that is down 20, right? You're at home, but you're down 20. Everyone's kind of down. And then you go on this 15-0 run and the other team calls a timeout and everyone's hype. And because you're still losing, you're still losing. OK, you're still losing. But there is some life in you. There is some hope because over the past few years, we've seen SEC chair Gary Gensler wage this war on crypto.

8:35There have been so many lawsuits, so much action, so many crackdowns, so many exchanges going belly up. And the crypto industry was like, this guy is trying to run us out of town. He doesn't want a crypto industry in the U.S. And then finally, they get this big win that gives them a little hope. And so I think they want to use this and say, look, the SEC can crack down all it wants, but the courts will finally decide. And the SEC needs to provide some sort of justification for why they want to squash this out of existence. So expect other crypto industry companies and individuals to kind of take action and learn from this experience that like you can go after the SEC and maybe win some cases.

9:19Yeah. And so just to paint a broad picture here, like why do people want a Bitcoin ETF so badly? Because a lot of people say like, well, I can just go buy Bitcoin. But for others, people want exposure to Bitcoin, but they want kind of the added protections you get from an ETF wrapper. So you don't have to deal with crypto exchanges. You don't have to deal with actually owning Bitcoin yourself. You simply buy a fund that holds, quote unquote, shares of Bitcoin instead of, for instance, like Apple or Google. Like that's the same. It's the same principle. And so people just want to enter it via the traditional finance system with a couple added protection layers.

9:56That's why this is so bullish. And honestly, financial institutions are lining up to create these Bitcoin ETFs. You got Fidelity, BlackRock, WisdomTree, VanEck, Investco and others all have put in filings with the SEC to have a Bitcoin ETF. So you can see why this could create a domino effect. If Grayscale gets them through, then suddenly there's tons of Bitcoin ETFs out there. And like when BlackRock filed for a Bitcoin ETF in June, that was like the last time Bitcoin had a big spike because people were like, well, BlackRock's obviously huge. Yeah, these are like the biggest ETF companies in the world.

10:28It's so interesting to me like how, I guess for on the company side, they know that this can attract like a bunch of new inflows. It's a very buzzy thing. So I can see why they are pushing for it. But it is interesting to see the who's who's of traditional finance trying to get in on the Bitcoin ETF game. And before we go, we should just clarify that there exists Bitcoin futures ETFs, but this would be a Bitcoin spot ETF, which tracks the real time price of Bitcoin, whereas the other ones in existence track Bitcoin futures. and the SEC did not think, thought that a spot Bitcoin ETF, I know this is a lot of jargon, but an ETF that tracks the current price of Bitcoin would open up individual investors to a lot more risk, but they lost that case.

11:14All right, let's move on. All the two L's listening to this are about to get goosebumps because I want to talk about the largest single mass tour in US history. It comes courtesy of 3M, the manufacturing giant out of Minnesota Soda that makes everything from post-it notes to scotch tape to dental products to, crucially, earplugs. Yesterday, 3M agreed to a$6 billion settlement with about 260 ,000 plaintiffs to resolve claims that its earplugs it sold to members of the U.S. military were defective, causing hearing damage. It's the conclusion of a long process that saw 3M try and fail in a ploy to send a subsidiary into bankruptcy saddled with all of these liabilities.

11:54And you're probably thinking that 3M execs might finally get a good night's rest, having settled up 260 ,000 lawsuits. But no, lots of legal headaches remain on the horizon. 3M previously reached a$12.5 billion settlement over claims that it's forever chemicals it used to make firefighting foam, contaminated drinking water in U.S. cities. And lawyers say that these forever chemical lawsuits are just getting started. Toby, this litigation over a product's health risks is breathtaking in its scale, only rivaled by other huge agreements in the past reached by companies that make cigarettes and opioids.

12:29Yeah, I mean, this is actually the single largest mass tort in U.S. history. And just to define what a mass tort is, it's a case where many people are wrongfully harmed in a similar way by a similar product. And so it's a large class action lawsuit. And yeah, so 3M tried the old Texas Two-Step, as it's called, to try to wriggle its way out of this. That's when you basically take a solvent company. In this case, it was Arrow, which is a subsidiary of 3M. And you create a new subsidiary. You transfer all the liabilities into it and then declare that company bankrupt. It allows the company to kind of manage the liabilities without using the assets of the original company.

13:08A lot of people have tried this. Actually, some people successfully did it. Georgia Pacific pulled it off successfully for an asbestos lawsuit where they won the court's approval to pause asbestos lawsuits against it and instead saddled this other company with liability. So we've seen it pulled off before. In this case, though, the courts were like, no, no, no, you can't get away with it. There's been a couple recently. So 3M wasn't allowed to do this. And then Johnson & Johnson over its baby powder lawsuits definitely tried this Texas two-step. I love that name. It feels like a dance move. It sounds like a dance move, but it's actually a bankruptcy maneuver for a healthy company.

13:48So the courts have ruled against Johnson & Johnson and now three, I'm now two. So the strategy is maybe on its last legs. And I know a lot of lawmakers are trying to make sure that companies can't do this because they should face up their liabilities that they get with their actual company. Yeah. I mean, this is just so big, like just I mean, not just for earplugs, But like when you see earplugs in the six billion lawsuit, it is truly huge. But that's just how far spreading and far reaching that this lawsuit actually was. All right, Neil, before we jump into our next story, we're going to take a quick break.

14:24This episode is brought to you by State Farm. Listening to this podcast, smart move. Being financially savvy, smart move. Another smart move, having State Farm help you create a competitive price when you choose to bundle home and auto. bundling just another way to save with the personal price plan like a good neighbor state farm is there prices are based on rating plans that vary by state coverage options are selected by the customer availability amount of discounts and savings and eligibility vary by state this episode is brought to you by indeed you're ready to move your business forward but first you need to find the right team start your search with indeed sponsored jobs it can help you reach qualified candidates fast, ensuring your listing is the first one they see.

15:09According to Indeed data, sponsored jobs are 90 % more likely to report a hire than non-sponsored jobs. See the results for yourself. Get a$75 sponsored job credit at indeed.com slash podcast. Terms and conditions apply.

15:26Now, Neil, I'm not much of a singer like you, but one thing is for certain, I've never sung so badly that someone filed a cease and desist against me. But fringe GOP candidate Vivek Rameshwamy can't say the same after Eminem hit him with a C and D for incessantly rapping the song, Lose Yourself, whenever someone puts a mic in his hand on the campaign trail. Now, a video went viral recently of Rameshwamy belting out the song at the Iowa State Fair, and apparently that was the last straw for Slim Shady. Now, politicians technically don't need direct permission from artists to use their work. Their campaigns can buy licensing packages from organizations that give them legal access to a catalog of more than 20 million songs.

16:12But many artists, including the real Slim Shady, have gone on to pull their catalogs from those music rights organizations after they've seen them used by politicians whose views they don't necessarily agree with. And Neil, believe me, there are quite a few instances of this actually happening. Yeah, so I will run through them. The first one I can think of, and Toby, I know you're not expecting this, but in the early 1800s, Beethoven wrote a symphony, his third symphony for Napoleon, because he loved Napoleon. And he wrote this symphony for him called Eroica. And I played the symphony, it's a really good one.

16:49And when Napoleon turned out to be maybe not the democratic leader that he's posed, Beethoven was so pissed and he scribbled out Napoleon's name on the symphony and and was like, I hate this guy. He does not stand for anything. I don't want him playing my music. I don't want anything affiliated with him. So to me, that might be the first instance of a musician kind of breaking off ties with with a politician and did not did not want them playing this music. Let's fast forward a few hundred years to something that may be a little more relevant to people. in the United States. Bruce Springsteen did not want Ronald Reagan playing Born in the USA in his 1984 election campaign.

17:27That may be the first instance in modern history where we saw a singer say you can't use it. Then there's a funny one, McCain, John McCain in 2008 and ABBA, this is a, I mean, I would use this song. This is a great song, Take a Chance on Me. McCain wanted to use that for, he used it a couple of times for his rallies And ABBA said, no, thank you. We are please do not do that. And so McCain was like, yeah, it gets expensive in a big hurry. And if you're not careful, you can alienate some Swedes. We have Dr. Dre telling a Marjorie Taylor Greene not to use his music. And also a lot of these examples are kind of musicians not wanting Republicans to use their their music.

18:08And that's maybe because musicians are maybe more liberal. but there was one instance of this R &B singer Sam Moore telling Obama to knock it out with one of his songs. Yeah, I mean you can really go throughout history and anytime any candidate has used any music, usually someone can chafe or have a little bit of pushback on that. It is crazy to see just go through. Obviously like Donald Trump is facing at least 16 musical acts and their heirs have ranging from the Beatles to Rihanna have said basically don't use our songs anymore. I also think that this is funny that it's all kind of backfired in Vivek Ramaswamy's face because his whole point of his campaign is basically like, I'm younger, I'm hip, I'm cool.

18:52Like, look at me, I rap Eminem. And everyone just kind of universally derided his performance of it and basically said it came off as cringy and trying too hard. And then now he has Eminem, who he's publicly said he loves, like, that's my anthem. in literally he called it his uh his life's theme song back when he was at harvard in 2006 now he's got his hero saying dude cut it out like i don't want to be associated with you it might be good for him if he doesn't stop stopping honestly he's a blessing in disguise but to me the most interesting part about this entire story is i didn't know that these performing rights organizations like bmi global music rights and ascap exists and they uh they negotiate directly with event venues and stuff so when you know a basketball team plays like rock and roll part two or something they don't always have to negotiate directly with artists themselves and these groups hand the event venues a library of millions of songs that they can use and the artists don't need to give their permission there's a separate library of 20 million songs for for politicians and it seems like there's not really uh it seems like there's a legal gray area here where musicians can ask their songs to be removed from this politics list.

20:03But it seems like the most effective thing you can do is what Eminem did and what all of these other artists do and just like publicly shame politicians and they'll usually back off. You only have to threaten a lawsuit because it's not clear whether this lawsuit will have any legal grounds. But all you have to do is like get up on your, you know, you're extremely popular. You say, I don't want you using my music and you tell all your fans and typically the musician or the politician just backs off. What do you think your politician walkout song would be? Yeah, I was going to ask you. Okay. So if I was a politician, I was running for president, my rally song would be Never Gonna Give You Up by Rick Astley.

20:41Because first of all, it's an upbeat song with a good message. And it signals to voters that I will never Rick Roll you into making a promise I can't keep. I feel like you're Rick Rolling voters though, right? By using the song every time. I'm not promising anything different. Okay. What about you? I would do Cotton Eye Joe. It's a little different because I swear the only thing people want to do when they're at these rallies is just have a good time and dance a little bit and just like get fired up. And Cotton Eye Joe gets the people going. If you hit the Cotton Eye Joe 2 on stage with that like high kicking maneuver, that would go viral for sure.

21:14So Cotton Eye Joe, baby. Cotton Eye Joe is hit or miss because if you don't dance, listening to it sucks. So it's literally all or nothing. All right. Let's move on. Toby, there was an electric high school football game in Ohio a few weeks ago. And I desperately want to tell you what happened, but I cannot do it justice. I'm going to read a few excerpts from the write-up in the Columbus Dispatch newspaper so you can get a sense of really feeling like you were there, okay? I'm reading the article now. The Westerville North Warriors defeated the Westerville Central Warhawks 21-12 in an Ohio high school football game on Friday.

21:47Westerville North edged Westerville Central 21-12 in a close encounter of the athletic kind at Westerville North High on August 18th in Ohio football action. Skipping a few paragraphs to the end. Westerville North jumped to a 21-6 lead heading into the final quarter. The Warriors chalked up this decision in spite of the Warhawks' spirited fourth quarter performance. Okay, on second thought, that made absolutely no sense. And the reason is that it was written by artificial intelligence as part of a project by the paper's owner, Gannett, to have AI write local sports recaps. This hilariously bad article and others like it from other newspapers around the country went viral on social media this week.

22:27And after everyone roasted them to a crisp, Gannett decided to pause its AI sports writing tool because it's clearly not ready for primetime. To me, this embarrassing episode shows how media companies are still figuring out how to integrate generative AI tools into their reporting process without losing trust from readers. These high school sports write-ups show that it can go bad in a hurry. These were hilarious. I mean, you read a little bit of it, but you have to read like the full story and just how bad. Close Encounters of the Athletic Kind is almost so bad it's funny. But the fact that AI thought like, oh, I'm throwing some spice into this, Close Encounters of the Athletic Kind.

23:04It also just makes me a little sad for kind of the future of reporting because a lot of reporters were kind of chiming in and saying, yes, this is funny. But it's also this is where young reporters cut their teeth. This is how you hone your craft. And I actually distinctly remember Stephen King has this book called On Writing, which is like a very famous book about the craft of writing. And he said literally, like, I wouldn't be who I am today without learning how to write badly in these seemingly insignificant sports write-ups. But like they have a big long-term impact of kind of seeding the industry with talented writers.

23:38So I think that it truly – it did make me sad deep down. Like we're losing a part of like the industry that is where a lot of people get their starts. Yeah, I know. I remember when I played tennis in high school and I became kind of friendly with the local newspaper reporter who would always write about our matches. And it was it was kind of exciting. But I this is a writing like local high school sports recaps and and sort of quick hitting articles like this. Really short articles that kind of just present the facts is nothing new. Like in 2016, The Washington Post started to write AI articles about the Rio Olympics results, local football games, election updates.

24:15So this dates back years. And then now they say Bloomberg's, a third of all Bloomberg's articles are AI generated. So things like earnings reports and really quick hits are gonna be AI generated. And I'm sure there's nothing we, and I just don't think there's anything we can do about it because people are expensive and a bot can churn out an article about Microsoft's earnings super quickly. I think the case with this Gannett thing is that it was just really bad AI. Like I don't think they used open AI's tools. They used a startup called Lead AI. And frankly, just the program was crappy. But I think maybe if they used more advanced tools that have come out recently, then it wouldn't be so bad because AI articles are flooding the web right now.

25:00Yeah, they're not going anywhere. I mean, there is, and experts have estimated that AI-generated content could account for as much as 90 % of information on the internet in a few years' time, which to me sounds like a hellscape of certain sorts. But there's just, we're going down this rabbit hole, and this is like the way the world's going. Yeah. Sorry. Unfortunately, Neil, we got to move on here to our final story of the day. And I know many of our listeners have probably understood this feeling of swiping right on someone on a dating app only to meet in person and have them look nothing like their picture.