Brexit Negotiations Are Not Going Well; Wells Fargo CEO Faces Congress; UnitedHealth Is Changing The Rx Game
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If Brexit were an 80’s action film, this is the part where the bad guy is about to kill the President’s daughter … except, in this case, there’s a pretty good chance Jean-Claude Van Damme, Arnold Schwarzenegger, or Steven Seagal doesn’t crash in through a plate glass window to save the day.
The UK is more f*cked than Aunt Becky. With the March 29th deadline mere weeks away, UK’s Parliament rejected another Brexit deal by 149 votes yesterday. For what it’s worth, the defeat is less catastrophic than May’s historically lop-sided first defeat in January, but the latest loss all but guarantees one of two outcomes …
- A no-deal vote will occur on Wednesday. Under the scenario, the UK will exit the EU with no real rules in place and will default to WTO trade protocol. Experts don’t expect Parliament to support this option either, but if nothing can be agreed upon, it may not have a choice.
- The more likely outcome is a vote to delay Brexit that will occur on Thursday. The problem with this? The UK will have to explain to the EU what it plans to do with the extra time. And it isn’t exactly building its case with government gridlock …
The blokes on the other side of the pond can’t seem to make a decision on the Irish backstop. What sounds like a protective net at a Guinness-sponsored beer-league softball game in Dublin is much less exciting.
You see, Northern Ireland is technically part of the UK. And Ireland is well, Ireland. Ireland and Northern Ireland share an island (see: Ireland) and have more or less not had a “border” since 1998. But with Brexit, hardliners want to see a trade border setup. Should the border be left open the UK will technically still be subject to EU trade rules. And many an MP is saying “fook” that.
WE’RE NOT MAD, WE’RE DISAPPOINTED
Wells, Wells, Wells, look who’s in the news again. If you think you had yourself a subpar Tuesday, just be glad you’re not Wells Fargo’s CEO Tim Sloan.
Sloan’s testimony to Congress went about as well as you’d expect it would have for the embroiled leader of the financial institution formerly known as Wachovia.
During four long hours of testimony, Timmy Scandals received sharp criticism for f*ck ups including, but not limited to, Wells’ account opening misconduct and was even warned that Wells might need to be broken up as it may be too large to manage. In addition to expected questions about his competency as a leader, Sloan was also pressed about gun control and private prisons.
Soon after the hearing concluded the Office of the Comptroller of the Currency reiterated how disappointed it was that Wells was unable to execute effective corporate governance. After little Timmy got out of timeout on Capitol Hill, the OCC, who already put an unprecedented cap on Wells’ growth, hinted that it is contemplating forcing out top execs and directors.
Misery loves company
Two former Goldman Sachs bankers that were allegedly involved in the 1MBD Malaysian fund scandal were banned from working in the banking industry by The Federal Reserve of Governers. Does this mean they have to remove “deal closing at all costs” from their LinkedIn endorsements?
Tim Leissner, who pleaded guilty last year to charges money laundering and violating anti-bribery laws was fined $1.42M for his actions. Malaysian citizen Roger Ng, who was indicted last November for three counts of violating anti-bribery laws and money laundering, pleaded not guilty but suffered the same professional fate.
UnitedHealth made a groundbreaking announcement yesterday: new employer clients will be required to pass drug manufacturer rebates to the people who actually take the medication. The change will take place for any new employers enrolling employees in OptumRX, beginning in 2020. Ultimately, the goal is to get money back to consumers to reduce out-of-pocket costs.
What’s the big deal?
You mean other than the fact that this is an absolute game changer?
This could potentially change how money flows through the entire pharmaceutical ecosystem, or at least whose pocket it ends up in. The whole set up can be confusing if you don’t have a Ph.D, or even if you do. This diagram breaks down the clusterf*ck pretty well.
Most drugs have rebates that manufacturers will offer to incentivize buyers. These rebates make their way to PBMs who share the kickback with health insurers. The final step is sending that money back to employers who then lock it in a vault and dive into it like a filthy rich anthropomorphic duck … until now.
Are things really changing?
They’re starting to. Just last month, big pharma CEO’s were ripped by the Senate for continually hiking drug prices.
It’s surprising to see UnitedHealth doing something in the interest of the general public rather than corporate profits but it seems like healthcare players are reading the writing on the wall that it’s likely only a matter of time until Uncle Sam intervenes with ballooning healthcare costs.
According to reports, 58% of employers are either currently passing rebates to enrolled participants or plan to by 2021. So we’ve got that going for us.
IN OTHER NEWS
- This just in: children with wealthy parents are more privileged than peasant offspring. More than 40 people have been charged in a $25M scandal that accuses those involved of bribing officials at some of the most prestigious universities in the US, including Yale and Stanford. Aunt Becky, of ‘Full House’ fame, and former Pimco CEO, Douglas Hodge, among others, bribed SAT/ACT officials or in some cases, university coaches to help their presumably useless offspring gain acceptance.
- The FAA maintained that the Boeing 737 MAX is “airworthy” yesterday. For what it’s worth, the SEC deemed Stephen Cohen “trustworthy” in allowing him to manage outside money again. But I digress. Nations and jurisdictions around the world continue to join the 737 MAX do-not-fly list. Most recently the 737 MAX was grounded in Europe until further notice. Shares of Boeing continue to take a beating, falling more than 6% yesterday.
- Cambia Health Solutions and Blue Cross and Blue Shield of North Carolina have agreed to enter into a “strategic affiliation” which is the M&A equivalent of f*ck buddies. All the perks, none of the baggage of a traditional merger. Cambia a west coast Blue Cross Blue Shield insurer will join up with BCBS of NC to form a coast-to-coast player with a combined 6M customers and $16B in revenue. If this isn’t a knee-jerk reaction to industry consolidation (we see you Aetna and CVS), I’m not sure what is.
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