Uncle Sam unveiled the fruits of its monthslong haggling sesh with Big Pharma in the form of lower prescription drug prices.

The Biden administration announced yesterday that Medicare used its newfound power to negotiate with drugmakers to win landmark discounts for 10 widely prescribed drugs to treat ailments like heart disease, cancer, and diabetes. The Inflation Reduction Act, signed into law two years ago, allows the federal health insurance program to directly bargain with pharma companies for the first time.

Permanent happy hour

The new pricing will go into effect in 2026, with the costs of some drugs slashed by as much as 79% from 2023 prices, albeit without taking into account existing rebates and discounts.

For example, a 30-day supply of…

• Arthritis drug Enbrel will go for $2,355 instead of $7,106.
• Blood thinner Eliquis, produced by Bristol Myers Squibb and Pfizer, is getting discounted to $231 from $521.

Officials said that if the new price tags had been in place last year, $6 billion would have been saved. Patients’ out-of-pocket spending would’ve been $1.5 billion lower, since they’re often charged a percentage of the total. However, some of the drugs might have become cheaper in the coming years due to expiring patents.

Pharma sighs

While patient advocacy groups cheered the announcement, and Joe Biden held an official event with Kamala Harris to tout it as a win, the discount-givers aren’t celebrating:

• Novartis and Johnson & Johnson claimed that negotiated price reductions will harm patient access to medicines.
• Meanwhile, the industry lobbying group Pharmaceutical Research and Manufacturers of America warned that Medicare flexing its pricing muscles diminishes incentives for new drug discovery.

Though drugmakers expect limited financial impacts from the new drug prices, experts say the industry is likely more worried about upcoming negotiations.

Looking ahead: By February, Medicare plans to announce 15 additional drugs it wants discounted. The nonpartisan Congressional Budget Office projects price concessions from Big Pharma will save the government $100 billion by 2031.—SK

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Walmart’s smash quarter headlined a retail resurgence. The recession that Bloomberg Economics projected with 100% certainty faded further from imagination yesterday when the Commerce Department revealed that retail sales were up 1% last month—much better than expected. One of the main beneficiaries of US consumer spending was Walmart, which said sales increased by 4.2% last quarter, operating income jumped by 8.5%, and digital sales rocketed up 22%. The retailer also raised its outlook for the rest of the year as shoppers power through their weariness about inflation.

Five people were charged in Matthew Perry’s death. Prosecutors said the Friends star’s assistant, two doctors, and a drug dealer were among those arrested for his death from a ketamine overdose last year, the Associated Press reported. “These defendants took advantage of Mr. Perry’s addiction issues to enrich themselves,” US Attorney Martin Estrada said. Two of the five were arrested yesterday: Dr. Salvador Plasencia, who is charged with distribution of ketamine and falsifying records, and Jasveen Sangha, a drug dealer nicknamed “the ketamine queen” who supplied the drugs that led to Perry’s death.

Harris proposes federal ban on price gouging for food and groceries. In the first major economic policy speech of her presidential candidacy, Vice President Kamala Harris is expected to announce the first-ever proposal to outlaw corporate “price-gouging,” part of a broader agenda to cut costs for consumers. Under the plan, the White House would direct the Federal Trade Commission to punish companies deemed to have unfairly jacked up prices. Republicans criticized the proposal, arguing it’s government overreach that would hurt the corporate sector.

Elon Musk’s attempt to make Grok, X’s AI companion, an “anti-woke chatbot” is coming through loud and clear after the social media platform rolled out some image generation capabilities this week.

Premium and Premium Plus X users were able to quickly conjure up unhinged images of real people and copyright characters, like Bill Gates snorting cocaine and Pikachu holding a machine gun.

• Grok also created sexual images of stars like Taylor Swift, who had previously been targeted with deepfakes. Through a loophole, one X user created violent photos of children being gunned down by Mickey Mouse and Elon Musk.
• The chatbot has stopped short of generating fully nude images.

Thus far, Grok, which has already been in hot water for misinformation, appears willing to generate photos that competitors like OpenAI and Gemini have tried to block. After being widely roasted for a lack of guardrails, AI companies have scrambled to tweak their image generators fast enough to prevent some Reddit user from making more celeb deepfakes.

Behind Grok’s questionable art: The new feature is powered by Black Forest Labs, a Germany-based startup that just raised $31 million from investors like Andreessen Horowitz. The startup has plans to create a text-to-video model soon.—MM

Remember when humans did that? Working a kitchen deep fryer is tough. So much so that fast-food operators grapple with 150% or more turnover. Miso has the solution. Their AI-powered robot, Flippy, has deep fryers mastered, boosting profits by up to 4x. And now, Miso is commercializing their most advanced robot ever across 100k+ potential US fast-food locations. See why 35k people have already joined them—check out Miso’s investment offering today.

This is what retirement looks like for former Microsoft CEO Steve Ballmer, the eighth-richest person in the world: buying the Los Angeles Clippers and then building them the Intuit Dome, a spaceship of a stadium that opened yesterday in Inglewood after a decade of construction.

The 18,000-seat arena, which will host the 2028 Olympic basketball games, sports some serious tech:

• The jewel in its crown, the Halo Board, cost nearly $100 million. It’s a double-sided, 44,000-square-foot wraparound screen that hangs high above the court so fans in any seat can watch clear gameplay.
• There are 20 cashierless food spots with checkout via tap-to-pay or facial scan.
• Being the least demure fan in the house will be rewarded: Each cushioned seat has decibel meters that detect fan rowdiness, with the loudest receiving discounts on snacks and merchandise via the Clippers app. (Each seat also has a phone charger.)

Ballmer balled out. As Microsoft’s largest individual shareholder, Ballmer chose to finance this project himself (rare). He spared no expense on the fan experience: The seats boast the most legroom of any NBA stadium, high-altitude t-shirt cannons democratize merch opportunities for people in the nosebleeds, and the entire section behind one basket is reserved for Clippers diehards.—ML

Not since Gob Bluth has anyone had such a good living in Newport Beach, CA. Incoming Starbucks CEO Brian Niccol’s pay package is reportedly worth a preposterous $113 million, broken down as follows:

• $75 million in stock grants
• $28 million in annual pay
• $10 million bonus

Best of all, Niccol gets to run Starbucks from home in sunny California, only traveling to the company HQ in Seattle as needed. The pay and the perks are mere drops in the bucket for the coffee giant, which added over $21 billion in market cap after news broke this week that Niccol—dubbed “the LeBron James of the restaurant industry”—was joining Sbux from Chipotle.

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