Drugmakers Accused of Multibillion-Dollar Fraud

By Yuval Rosenberg

Joe Biden's Secretive Economic Brain Trust

Joe Biden’s economic brain trust is shrouded in secrecy, write Jim
Tankersley and Thomas Kaplan at The New York Times:
"Some broad contours have become clear. Mr. Biden plays down
concerns about the deficit during this recession, aides say, and he
has begun soliciting ambitious plans to bridge the gap in earnings
and wealth between black and white Americans. His regular briefings
are by a small group of liberal economists and others with roots in
the Obama White House and Hillary Clinton’s 2016 campaign. And he
sees the economic recovery as his foremost duty if he wins the
presidency."
"Yet the details of the policymaking process are closely held.
Mr. Biden is now seeking input from more than 100 left-leaning
economists and other researchers, but there is little clarity on
who has true influence. The Biden campaign recently formed an
economic policy committee, which includes these outside experts,
and imposed strict rules to ensure their public silence. A
three-page document, sent last month ahead of the committee’s first
online meeting, warned participants not to circulate email from
committee leaders or refer to ‘the candidate or to the campaign’ in
documents."

Campaign officials refused requests from the Times for details
about Biden’s roster of economic advisers, but they confirmed that
the presumptive Democratic presidential nominee gets regular
briefings from at least three establishment liberal economists:
Jared Bernstein, Ben Harris and Heather Boushey.

Why it matters: Biden’s campaign has said that, faced
with a pandemic-driven recession, he is casting a wide net for bold
ideas that can spur growth and address the persistent economic
challenges facing the nation. In doing so, the former vice
president, seen as a moderate, also faces pressure to veer left
and, as the Times puts it, "embrace a bolder agenda of taxing the
rich and spending heavily on social programs."

The secrecy surrounding his advisers also may raise some ethical
questions. "It is unethical to formally advise a candidate and
publicly advocate the candidate’s views while concealing that
relationship," Kevin Hassett, an economic adviser to President
Trump who worked on other GOP presidential campaigns, told the
Times.


Read the full story at The New York Times.

Small Business Aid Program Still Has $130 Billion

The federal program designed to keep small businesses afloat during
the coronavirus pandemic still has billions of dollars available to
lend, and officials think a good chunk of the money could go
unclaimed.

Congress has made about $660 billion available to small
businesses for loans and grants through the Paycheck Protection
Program. The first round of funding of $349 billion was snapped up
quickly, with the program running out of money in less than two
weeks. But the second round of $310 billion has been claimed far
more slowly, and as of Tuesday there was still more than $130
billion left in the PPP fund.

Worries about the rules: Designed to help small
businesses keep their employees on the payroll, the PPP was rushed
out the door by lawmakers as the economy imploded in March, and
participants have complained about what they see as overly
restrictive rules, as well as uncertainty about who will qualify to
have their loans converted into grants. Those issues, along with a
public outcry over publicly traded companies benefiting from the
program in the first few weeks, pushed some borrowers to return
their money.

Treasury Secretary Steven Mnuchin told a Senate panel Wednesday
that roughly $12 billion had been returned. On some days last
month, more money was returned to the program than was lent out,
The New York Times
reported. The returns leave the total of approved
loans at about $511 billion.

New rules could help: Congress passed a law that eases
some of the regulations in the PPP, including an extension of the
time period for using the loans to 24 weeks, up from the original
eight weeks. Borrowers also now have more flexibility on how to use
the borrowed money, with more spending on overhead rather than
labor costs, and still qualify to have their loans forgiven.
Mnuchin said he expects the relaxed rules to help bring more small
business owners into the program and accelerate the distribution of
the loans.

But it may be too late: Many small
business owners have already decided that the program — which has
provided loans to more than 4.5 million companies — is too much of
a risk, possibly saddling them with loans that would need to be
repaid even if business conditions remain depressed. Given the
chaotic rollout of the program, and the instability of its rules
and requirements, it’s likely that billions of dollars will remain
in the PPP when the government stops processing applications after
June 30.

Trump Admin Won’t Release Data on Small Biz Loans

Reversing an earlier commitment to release information
on aid provided to small business owners, the Trump administration
said Wednesday that it will not disclose the names or dollar
amounts of loans made through the Paycheck Protection Program.

Appearing before the Senate Committee on Small Business
and Entrepreneurship, Treasury Secretary Steven Mnuchin said he
believes the data is "proprietary information, and in many cases
for sole proprietors and small businesses, it is confidential
information." Releasing the data could harm participants, Mnuchin
said.

Critics worry that the lack of transparency could make it
harder to identify fraud and abuse within the $660 billion program,
which approved loans rapidly, with less vetting and oversight than
usual.

"Clearly, this is meant to prevent some entities
from being embarrassed, or being revealed," Steve Ellis of the
advocacy group Taxpayers for Common Sense
told The Washington Post. "Nobody forced them to
take the money, and it was already set up so that they could return
it with no questions asked. And they were told that this
information would be made public when they applied for the
loan."

Unemployment Claims Climb Past 44 Million

Another 1.5 million people filed for unemployment
benefits last week, the Department of Labor announced Thursday,
bringing the 12-week total for first-time claims to more than 44
million.

While weekly initial claims have maintained a downward
trend over the last 10 weeks, the latest number is still more than
twice the pre-pandemic record high of 695,000 set in
1982.

The report also suggests that some workers have begun to
return to their jobs, with the total number of people receiving
unemployment benefits dropping to 20.9 million, down from a revised
21.3 million the week before. Still, that number is stunningly high
relative to previous recessions.

Federal Reserve head Jerome Powell recently said
that the economic recovery was likely to be sluggish and stretch
well into next year. On Wednesday the Fed estimated an unemployment
rate of 9.3% at the end of 2020.

States Sue 26 Generic Drugmakers, Alleging ‘Multibillion-Dollar
Fraud’

A coalition of attorneys general from nearly every state
filed a massive
lawsuit Wednesday charging 26 generic drug
companies and 10 executives of conspiring to reduce competition and
raise prices. The lawsuit by 46 states, four territories and the
District of Columbia is the third in an ongoing antitrust
investigation. It accuses the manufacturers of secretly agreeing to
fix prices of more than 80 prescription creams, ointments and
tablets from at least 2009 through early 2016.

Brand names of some of the drugs allegedly involved in the
schemes include Dilantin, an anti-seizure medicine; Lotrimin AF
Cream, an antifungal; and Ritalin, a treatment for attention
deficit disorder.

"These generic drug manufacturers perpetrated a
multibillion-dollar fraud on the American public so systemic that
it has touched nearly every single consumer of topical products,"
Connecticut Attorney General William Tong said in a
statement. "Through phone calls, text messages,
emails, corporate conventions, and cozy dinner parties, generic
pharmaceutical executives were in constant communication, colluding
to fix prices and restrain competition as though it were a standard
course of business. But they knew what they were doing was wrong,
and they took steps to evade accountability, using code words and
warning each other to avoid email and detection."

Tong said the plaintiffs’ case is built on evidence from
cooperating witnesses, phone records, notes and a database of more
than 20 million documents and call records "that paint an
undeniable picture of the largest domestic corporate cartel in our
nation’s history."

Health insurer Cigna filed its own
lawsuit this week, alleging that price fixing by
the companies led to "overcharges" and has caused "significant
harm" to the nation’s health care system.

A number of the major drugmakers named in the suit denied have
unlawful conduct or price fixing. A Novartis subsidiary named in
the new suit agreed in March to pay $195 million to settle
price-fixing and other charges "The individual instances of
misconduct at the core of the resolution we reached with the U.S.
Department of Justice in March do not support the vast, systemic
conspiracy the States allege," Novartis
said Wednesday. "We take seriously our compliance
with antitrust laws, and we will continue to defend ourselves in
this matter."

Number of the Day: $26,003,751,512,344.91

The national debt topped $26 trillion this week,
according to Treasury Department
data. Debt held by the public is now approaching $21
trillion.

House Will Vote on Obamacare Changes, Infrastructure

The House will vote the week of June 29 on a
massive infrastructure package and a bill meant to improve the
Affordable Care Act, Democratic Majority Leader Steny Hoyer
reportedly said Thursday.

The House is now in recess but will return on June 25, a
week earlier than previously planned, to take up a police reform
package. It will then turn to legislation to lower costs under the
Affordable Care Act and a $494 billion infrastructure
package.

"We're going to meet on the Affordable Care Act, trying to
bring the costs of premiums and co-pays and deductibles in the
Affordable Care Act down to a place where people can in fact afford
them," Hoyer said during a webinar hosted by the law firm Baker
Hostetler, according to
The Hill.

Both measures have little chance of passing the GOP-controlled
Senate.

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