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tv   Power Lunch  CNBC  August 24, 2016 1:00pm-3:01pm EDT

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pfizer. >> we were all on pins and needles on that one. >> no, i don't poke josh. go play golf, josh, go bowling, go to chico's until yellen speaks on friday morning. that's all that matters. >> that's it for us here on "halftime report." "power lunch" begins right now. all right, melissa, see you in just a bit. hello everybody. i am brian sullivan. here's what's on your power menu. mylan under fire for a second day for epipen prices. but does the fda blamed for this and other type price hikes? is your money stuck? new meaning to the 1%. and forget four years of college, why just 15 weeks could be your new path to a six-figure salary. "power lunch" always on the path to prosperity beginning right now. i'm michelle caruso-cabrera, here's what else is happening at this hour.
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stocks are holding in the red. ibm, home depot, united health, the biggest laggards in the dow at this hour. oil also headed lower on unexpected build in u.s. stockpiles last week. the death toll continues to rise in central italy following a magnitude 6.2 earthquake. we are headed to the scene straight ahead. welcome to "power lunch." we have a big two hours coming your way including mounting pressure on the clinton campaign and its uncomfortably close ties to the clinton foundation following a release of yet another new round of e-mails. susie welsh is with us for the entire show. so good to have you here. >> thank you. >> first, let's begin with mylan labs down close to 8% since we reported on friday. the company is once again raising the price of its life saving epipen allergy drug. let's get to meg tirrell with the latest. >> hi, guys. you are seeing continuing pressure today though it's not been quite as bad of a day as previous days. wall street analysts coming out acknowledging the pressure you're starting to see on
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investor sentiment because of raising the price of the epipen so much. but trying to kind of downplay how big epipen is as a part of mylan's business saying it's going to be a decreasing part over the coming years. however, the political attention is really only increasing. senator bernie sanders now piling on today tweeting out mylan's greed is apparently limitless. they didn't just raise the price of epipen's 500%, they also dodge u.s. taxes. and tweeting a link to "los angeles times" column citing inversion to the netherlands recently as for that. that piles onto more political pressure that you're seeing from senators urging inquiries from senator blumenthal who you spoke with yesterday, grassley. you're also seeing the american medical association coming out with a statement saying the ama has long urged the pharmaceutical industry to exercise reasonable restraint in drug pricing and with lives on the line we urge the manufacture of mylan to do all it can to rein in these costs.
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former medtronics ceo bill george this morning on "squawk on the street" weighing in as well. take a listen. >> she's pricing that way because she can get away with it. but i can tell you this is going to put at risk after a new administration comes in whether or not they'll continue this. and i think the drug companies need to show a lot more restraint and stop pushing up prices so rapidly because they're harming the american consumer. >> bill george they're referring to mylan ceo heather bresh saying she stepped in a hornet's nest here with raising the price of epipen by so much. >> yeah, meg, you're going to stick around as well. bring in susie welcwelch. a company not only under fire for epipen but other drug hikes. to be fair there have been other pharmaceutical companies that have raised prices as well. what would your advice to mylan be? >> to get into the room as fast as they can with the advocates and come up with a negotiated solution and get in front of the press together saying this is the way we're going to find the right thing for the consumers and for the company. right now they're probably hunkered down, they're in crisis
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mode. they don't know what to do. and then they're not talking to the press. this is a company that's already got very bad optics. we're dealing with a product which is a life or death product that mainly children use. and it's a monopoly, it's got the optics of the inversion. it's such a perfect storm that the only thing you can do is quickly find a solution with the advocates and get it out as a negotiated solution in front of the public. >> do you think they need to lower the price? >> it looks like they have to. i don't know how they can get away with this without lowering the price. >> let's bring in former fda commissioner now the president for the center for medicine in the public interest. you said something during the break, i'm going to repeat it, i hope you don't mind. you said this is a perfect storm of stupidity. >> it certainly is. this is a company with an annuity product. it's been around for a long time. and they've stepped in a hornet's nest probably the polite way to put it. what's going to force the fda to do finally is prioritize products that are off patent through the generic drug or generic device approval process.
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because that's how you drive competition and keep prices down by making sure there's competition. >> congress keeps wanting to blame the company. but you highlight the fda. this drug, there's nothing special about this. in theory lots of competitors could be making this. the price is high enough certainly to draw supply to the market, but it's not happening. is that the fda's fault? >> i think it's the fda's opportunity to prioritize these types of propositions. >> well, to michelle's point, teva had a product last year rejected in november of 2015. and the fda pulled sanofi's competing product called avi -- >> it has dispenser issues. >> two more facts in europe where i think the regulatory burden is far higher than anything we've ever seen in the united states, there are two competitors to the epipen. why aren't they here? >> there are two problems, first when you don't have only just one player in the game, the cadillac product, you risk shortages. especially when the fda shuts down production facilities. more importantly when the fda doesn't prioritize these types
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of applications and doesn't help the company succeed and teva is a great example world class company they know what they're doing, you're allowing the company to do the wrong thing. the interesting thing, heather bresh, president of mylan, she's the daughter of senator joe manchin. so hopefully labor day there's some discussion going on here about doing the right thing. >> but at the end of the day i don't think the fda's going to hold the bag on this. the company is and the company's executives and managers and leaders. they're the ones who will have to either fix this or there will be blood on the floor. >> he's highlighting what should be. you're highlighting what is likely to be. >> i just think that the people who are going to look bad and the company that's going to take -- it's going to be mylan. >> but again, to be not defending the price increase from mylan, but we brought it up yesterday. i think it's important to note that many of the top drugs have seen prices increase this year. some more than doubling. in fact, four of the top ten drugs have seen massive price increases over the past 12 months. in fact, there was a "new york times" article on april 26th, i think it was, despite price
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increases the pharmaceutical industry hasn't learned its lesson, something to that effect, peter. the idea being it's not just mylan, it's everybody. what the hell is going on? >> you have two separate silos here. on the generic drug side you have people that have monopolies on products needed by a lot of people and the fda can certainly help. on the innovative drug side you have companies raising the price because they're being forced by pbns and insurance companies to give them deeper and deeper discounts. >> what is the role of the pharmacy benefit manager, the pbm, the names none of our viewers probably ever talk about that are in between the pharmacy and the pharmaceutical company, their profits and revenues have also been going up dramatically the last few years. but they get no attention. >> sure, when people say drug prices are too high, that's the sound bite, right? what people really mean is their co-pay at the pharmacy is too high. and that's not a factor of the pharmaceutical industry because they're giving 20%, 40%, 70% discounts to the pbns, insurance companies who are not passing
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along the savings to the consumers which goes back to obamacare, the aca, where people realize having health insurance and having access to health care are two completely different things. so it's this whole ecosystem of people playing nicer in the sand box. >> that was really nicely summed up. i want to ask you though, how does the fda solve this problem of the generic backlog we're seeing? why when they reject the teva application do we just see certain deficiencies cited and don't know anything else about why it was rejected or how they're working together to fix the problem? >> firstly the information in that file is confidential to teva, if they wanted to share it, they could. i want to know at the fda this should be priority, we should work with this company to make this happen, where's upper management, adults saying careful attention, attention must be paid, we have to avoid shortages and make sure competition exists, which is the concept behind -- relative to drug anyway. that's the fda's role in helping price, value and quality.
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it's a triad. they get to market with a degree of speed that impacts people's pocketbooks. >> you're describing something that only happens in a nonbureaucratic situation that's not the government. the day this gets dealt with is the day a very unfortunate child or family member dies because they didn't buy the epipen because it was too expensive and then it blows up and then the government does something about it. >> and that's why the political attention's so important. there will be hearings in the senate. things will happen. >> speaking of politics, i'm not sure what you were trying to raise with the fact the ceo of this company is a daughter of a senator, but when i look back at the history of this company, you can read that they were very, very good at marketing. they were very good at building -- it reads to me that they were very good at regulatory capture. this is what economists use to say you lobby and you lobby and lobby the government. suddenly the epipen for years it was around, but now it's required to be at school. you're required before you can go to camp.
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you must buy it. it has been legislated into profitability. i bet due to the success of a lobbying of the company. >> and the fact that it's actually a really terrific product. but i'm not -- but relative -- >> but it was a terrific product long before mylan took it over, right? >> that's exactly right. they knew what to do. they knew how to get it out in front. my point about heather's dad being a u.s. senator is she should no better. in an election cycle no less to do something like this expecting something not to happen is just naive. >> all very interesting. >> yeah. >> peter, great to have you on. thanks so much for weighing in. >> thanks so much. >> and suzy is sticking with us through the show. all right. rick santelli at the cme, what's the demand like? >> the demand was pretty good and i think this is a major statement of two good auctions in front of jackson hole. today, 34 billion five-year notes yield at auction 1.125. pretty much spot-on with the when issued market. i gave it a b-plus. a little better than yesterday's
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two-year note auction. bid-to-cover 2.54. basically two and a half oversubscribed to, better than 2.4 ten auction average. 68.7 on indirects. i don't have a higher indirect number on my database. and 6.2 on indirects little light but a b-plus nonetheless. tomorrow we'll finish out the week with 11 billion in supply with 28 billion seven-year notes. do you think the fed's going to normalize? these auctions, well, the investors don't seem to think so, at least as of now. michelle, back to you. >> no, they don't. okay, rick santelli, thanks so much. now the latest on the terrible earthquake in italy. nbc's lucy kafanov has the latest. >> reporter: this is someone's home that nearly collapsed in the earthquake that struck the city amatrice in central italy about 3:30 a.m. local time. earthquake, the blast was so powerful that i felt it 100
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miles away in rome. here though in the epicenter you can see it completely destroyed this building behind me. there's a car that's been trapped by the rubble. rescue workers have been racing against the clock to try to find any people who are still trapped beneath the rubble. officials have confirmed at least 17 people killed in this italian town. and for the earthquake to strike at this time, summertime, people, tourists have been up here visiting family, going through here. amatrice is the birthplace of pasta. the home of a very famous pasta dish. so this would have been full of people, idyllic italian town withstood the test of time. the mayor this morning saying there's basically nothing left. and as you can see behind me, those words ring true. guys, back to you. >> nbc's lucy kafanov reporting from italy on that tough story. coming up, we'll get back to the markets and call it the 1% market. has nothing to do with the wealthy but may have everything
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to do with what could be the new normal for your money. and it is the story that will not go away. mounting pressure on the clinton campaign following the release of a new round of e-mails. more on the very cozy relationship between the foundation and the state department coming up. discover how a lexus master craftsman turns
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we were just talking about mylan labs, the epipen politics. well, hillary clinton has just said stuff about this. and meg tirrell is there with a
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statement from hillary clinton. >> stuff she has said, michelle. hillary clinton saying there's just no justification for the increase in the price of epipen and saying therefore she's calling on mylan to immediately reduce the price. calling this outrageous. just the latest, quote, troubling example of a company taking advantage of its consumers. she says she believes her pharmaceutical and biotech industries can be an incredible source of american innovation giving us revolutionary treatments for debilitating diseases. but she says it's wrong when drug companies put profits ahead of patients raising profits without justifying the value behind them. she says here kind of going back to the conversation we were just having that her plan puts forward a way for her to produce alternative products, increasing competition as a way to keep down drug prices. but, you know, hillary clinton's tweeting about these kind of drug price increases going back to last september when she treated about martin shkreli really impacted the sector. >> there was a biotech tweet and we saw a direct impact, the biotech index fell sharply. did it ever recover?
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>> it fell 5% that day and been on a free fall ever since. >> thanks, meg. >> thanks, guys. well, here's a pretty incredible statistic. the s&p 500 is now gone 32 sessions, a month and a half in calendar days, without a more than 1% move either way. that is nearly historically the flattest and arguably the most boring market in human history. but yet some are still figuring out how to make money. portfolio manager at wells fargo management with us. margie, i will go with you first. how does anybody make money in this kind of market? it's literally just flat lining, what are you doing? >> well, i think you can see underneath that flatlining there are some sectors that have had very good moves. and there's also been sector rotation. so i think the way to make money is simply to be on the right side of those sectors, be in those sectors that have good news, that have some growth. things like technology. i think that part of the tools and devices in health care
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sector are some examples. and also really consumers. they're doing pretty well this year. i think that those sectors will all continue to do a lot better than that flattish 1% market that you're talking about. >> craig hodges sitting with us onset. somehow in this market you have made, am i correct, 26% on your hodges fund this year? >> yeah. trying to be opportunistic. >> well, you've obviously hit the right opportunistic spots. >> yeah. >> but what have you done for us lately? what are the stocks that you like now that you are buying now to just continue that pretty amazing 26% run this year. >> yeah. >> well, you've got to be opportunistic. this market isn't cheap, but i don't think it's expensive. there are opportunities created all the time. an example last thursday remember prison stocks were clobbered. >> yeah. >> we followed those stocks for 25 years, we know that's a very small sliver of their business that's not going to effect them necessarily long term. >> did you own them already and bought more? >> a little bit. we had a 3% position in small cap fund, took it down to 1% and now we're back to 3%.
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so those things almost got cut in half that day. but the market in this type of market it will give you opportunities all the time. so the market like i mentioned is not cheap, but there are a lot of opportunities. the one part of the market that i think it is cheap is the nonenergy part of the market that's been affected by energy. things like -- >> frac san. >> that's one example. but not the pure energy companies, companies like texas banks that have been clobbered or a company like la quinta. >> the hotel company? >> yeah, because texas exposure, 25% of hotels are texas. >> when you say opportunistic things, you mean particular companies that are hurt for the wrong -- what you think are the wrong reason. >> right. when you can buy great companies on sale that's what we try to do on the hodges fund. >> hold on a second, we have another news alert related to mylan labs. meg tirrell hasn't gone anywhere. >> that's right. the calls from washington on mylan keep oncoming. now it's a letter from the senate aging committee, senators
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collins and mccaskill writing letter to ceo heather bresch about the epipen asking for more information about the decision to raise the price, any analysis used by mylan related to the pricing and market share of epipen since 2007 asking they provide a briefing to the committee on the pricing of epipen no later than two weeks from today. as a reminder, the senate aging committee is the committee that also held hearings focusing on valeant pricing and on touring pricing. >> the martin shkreli hearings. >> that's correct. right. and one focused entirely on valeant. >> nobody is going to come out for mylan. in this political environment, there's not going to be somebody stands and says i think there's a good argument for them keeping the price. even if you truly believed in the free markets in that way, they have got to come out with some kind of negotiated solution right away. >> craig, would you buy mylan? is this opportunistic? >> too many cost currents, too many headwinds especially with the election coming up. there's a lot of rhetoric. i would wait. but at some point --
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>> margie, you talked about sectors, biotech sector under a lot of heat. do you like that sector? >> i think the issue isn't just a price like epipen, i think throughout the products, all the drug companies and biotechs have been having really big price increases the last few years really contributed to earnings. so i've been cautious on the sector for a couple years feeling that this was really going to depress earnings because they're going to have to put a lid on prices or reduce prices. even on drugs that haven't been getting these huge increases. >> that's not a good thing for the sector. that's the political fallout regardless of what you're doing. >> in the last ten minutes we've had two high level comments. meg tirrell, you know what, maybe just sit there. >> you're not allowed to leave. >> i have a feeling we'll get more. but margie, thank you. craig, 26% up year-to-date, la quinta. >> all right. thank you. why 15 weeks could be your new path to a six figure salary. that story straight ahead. my business was built with passion...
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a lot of debate about whether or not the price of college is worth it when it comes to landing a job in technology, coding camps promise to get you there faster. aditi is live in san francisco at a coding camp. >> hi there, michelle. we spent the whole morning here at hack reactor in san francisco. you can see the students right now jam packed in the room. they're listening to a lecture right now. later on they'll be coding. and all told they spend about 12 to 16 hours a day inside this
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building. this is just one of dozens of coding camps throughout the country turning students into software engineers. and here's why. 98% of its grads land jobs at companies like google or facebook or amazon. and a lot of these students are actually choosing boot camps like this one over college or grad school. the average starting salary is $105,000 a year, and the tuition $20,000. that's one-tenth of what many students are paying at elite colleges. one of the strengths of coding camps is the ability to offer the most current curriculum. >> we are teaching up-to-date versions of recent open source frameworks. and we are familiar with industry trends in a way that you don't generally see in college programs. >> and, guys, these programs are pretty elite. hack reactor calls itself the harvard of coding boot camps. they take about 500 applications every single month. and they only take about a quarter of those students. back to you guys.
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>> wow, a pretty low yield. aditi, thanks so much. suzy, what do you think of this? reminds me of the vocational schools of the old days. >> 30 years ago said we're going back to the trades and your father was a carpenter and you became a carpenter, now we've got this. remember when parents scrape and save so kids could be a lawyer or doctor? i see the parents and kids 50/50 on this. if i could buy stock in hack reactor or thai going to have competitors very quickly, that's a real growth industry. >> by the way, we do need more carpenters as well. >> and plumbers. >> we need more skilled trades people. >> this is the trades. i met this kid the other day, family came to visit us and he was 11 years old. and i said to his mom what does he like doing and she said coding with her eyes a glimmer. because this is the future. it's almost like the old ticket, doctors, lawyer, always going to have food on the table. >> i know biotech and pharma are out right now but is there any play on carpal tunnel for those
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people? >> yeah. >> go long keyboard injuries suzy. >> kids love coding. they get addicted to it. the parents see it and it's not a bad thing. they see future for their kids. they see job security. >> cool. still ahead, access versus favors. the latest on the clinton e-mail controversy during her time at the state department. plus, lots of new news on mylan hitting in the past 15 minutes. the stock at session lows. we're all over that story, more coming up.
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hi everybody. i'm sue herera. here's your cnbc news update for this hour. turkey-backed rebels have taken the border town from isis as turkish forces crossed into syria earlier today. the operation is part of a military operation to root out the islamic militants along the border. turkish forces did not sustain any casualties, but one syrian rebel was killed. gop vice presidential nominee mike pence touring a 115-year-old foundry business in north carolina, saying lax enforcement of international trade deals is the reason for the decline in u.s. manufacturing jobs.
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>> donald trump and i know and believe the chief among those reasons is that we have not been smart, we have not been tough in defending american jobs and american workers when it comes to international trade. and that's about to change. >> dash cam video shows a connecticut trooper and two men pulling a driver from a burning car. the driver had lost control of his vehicle, slammed into a guardrail causing the car to burst into flames. the driver was taken to a hospital to treat his injuries. a judge in california has dismissed a case that accused starbucks of underfilling its iced drinks. the judge ruled the plaintiff had not alleged any viable claims against the company. that's the news update this hour, brian, i'll send it back to you. the judge said if it said ice and liquid, you should know it's not all going to be liquid. i'm serious. i read the statement. >> i know. there's so many things in my head right now, 99% of them are not family-friendly.
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but i hope it's not peak fill but i hope it's peak lawsuit in america right now. i hope that's the lawsuit peak. >> indeed. and they were seeking class action status. >> oh, god. >> they were. i'm serious. >> well, you can't spell class without -- market's right now is what the board says. there's not a lot going on. the dow jones industrial average down, nasdaq down, i'm kind of doing this -- if you see me doing this i'm trying to look over the camera to see what the dow is doing. we're down 27 points right now so we could be in guys for our 33rd straight session without a 1% move for the market. which depending on whose stat you look at, we're getting to literally 30-year historical -- >> flatness. >> flatness, for lack of a better term. >> i wonder if the political uncertainty is one of the things playing into it. there's no other place for the money to go, but people gaining what's about to happen in november if that is the part of the reason for the flatness.
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>> it's amazing how many people you'll talk to and they'll still say, well, the stock market you can't make any money, the stock market last five years have record high, record high, record high. >> right. little guy hasn't been around for it. >> i know, they haven't been at all. this is the story that won't go away for the clinton campaign. seemingly close ties, maybe too close, between the clinton foundation and the state department. eamon javers live in d.c. with the very latest on the e-mail controversy. eamon. >> that's right, brian. this is the story that won't go away. the reason is the clinton campaign just not going to be able to shut down all these outside investigations into the e-mail situation. you've got now judicial watch, a conservative group, citizens united, a conservative group. both of them doing their own investigations churning out documents on their own schedule. you've got the fbi, which now apparently has discovered 15,000 additional e-mails as well as the state department's own investigation. all of those are on timetables that the clinton campaign can't control. it looks like we'll still be getting new e-mail dumps all the way through september and october. we got one yesterday.
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citizens united putting out more than 300 pages of documents just in going through them. here's one small one that i found in the e-mails, but it just gives you a sense of the life inside the clinton foundation. state department says this is an e-mail from dennis cheng, a key figure in terms of donor maintenance at the time this e-mail was sent. it's too huma abedin, she's an aide at the state department. he e-mails her are you coming to little rock, arkansas. we have donors flying privately on friday afternoon if you want a ride. she apparently said yes to that offer, accepted the ride. that's just something not standard practice for staffers in washington, d.c. to accept private jet rides from donors to large foundations. if members of congress want to do that there's a rig ma role they have to go through in terms of disclosure and at the state department that apparently doesn't raise red flags. here's what they said yesterday,
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federal employees, including special government employees, are permitted to engage in outside personal activities including outside employment or business activities, and as a general matter may receive gifts or reimbursements that are related to those activities. so this one just gives you a sense of the fact that you've got these clinton foundation donors who are dealing with the clinton foundation, who are also dealing with the state department staff under hillary clinton at the time. that's the milieu that's being unpacked in these e-mails. >> and story online there's another layer you haven't done on air because we don't have time about the use of a private e-mail on the part of hum huma abedin on the part of that. but i want to ask you about something else, special government employee, this was something created with the idea if you are somebody in the private sector with a lot of expertise and hired by the federal government to do extra consulting, they don't -- i'm not sure abedin actually qualifies for that. in 2013 politico said she was working for the state
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department, hillary clinton, tenao and the clinton foundation at the same time. >> right. so all of these -- huma is somebody who's very close to hillary clinton. in fact, on the daily schedules what you can see in terms of huma abedin, she's the one leaving all the events with the secretary of state. the one riding in the limo with hillary clinton after every one of these events. she's with hillary clinton day and night sending her e-mails constantly. you can see in the record here. and she's also wearing all these different hats associated with all these different clinton enti entitys that are in and around the clinton orbit. and there are a bunch of them. so the complexity here is really difficult to unpack. and that's what reporters are trying to do right now. it raises the question of whether there's a conflict of interest here. but politically for the clinton team it really points to the fact that there's a lot here for reporters to go through. and there are a lot of entitys that are hostile to hillary clinton. this will continue to churn up stories for the next coming months. they'll just have to deal with this politically.
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we'll see if it causes any damage to her in the polls which have been in her favor lately. >> keeping you busy. >> you bet. >> let's discuss that with dick morris, senior advisor and con dant to the clintons including their time in the white house. latest book called "armageddon," how trump can beat hillary. welcome back to "power lunch." what do you make of the hillary clinton situation today? >> well, in revelation that out of 150 people who visited her in the secretary of state's office during her tenure, if you exclude staff employees or representatives of foreign governments, 150 people from outside -- >> yeah, this is the a.p. story you're citing. >> yeah. 85 of them were donors to the clinton foundation. a majority of them. so it's like she had a cash register on the receptionist desk, ca-ching. >> dick, if you were still
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there, what would you advise them to do about the clinton foundation? >> oh, lord, close it down. announce you'll keep it closed. show that you've learned your lesson. you know, when i worked for bill clinton in 1980, he had just lost the governorship and he hired me back to get him back in. i didn't do the losing campaign. first thing i did was to get him to apologize for raising taxes. what hillary needs to do is say i realize that there are conflicts with the clinton foundation. i'm not going to let that happen if i'm president. and we're going to close it down. but she won't do that. because when i knew the clintons, this is the point i make in "armageddon," they wanted money in order to get power. give me campaign contributions. now they want power in order to make money. >> i don't think she's going to do it because she doesn't need to do it. because people are looking at these two candidates and they're saying, okay, they're both flawed and i pick her flaws or i pick his flaws. and they're not -- i don't think any new e-mail revelations, even
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if they're incredibly ghastly will change the minds of the people who have said, okay, she's flawed, i don't really like the smell of the e-mails but i've made a decision that her flaws are more acceptable than his. because we really got this fight of who's less attractive. so she's not going to apologize because she doesn't need to. >> but the polling suggests otherwise. her real clear politics average has gone down from 7.8 lead nine days ago to 5.1 now in a two-way race. and to 3-point something in a four-way race. there's a real evidence at this point that this scandal is damaging hillary. and it's not the e-mails per se any more than in the watergate it was the tapes. it's what's on them. >> so you think there are undecided people who are watching this e-mail scandal unfold and they're sort of saying, hmm, all right, this is the final straw for me. and that we're seeing as she goes town trump go up because of
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the e-mail scandals? >> well, i think trump is going up, which he is in the polling, because he's behaving himself. he's no longer getting into -- >> well, for now, right? >> -- for two weeks he hasn't said anything stupid. that's kind of a record. he's doing -- >> said by a guy who supports him, right? can we say that? you support him? >> well, i do. because i think that ultimately -- he had a learning curve to learn how to be a general election candidate in the united states. it's a tough thing to do. and what that involved is never saying anything other than the scripted teleprompter stuff that he's planned and thought through, polled and rehearsed. because if you say anything else, the media pounces on it and overwhelms your message. and that's not happening now. >> you don't win the election nationally, you win it state by state. and in the key states that everybody's talking about, both campaigns acknowledged what matters, ohio, florida,
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pennsylvania, north carolina, competitive but trailing. do you think he has time to turn that around and win those states? everybody seems to think they're must-gets. >> yeah, sure he does. remember that in the summer august of 2004, kerry was 7 points ahead of bush. and dukakis was 17 points ahead of bush senior. and bush who lost the popular vote was 16 points ahead of gore. there are major changes possible. and bear in mind when you look at individual state polling, those tend to be over a longer period of time. and they are less valuable in reflecting minute-to-minute trends. i think that trump scored very well last week. and i think clinton's having the toughest time she's had since really the middle of july. >> dick, how much of this election is going to be about people not voting for who they like but voting against who they don't? >> all of it.
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i think that will be a huge factor. >> that sucks. >> and there's one very important element here, gary johnson, the third candidate, the libertarian candidate. all of the polling shows that he hurts hillary more than he hurts trump. hillary's vote share goes down by 3 points, trump's goes down by 1 point when you bring gary johnson into it. normally the libertarian candidate hurts the republican. >> that's what i thought, yeah. >> but in this case it's hurting hillary more. >> do you think he can get enough -- sorry to jump in, we're running out of time. do you think gary johnson can get enough votes -- i know he'd hate this term but to make a third party candidate viable in the future? >> well, i don't know about the future, but what he will do, i think, is get 15% in the polls which puts him in the debate. >> wow. >> and once he's in the debates, then he really could go up into the high teens and low 20s. remember ross perot got 19% of
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the vote in '92, and that helped bill clinton get elected. >> wow. dick, thanks so much for joining us. >> thank you. >> his latest book is called "armagedd "armageddon". up next, 60 seconds that could make or break a company. >> coming up, a start-up brewing coffee on the go. >> mojo is just like your coffee maker at home except we've engineered a way to cram it inside of a travel mug. >> will the panel drink it up? >> with all the coffee snobs out there, it's going to be hard for them to build a big subscription service. >> you have big brands like a starbucks or keurig that are not going to give up ground easily. >> stay tuned to find out. you may think you can put off checking out your medicare options until you're sixty-five, but now is a good time to get the ball rolling. keep in mind, medicare only covers about eighty percent of part b medical costs. the rest is up to you.
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and we've developed and patent mojoe, the first mobile coffeemaker that brews fresh coffee and tea on the go. we've engineered a way to cram it inside of a travel mug. so at any temperature water it will heat for you, your own coffee grounds or patented to-go cups and brew on the go with car adapter, wall adapter or rechargeable battery. it brews directly inside the device. >> mojoe delivers fresh quality coffee to coffee lovers on the go, so professionals with long commutes, travelers want quality coffee while away or those looking to spend less on daily coffee habit, we've received incredible feedback from coffee and tech experts and received best new product award at this year's coffee fest in new york. not here to replace your coffee maker at home, more like your keurig on the go for when you're not at home. >> welcome to today's power pitch. i'm melissa lee. you just saw mojoe's pitch.
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let's meet the panel. joining us start-up advisor alicia syrett, she has more than 40 companies in her personal portfolio and serves on the board of the new york angels. also with us nir liberborn. and from the bay area david wu, general partner at maveron, with $1 billion under management with a focus on consumer tech. he's invested in over 50 start-ups as both an angel investor and a vc. okay. so these guys now are in the hot seat. alicia, why don't you kick us off? >> so i thought the pitch was really good overall in terms of the product overview and also talking about some of the milestones. great delivery too. i would like to hear a little about your own backgrounds and how you're reaching customers, but i'll still give you a solid b. on the reaching customers front, i know that people can go to your site now to preorder. but what are you thinking about in terms of marketing and distribution partnerships in the future? >> we are looking for some big
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name retail stores to have mojoe in. we're also looking to co-brand with some other roasters and other, you know, hospitality and target businesses that serve our target customers. >> nir. >> i thought you did a nice job talking about the product and benefits, but i would like to hear more about retail strategy and background as founders, so i gave your pitch a b. this is obviously the first generation of the product and you'll continue tweaking it with time. what do you have in store for the second generation of the mojoe? >> for the second generation you can look to see that we're going to get a smaller size mojoe, it will be more convenient to kind of hone in on the convenience of brewing coffee on the go. >> using the same patented design built into the mojoe, we plan to solve the solution for foods, quick meals on the go as well. >> david. >> i actually really like the pitch. i thought you did a great job of perking my curiosity and getting me interested in this mass product that i think the end consumers could get really
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excited about. i would like to hear a little bit more about your competitive advantage, but i'm going to give an a-minus. if this device is wildly successful, is it more about building a brand where you can build a suite of more and more products, or is it more about turning into a coffee subscription service? and is that the company you become at the end? >> it's the latter that you mentioned, david. you know, we want to build the brand, obviously. get mojoes into coffee lovers hands, but the more units that coffee lovers are using means the more coffee that they're drinking. and the monthly subscription is really going to be the driver for our revenue and our growth. >> while we were chatting we actually brewed a mojoe, so we've got it here. it's all ready. >> just like at home you'll have a lid that closes and opens. >> all right. here you guys. >> thank you. >> thank you. >> it's surprisingly hot, right? >> it's delicious. >> thank you. >> so talk to me about margins. what are the margins you're targeting for the main product versus a lot of the accessories
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you plan to sell? >> our margins right now through our website are right around 70%, 80%. our mojoe to-go cups are sitting at a 50% margin. and the mojoe to-go cups are just like your k-cup, that would be a monthly subscription. >> we've heard what joe and alex have to say. now we want to know if the panel is in or out. so, alicia, what do you say? >> look, i think there's a huge opportunity in the coffee space. but it's also no secret that you have big brands like a starbucks or keurig that are not going to give up ground easily. but with that said, i think that this is a really cool product. and if consumers latch onto it, i think they'll become inseparable with it. i like these guys as a team. and i think that they have really made progress in terms of initial sales and filing a patent, so i'm going to go in on them. >> nir. >> the coffee market is huge and continues to grow. and i like that mojoe is creating a new category in mobile brewing, however as an investor i tend to like more retail and revenue traction, so
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just for now i'm out. >> david. >> so i really like this device. i think as soon as i can buy one i'm going to go on the website and preorder and buy one. i'm excited about that. but in terms of the longer term vision of being a coffee subscription service, except for the keurig k-cup where you have to use their coffee, i don't know of anybody who buys their coffee from the coffee maker company. and i think with all the coffee snobs out there, it's going to be hard for them to build a big subscription service when they allow you to use your own grounds wherever you buy them. so i'm going to be out. >> alex and joseph, your reactions. >> we'd love to get insightful comments from great investors like yourself. we really appreciate it. >> all right. and as we all drink our coffee, thanks, guys. joseph, alex mojoe brewing company. that is today's power pitch. >> all right. so you heard what the panel had to say, most outs. suzy. >> i love this company. first of all a fabulous name.
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mojoe is a great name. don't discount how important a good name is. i think they should partner with starbucks because i don't think anybody's going to buy their coffee. biggest upside is in a gift. everybody knows a coffee drinker, great under the christmas tree, i would have been in with them. i think they have a future with that product. >> well, they're watching right now. they'd be happy to know that. >> you go, guys. >> suzy welch says she's in, michelle. two huge developments on embattled mylan breaking within the past hour. hillary clinton calling the epipen price hike outrageous. now the senate wants answers. the stock hitting session lows. we're going to have the latest fallout straight ahead. first though two disaster du jour stocks on radar, both in retail space, both dropping sharply today, both blaming some of the same reasons why. all that coming up. ♪ using 60,000 points from my chase ink card
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falling. they should merge, one is lazy, one is obviously moving too fast. if you look at their website, not cheap, but trying to skew younger, doesn't seem a good match. >> brand confusion. no one can tell the difference between limited express and all the competitors in that space. >> what about la-z-boy? >> i don't think they've updated their brand. i think it's a tired brand. it's a brand that sort of -- >> what's it saying? >> people know la-z-boy sort of your uncle lays in when he's watching tv. it hasn't cool-ified the brand. >> what's particularly troubling to me about the numbers is that housing is hot. >> yes. >> housing is hot, people generally buy bigger homes. >> renovations are huge. >> when you're renovating, adding a room, buy furniture and they're still not benefitting in that environment. that says to me poor execution,
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poor promotional strategy, poor management, all the above. >> people are saying i'm buying they're in the 30s or 40s buying and la-z-boy is something your parents or grandparents did and it doesn't feel new or fresh. >> the way the buick used to feel. >> right. look what buick did to try to update the brand? >> all right. suzy's sticking around for the next hour. >> you bet. mylan hitting session lows as the outrage grows over the epipen price hike. the breaking political details when we return. ♪ mapping the oceans. where we explore. protecting biodiversity. everywhere we work. defeating malaria. improving energy efficiency. developing more clean burning natural gas. my job?
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i'm melissa lee. here's what's on the "power lunch" menu this hour. mylan shares taking a hit again. just in the past hour senate lawmakers taking aim demanding information about mylan's epipen price hikes. and presidential candidate hillary clinton calling the price increases quote/unquote, outrageous. we got the very latest ahead. clinton versus trump, our cnbc fed survey making an unprecedented call in presidential politics. and are kids getting too much homework? is it really making them smarter? the second hour of "power lunch" begins right now. hey, i'm michelle
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caruso-cabrera. let's get you a check on the markets. two hours until the closing bell. marks are lower but trading in a narrower range. they're not lower by much. today could mark the 33rd day in a row that the s&p 500 has failed to move 1% or more in either direction. you can see the dow's lower by 26, the s&p lower by 5 and nasdaq lower by 14. brian. now to our developing story, breaking in the past hour, embattled pharma giant michael sha -- mylan shares. meg tirrell here with some latest headlines coming from of all places the white house. meg. >> washington attention, brian, keeps ratcheting up on mylan. white house press secretary josh earnest was asked about the mylan epipen price increases just now. here's how he responded. >> pharmaceutical companies that often try to portray themselves as the invenn ttors of life sav
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medication, often do real damage to their reputation by being greedy and jacking up prices in a way that victimizes vulnerable americans. >> now saying also that the white house isn't second guessing mylan but saying prescription drug price increases can raise moral and ethical questions. this comes just minutes after hillary clinton put out a statement saying, quote, that she's made clear that pharmaceutical manufacturers should be required to explain significant price increases and prove that any additional costs are linked to additional benefits and better value. since there's no apparent justification in this case, she says she's calling on mylan to immediately reduce the price of epipens. and just after clinton put out that statement, a letter was sent by the senate aging committee to mylan ceo heather bresch asking they provide any analysis used by mylan relating to the pricing or market share of epipen since 2007 when mylan acquired it, along with any information reviewed or generated by mylan's board of directors relating to the drug over the same period. they say we ask that you provide a briefing to committee staff on the pricing of epipen at a
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mutually convenient time no later than two weeks from today. now, we reached out to mylan about this. they just sent us a statement back. they said we've reached out to every member of congress who sent us a letter. and we look forward to meeting with them and responding to their questions as soon as possible. but as you can see this starting to weigh on mylan shares. analysts putting out note saying specifically that senate aging committee letter is among the most concerning. we know they've held multiple hearings on drug prices, specifically focusing on companies including valeant and martin shkreli's company, melissa. >> yes, that's who they questioned, correct, at their last hearings. >> that's right. valeant. >> meg, thank you. so what is the solution to keeping drug prices down? cost control or free markets? let's bring in paul howard, senior fellow at manhattan institute, paul weissman, paul, i'll start with you. the story has moved very, very quickly in terms of developments. i'm just wondering if you think that the root of the matter is really being ignored here. i mean, it's interesting you see
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so many senators call out you want to address a specific problem, but nobody is getting at the root of the problem which could be the slow fda approval process. >> absolutely. so what you want is you want multiple competitors in a market kind of check price increases and keep delivering value to consumers. so you got to think about where the other competitors are. and if it takes multiple years and many millions of dollars to come to market, you're deterring competition. so years ago we need to think about where the competitors today looking forward get those competitors into the market help to bring down prices. >> robert, where do you stand on this? i mean, i would assume that you think all these calls and all the outrage is a step in the right direction, but are you afraid that after mylan is either forced or mandated to lower the price on the epipen that everybody goes away? they retreat and drug prices continue to advance at this degree? >> yeah, i think mylan's going to have to back down because what they're doing is in fact outrageous. and unjustifiable. and has no relationship to any of their expenses. they've overstepped.
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their greed is just too much. but you're also right that this is a systemic problem. mylan is not an outlier. we've seen more than half of the drugs over the last year have 10% year over year price spikes. both on patent and off patent products. we do need much faster competition. although the big problem with competition is not regulatory barriers. the big problem are patent or other monopoly barriers that the drug companies have won through this congress. >> but not in this case. >> no, not in this case. this is an unusual circumstance. and they do have an effective monopoly which they've built up in part through a lot of work on developing the brand. but as a monopolist they have some duty, just moral obligation with a life saving product, to keep their product reasonably priced. >> are you saying, robert -- by the way, they have about an 85% market share. aviq pulled off the market and there are some other minor players out there. would you suggest the ftc get
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involved, robert? >> it's not clear if there's really an ftc violation on this. i mean, the first thing mylan has to exert some kind of self-control and just stop the price gouging. we do need solutions which are much more -- >> because there is for viewers not familiar with antitrust law, there's nothing wrong with being a monopoly, there's only a problem with being a monopoly if you, a, tie to other entrants into the market or, b, use it to block other participants from entering the market. one wonders if that could be the case here. >> don't forget congress played a role in this. last year passed a bill that gave extra asthma funding to schools that stocked epinephrine injectors, so congress got in the middle of this, including a number of democrats, including senator bernie sanders and elizabeth warren saying we want them to do this but didn't think about the market effects. >> and now this is all part of presidential politics and you can imagine what's happening at mylan right now. they're hunkered down, they're in a room, they're reading the tweets doing everything except for what they should be doing which is meeting with patient
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advocates and coming up with the solution they can announce tomorrow. >> and her salary, the ceo's salary has gone up dramatically. >> the optics in every way are so bad. >> and they did an inversion last year as well. >> there you go. >> that's a triple whammy of negatives. >> paul, you're a so-called free market person, right? that's what you're being billed as in this discussion. so we were talking about -- >> so-called your name? >> we were talking to senator richard blumenthal yesterday and i essentially asked him how far do you go here. do you go across product portfolios of the various pharmaceutical companies and say you increased prices by this percent and therefore you're now under scrutiny. >> there are also a bunch of generic drugs and prices are so low dropped out of the market, they've taken advantage, found the drugs and jacked up the prices. because it takes years for that competitor to get back into the market. the issue is let's make it affordab affordable, efficient for those
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people to get to market, ensure there's lev competition in the field. >> how do you make it affordable and efficient? it costs a lot of money for r & d? >> it's not because prices are low, it's because generics have merged and we don't have enough competitors in the market. we do have an antitrust problem there. the bigger problem the overall drug market are the monopolies conferred by patents and ere exclusivities. it's not like that fell from the sky. they're responding to the industry lobby. >> what about the fda though? when it comes to the epipen in europe, said this last hour, where the regulatory burden is famously higher in so many ways, there are two other products on the market but they're not here in the united states. i've heard all your other complaints, but is there any burden to bear on the fda for getting faster and better at this so that way -- competition would solve all of this, do you acknowledge that? >> competition could solve it? >> yes. >> in general it should. the brand loyalty in this case makes it not 100% clear that
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competition -- >> no, no -- >> hold on. teva's product which was held up in fda approval process land would be the direct swap. it is the direct swap -- >> that's right. >> it's the direct swap product as opposed to the other versions that have been on the market and pulled for various reasons. this is a drug if that were passed -- i'm not saying it should or shouldn't, but if that were passed, that would be the direct swap and there would be instant competition. don't tell me mylan's going to still jack up the price by 400% plus in the face of a generic direct swap option on the market. >> i'm all about getting more competition in the pharmaceutical market. it's not a problem with the fda. teva didn't meet safety standards. >> the question is the fda too tough, too slow, too bureaucratic? >> no, not on generic -- no, the approvals for generics in brand names are pretty fast at fda. >> 48 months is fast? it went from 30 to 48 months. >> no, you're just making up the numbers. >> whoa, whoa, whoa --
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>> the fda approval -- >> that's from the senate. i'm quoting the senate's own numbers. 30 to 48 months. >> no, from time of development -- >> i have a link to the senate file myself. >> no, you're talking about from time of development. >> i just said 30 to 48 months and you said you're making up numbers. i try not to make up numbers. >> not while it's sitting at fda. >> the fda is sitting on a backlog of thousands of generic drug applications, that's a fact. >> what's the price for epipens in canada? >> price controls? let's bring up price controls in other countries. exactly, paul, this is another thing that makes me crazy. >> nobody is subsidizing here. only entity being subsidized is mylan. >> let's explain what we're talking about, paul, we're the only country where in the advanced economies of the world where we actually pay for r & d. all of these other advanced economies have price controls, which means wealthy people in japan, wealthy people in
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germany, very well off economies get very, very -- they don't pay their fair share of r & d. and we americans get stuck with the bill. why does our congress put up with this? why doesn't the wto deal with this? we wouldn't be having this conversation if those -- i don't understand poor countries getting cheap drugs, but why do rich countries think they deserve cheap drug sns. >> america has a defensive umbrella, we have an r & d umbrella. these other countries are lower than they would be if they paid their share. the question is why do we do that, we also get more new drugs faster than anywhere else. so we're all going to be patients some day, us or loved ones will be patients some day, that innovation we want to be there and as efficient and smooth as possible. the fda does a good job on the reviewing applications. the r & d process that has to change. >> robert, i'm not going to fight with you, but i'm going to throw out two more numbers. okay. 458 and 800, because that is what 19 other industrialized nations pay -- excuse me, 400, which is what the average prescription drug costs for a family are per year.
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and 858, which is the average prescription drug cost for united states family. why is it more than twice as expensive here than 19 other industrialized nations? >> now we're talking really about the brand name side. and the answer is because other countries do something about the monopolies. they give monopolies, but they also couple the monopolies with reasonable controls. they're being price gouged less. they're still paying too much, by the way. however, that's not really the story with the epipen. as you pointed out, this is an off patent product. mylan had nothing to do with the r & d around the epipen. the year over year price increases has nothing to do with covering r & d costs. their manufacturing costs aren't going up year over year. the only reason the price is going up is because they can get away with doing it. >> and they know -- >> other countries say, no, you can't, and they do better. and their patients do better. >> go ahead, finish your thought. >> okay. so teva is coming on the market next year, mylan taking price increases before competition
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coming on the market. everyone screaming about the price, two new competitors come to market, price drops by 50%. that's the bottom line, more competitors, prices come down. >> meg tirrell, you have a question. >> yeah, paul, earlier i think you were getting at potential new legislation that may speed up the generic approval process at the fda, though seems like maybe both you and robert agree that the fda's doing pretty well on generic approvals. i'm looking at the senate aging committee which has advocated creating a new generic priority review voucher that could be applied in these situations. is that the kind of thing we need here? doesn't that imply that the fda does need mechanisms to go faster in certain situations? >> absolutely. if you see a single source product put a priority review voucher in place so someone has incentive to get it out, in return a voucher for another generic product that can get a faster review there. that's clearly something they have to do. fda does have a backlog of thousands of generic drug applications. we can still do it faster. >> robert. >> yeah, speeding up generic
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approval at the fda as long as safety is not sacrificed is a good idea. but it is not the core of the problem. >> all right. guys, we're going to leave it there. thanks so much. paul howard and robert weissman. we should note that we have been showing shares of mylan and they are ticking to session lows right now down by almost 4% at this hour. >> i want to note that what i cited is from january 16th of this year -- january 28th from this year from le mar alexander, one of the chairman on the st y committee that studied -- click on the link, baby. >> absolutely. we should note senate judiciary committee chairman charles grassley joining us first on "power lunch" tomorrow. remember, he's asked mylan for an explanation for the epipen price hikes. he was out in the forefront, in fact. central bankers around the world gathering in jackson hole, wyoming this week, a major speech by fed chair janet yellen on friday. what clues will she give about a rate hike? ahead, plus, we're live china's
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welcome back to "power lunch." i'm michelle caruso-cabrera. on friday, janet yellen is set to speak at the annual jackson hole symposium, aka the biggest monetary policy event of the year. so of course our own steve liesman is there. steve, you've been looking at the results of the latest cnbc fed survey and i understand you are seeing a response that has
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never happened before when it comes to an election. >> yeah, that's right, michelle. things were getting strange and now our cnbc fed survey shows that our 39 respondents believe it's best for the economy if a democrat, aka hillary clinton, wins the election. if you look at the chart, clinton now leads on best for the economy 47 to 37 among the economists, fund managers and strategists who responded. and when you look back at the history, we've been asking this question since march, the republican has led by 20 points in general. so a huge reversal. then we ask who's got the best policies for the economy. it's a little bit closer there, but you can see clinton has made tremendous strides. this coming of course after that disastrous week that donald trump had in which even many republicans were critical of his remarks. and that seemed to have turned the tide among some of these wall street participants. who's best for stock? clinton's led all along on that, but she increased her gain now,
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it's 47 to 32. then we drilled down into individual policies here. and it's a mixed bag. trump leads on taxes quite a bit, he came out with that varied supply side tax plan and we asked on a scale of zero to five, business regulations again trump leads, but on trade clinton holds a hefty lead in terms of the views of this group on trade policies. jobs are about tied. and budget deficits trump leads -- sorry, clinton leads. i think the reason for that whatever plans clinton's had, she's more or less come up with different taxes to pay for them whereas so far the scoring of donald trump's tax plans are largely unpaid for somewhere around $6 trillion or $7 trillion deficit. the election, guys, is just one of the uncertainties that kind of hang over this meeting. also questions about fed policy and other issues. and we're going to be able to talk to some of the key participants here. we'll be talking to esther
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george and robert kaplan among others, that will happen friday when janet yellen, the fed chair, give her keynote speech and that will be much watched by markets. michelle. >> thanks very much, steve. suzy, go ahead. >> steve, this is just such a surprising result given what's gone on in the past. i guess my question is do you think that the thing that's going on is the same sort of silicon valley effect that people can't bring themselves to say that they support donald trump and his policies and when you put this kind of survey to them they just can't admit that his policies would be the ones that would be good for the economy? do you think that plays into it at all? >> i don't, actually. i don't know. it's hard to get into people's heads, but look, this concept of either never trump or a donald trump presidency almost any case would be bad for the country or the economy. i think that's the idea that's filtering into wall street. you have to remember this group is highly and has been highly republican. when we asked this question in 2012, they preferred mitt romney
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5 to 2. this is incredible reversal. obviously not the same people but very close to the people we surveyed a month ago. and this change is dramatic. and i think they were very happy to say they could back a republican before. i think what happened in august was dramatic both in the general electorate and it was dramatic for this group on wall street. you also see the same results in the nape service. >> i wonder whether or not if he's republican, i wonder if they were so strongly support of romney, is part of it he's the republican but he's not going to act like one. >> could be. >> that could well be. i mean, it's not hard to be confused by the policies. but again, i would say before that week earlier this month they were happy to back him. they were fine with him. certainly you could say that no matter what donald trump had in policies, hillary clinton's policies would be seen by this group to be worse and they'd
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support him just for that. but i think there's a tran sen dense here, a change among these people. >> steve, i need you to make a promise before i let you go. >> go ahead. >> the stock market has been massively boring for the last 30 days. give us some yellen news friday, can you guarantee it? >> i can't. what i can do is i'll do my best in the interviews i do, the ones i'm in control of, to try to tease out some sense of direction from the fed here. >> please. >> they're going to be debating the framework. and i got to tell you 60% of our respondents think the fed doesn't have a framework. there's a lot of confusion, a lot of frustration on wall street. and therefore a lot of volatility as well. >> hawks eat trout, doves do not. steve liesman, thank you very much. >> excellent point, brian. >> with that i retire. tonight cnbc premieres new primetime series "cleveland hustles," nba superstar and cleveland's favorite son once again, lebron james, gives four aspiring local entrepreneurs the chance to realize their dreams. so can dreams come true in
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cleveland? we're headed there live next.
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tonight at 10:00, cnbc's newest show "cleveland hustles" brought to you by us and lebron james. why cleveland though, besides
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the king, kate rogers is there and she'll tell us. kate. >> reporter: hey, brian. why cleveland? because the city is undergoing a revitalization, and start-ups here are cashing in. cleveland is where tom lix decided to launch cleveland whiskey in 2013. he's taken the distillery process from years to just days. and he actually considers himself a high-tech start-up because of the way he manufactures his product. >> the time to market is considerably faster than anybody else. we have a pressure aging technology that essentially squeezes the alcohol in and out of the porous structure of oak, of wood. traditional manufacturing can't keep up with demand. our technology allows us to do that. >> reporter: they're really scaling up quickly due to overseas demand for bourbon. cleveland whiskey's currently in 14 states and five different countries. they've also caught the attention of a local seed fund called jump start inc. that's invested around $35 million in more than 80 companies that have gone onto generate more than $2
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billion over the past tedecade. >> a decade ago places like cleveland didn't really fully understand the importance of small and medium sized companies. they maybe weren't fully appreciated or understood a decade ago, but now everyone really believes it's the future of our city's economy. >> reporter: and that's the whole point of "cleveland hustles," it's believing in the city and what they bring to the table. they're competing for mentorship, funding and the chance to open a retail store front in the newly revitalized gordon square arts district, another area in cleveland, guys, that's seen a revitalization and is up and coming. don't miss the show. back to you. >> kate, thank you. we will not. a series premiere of "cleveland hustles" tonight 10:00 p.m. pacific. very cool. michelle. a letter from a texas teacher to parents going viral after announcing, no more homework. is this teacher onto something? that debate next. ♪
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♪ for decades, investors have used a 60/40 stock and bond model, with little in alternatives. yet alternatives can tap opportunities that traditional assets can't. and even though they're called alternatives, they're actually designed to help meet very traditional goals. that's why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. translation? goodbye 60/40, hello 50/30/20.
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[text message alert rings] [texting keystrokes]
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hi everyone. i'm sue herera. here is your cnbc update at this hour. at least one student was killed, 14 wounded when gunmen attacked the american university of afghanistan? kabul. university president mark
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english telling the associated press that security forces arrived on the scene soon after that attack began. the state department has condemned the attack. a strong magnitude 6.2 quake striking central italy killing at least 120 people and injuring hundreds more. the italian hilltop town lay in rubble. most of the digging out of survivors has been conducted by inhabitants of the town because the remote city's roads are blocked. automatic braking systems showing up on increasing number of cars may not work quite the way drivers think. it says buyers don't know that some systems are designed to prevent accidents while others are only attempt to lessen the damage when a crash actually occurs. and astronomers have found an earth-like planet where life might exist practically next door to us, it's called proxima b. it's a mere 4.2 lightyears from
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earth or about 25 trillion miles. but it could be reachable by tiny unmanned space probes before the end of the century. that's the news update this hour. back to you guys, melissa. >> thank you, sue herera. let's take a check on the markets. doesn't look like much action here on the top line in terms of major averages. the dow is down by about 0.3%. s&p 500 the same, as for the sectors that are moving all ten are in the red. the biggest loser is health care. and we should note the big story this hour has been mylan, of course, and take a look at these shares because just in the past half hour or so they led to a new session low. take a look at mylan shares now, if we can, it's down by more than 4%. there we go. 4.8% here on the day. for the week, for the week it is down by 10.5% on this epipen controversy. >> but the whole sector is down, i've got 136 biotechs on a backset screen here sdpl that's why i mentioned health care down. >> 120 of the 136 are downright now. >> yes. let's take a check on oil. it is closing for the day.
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prices sinking on report in increase in supplies. wti down. brent down by almost 1%. rick santelli is tracking the action at the cme. rick. >> well, the compression in markets continues. intraday five-year shows not a lot of range, but a really good five-year note auction today. open the chart up, everybody's talking about how august is going nowhere fast. look at the five-year. look at the bund. there's one market though that's moving. it's the portuguese ten-year. that's a market that's trending. why? because you can only micromanage rates so long, rating agencies may change the game, in portugal. sully, back to you. >> rick, thank you very much. well, it seems students in one elementary school might not have to worry about their homework being eaten by the dog this year. why is that? because they no longer have any homework to do. brandy young, a texas
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schoolteacher, recently sent a letter home to parents explaining she has chosen to eliminate homework this year because, quote, research has been unable to prove that homework improves student performance. two questions, is she right? and where the heck was she when we were in fourth grade? are students better off without added stress? joining us to talk about this stephanie donaldson pressman, family dynamics researcher and author. >> hi. >> does homework do any good, stephny? >> it does especially in later grades. it helps children to develop time management skills, helps them to learn to take responsibility for what they control. and will help to augment what's going on in school in terms of cementing what they've learned. and younger grades, no, not very helpful. >> so you agree with this teacher? >> the thing to remember -- i think what this teacher has done is terrific in that it's focused the conversation. now people are talking about homework. and homework is a family issue.
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we know that in families where a parent doesn't have a college education or both parents are working and there are other c e caregivers that homework can actually have the effect of being discriminatory. it's unintentional discrimination, but it is discrimination. >> in what way? in what way? >> because parents without a college education may feel that they don't have the answers, they can't really help their children. they may assume that if children are being given homework that it's appropriate and kids need to be able to do it, which is often not true especially with some of the new curriculums coming out. and they may also be far more reticent to contact the school and say, hey, my kid can't do this, he doesn't understand it, so what's going on? especially and also with parents -- excuse me, with parents who have english as a second language, this is a real problem. because these parents very often are terribly uncomfortable in communicating with the school about their child's
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difficulties. >> then it reinforces the whole sort of cycle of poverty in some ways because then what happens you see the kids who have the educated parents good with computers come with these fabulous homework assignments with power point slides and the kids with parents who can't help them come in with something they did themselves. and then those kids with the educated parents get the good grades because they did spectacular homework assignments and end up getting into better colleges. >> there's two different issues. i don't doubt that's an issue, right? >> it is a socioeconomic issue. >> still, all things being equal, would it be good for children to do homework or not? now, there are other issues that need to be solved in different ways, saying don't do homework because certain poor children can't and therefore nobody else should. >> okay, i think there's another -- >> is a different question, right? >> but the bigger question to me is does homework teach you the right thing? >> that's where we're going. >> i think it teaches you all the wrong things. i think it teaches you if you do the assignment you're doing a
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good job -- >> melissa -- >> the homework -- [ overlapping speakers ] >> too much of a good thing, but i think homework is very important. i think it's important in terms of structuring your time. yes, you've got the piano lesson, field hockey practice, all these various teams and teaches you to budget your time and get something done. >> a lot of schools now, melissa, kids can't play sports because there's too much homework. >> but then you get to work and at work you're rewarded for overdelivering, turning things insideout, expanding an assignment, thinking of innovation, all homework teaches you to fill the time. you need homework as a parent you have to fill those hours, homework needs replaced by something, you can't have this void otherwise kids will get on computers -- >> that's exactly the point we make in the learning habit. the point we make in the learning habit is pointless -- >> should a teacher say no homework? or should a teacher say a lot of homework. why not when it calls for it
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give it and when it doesn't, don't. >> that's the school's perspective and the parents don't control that. what the parents control is what happens at home. and the homework we are talking about is the child's participation in extracurricular activities, in sports, and we have recommended that from the third grade on parents have a specified place for kids to do homework, they have a specified time for kids to do homework. this way kids learn they come home from school, they play, have their snack and go do their homework place. and they have ten minutes per grade that they do their homework. so if a kid's in the third grade, they have half an hour. they go to their place, organize their materials. maybe the child doesn't have homework. or maybe it takes them ten minutes. then they read. reading is the single most important thing that kids can do to achieve more academic success. we know from college counselors that other than finances the main reason that kids drop out of college, and they do, only about 40% of our kids now are
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going -- are dropping out of college between their freshman and sophomore year. excuse me. and they say this is because they lack time management skills. they can't focus. they can't prioritize. they don't have a good work ethic. >> tv producers telling we lack time management skills -- >> you have no idea what we're going through at the moment. >> thank you, stephanie. >> all get c-minuses in time management here. >> good to have you on. >> the learning habit takes the study and puts it into understandable terms. >> we'll look that up on amazon, thank you. or whatever platform you like. coming up here on cnbc's "power lunch," china's media giant spending big bucks to make their mark in hollywood. that story ahead. and we're all over this huge move lower in mylan's stock now lower by 5%. keeps going. session lows as political pressure rises on the company following its epipen price hike. mylan a top-ten weighted holding in biotech etf.
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it is falling in tandem. we're all over the fallout when "power lunch" returns. ♪ [announcer] is it a force of nature? or a sales event? the summer of audi sales event is here. get up to a $5,000 bonus on select audi models.
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we've been following the story closely. we're taking note of this stock move because it is close to session lows at this hour, it's down by more than 5%. over the past week it's lost more than 10% on the epipen pricing controversy. let's take a look at some of the other pharma companies that have been under fire for their own price hikes. it is down by about 2.8% at session lows, of course the concern here is that the senate is shining a bright light on a lot of these price increases and what will happen to these types of companies. so we are watching the sector very carefully. another big story hollywood suffering from box office blues here in the united states. so enter the chinese media giants. they've quietly been spending big bucks to assert themselves as a growing force. julia boorstin is in los angeles with that story. julia. >> reporter: hey, michelle. well, china's box office is poised to surpass that of the u.s. next year. and now chinese media giants want a piece of many of the hollywood companies that are making many of those movies.
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chairman wong gin telling lawyers he wants to buy one of the six biggest movie studios. while that would be a drawn out process, a co-financing deal or studio partnership could happen far more quickly. >> i do believe that the studios will listen to investment opportunities that will help facilitate their entry into the chinese market. to date while a certain number of hollywood big budget films make it into that market, it's still very difficult for them to really tap into that growth without having chinese ownership. >> reporter: now, sources tell us that wanda's been in talks with viacom for months about buying a stake in paramount and also bought a controlling stake in legendary entertainment in july, and wanda owns amc theaters. the film division co-producing the upcoming "the great wall" starring matt damon, and shanghai media group owns a fifth of shanghai disney.
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michelle, there's surely many more deals to come. >> this company has been incredibly aggressive already when we talk about wanda. julia, stay with us. let's bring in robert frank. the ceo, he's been so aggressive, bought carmike and odeon just about a month ago. >> yeah. >> when i interviewed him after he bought amc, he said he wanted to control 20% of all movie theater screens in the entire world. he seems willing to buy anything. and you've covered him from the angle of the wealth perspective. >> yeah, that's just the corporate side. so every wealth boom has its poster billionaire of overspending. and he's spent over $40 million in the art market for a monet and picasso. he bought sunseeker for over $1 billion. he bought the triathlon company. he's purchased an 80 million pound property in london, that's basically a fixer-upper gut renovation from the queen. so here's a guy who is basically the world is his shopping mall.
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and he's paying top, top dollar for everything. >> julia, in hollywood they're famous for using a phrase, dumb money. you know what that means, right? >> reporter: absolutely. >> historically it's not regions of the world, it's not certain nationalities, it's usually sectors that are hot and there's some new rich person that wants movie stars to come to their parties, right? i mean, is this the latest possibility of that kind of phenomenon? >> reporter: well, here's the thing that makes chinese investments a little different. if a chinese company were to buy a studio, or even just to invest in a slate of films in 10 or 12 films with one of the hollywood studios, then the chinese company could go through the process of trying to get these designated as chinese films. if the films were approved as being sort of native to china and not being from a -- you know, from the united states, if they would qualify as chinese films, then they would get better access in china. they could be distributed more
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broadly. there's still a limit on the number of u.s. films that can be distributed in china. so that would help give an in there. i think the issue here is that hollywood knows it really wants access to that chinese market. and china knows that if it invests in hollywood films, it will have a better chance making money on what's drawing so many audiences right now. >> but is he overpaying frequently when we see this? is he doing anything at any -- >> well, i think we'll have to see what kind of studio he invests in or whether it's a slate deal or whether he buys a studio. >> sure. >> but we'll see. >> all right. julia. >> michelle, one other point. there's government interest here in what he's doing, and there's a national interest in what he's doing. >> for sure. >> whereas the rest of wealth in china right now is being scorned by the government. >> thank you, robert. >> thanks. all right, on deck, a home improvement stock that could rally 20% from here. who is it? that and three other big calls in street talk next.
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in barclay's view is gross margins. sees hitting 12.7% in 2017 and that is down from more than 16 this year. >> which is an odd call. if your price target is $3 a share below where the stock is, shouldn't it be equal weight or a sell some. >> 25%. probably. >> maybe a sell. or underweight. well, whatever. number two, this is what we referenced in the teas. lowe's, bank of america, merrill lynch, their top idea list advise investors to take advantage of share weakness and buy the stock and remaining positive on sustained big ticket demand and supported macro trends. almost unprecedented on home depot. >> home depot results set the bar high for lowe's to come in
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and not meet and then sold off. >> orange is the new blue. >> more cautious on costco cutti cutting estimate on q 4 /* and specifically because of what it calls the highly competitive environment and shift to on-line the store that brian sullivan, you never entered. >> i have never been in a costco. >> i think that should be like our road trip. >> they just put one near my house. i shall go in to see what i'm missing. my parents love the store. walmart has attention for its turn around. stock up 13.5%. costco doubled that. stock's at 26% this year. maybe like football or sports. doesn't get any attention because it is based out of the pacific northwest, far from the media -- >> quite a theory. >> issaquah, washington. >> like microsoft. >> there you go. >> or amazon. just blew my own theory. scratch everything i just said. i'm just making numbers up.
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tpc, this is your -- >> i love you. >> i'm bitter. mkm partners upgrades from a buy to the neutral and the company will do better with money it is owed. it can repay debt. target goes to 28 from 23. that's about 15 to 16% upside on tpc. >> what a run up 57. %. >> hey, drive over the var zano bridge. you wonder who is running it. you see their company name above it. gold down more than 1% today. hitting its lowest level in near lay month. let's talk about gold. rgo future. geina sanchez. gina, your views on goal. >> more than a month, it's been since july. brexit went to the back burner quickly and we started to see good macro data and that
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potentially could up the possibility of a rate hike. those things are not in gold's favor. i think the gold market now, unlike the rest of the mark set pricing at a higher probability after rate hike. what you need to see gold to accelerate from here is extreme volatility. some kind of major event or something like that. and you know, we are just -- we could see it with politics. politics could bring the volatility in. for now gold is banking on continued macro data being good. >> okay. so phil do you agree with gina's thesis. basically janet yellen hates gold? >> no. >> if we have a rate hike or hawkish comments on friday, that would be negative for gold. >> yeah. i mean, if you're asking if it's done, i don't think so. but it is understanding that gold prices started climbing with the jackson hole meeting. it is widely expected janet yellen will lay out some time line for the next interest rate hike. but i think this mark set tech neckly driven. we are in a weak-trending
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market. trending at 1340. high position, traders nag nationally putting sell stops bewho that at 1340 and we saw a small washout occur. she will most likely disappoint and i think the focus will shift back to negative global interest rates, 12, you know, billion dollars, trading at negative rates here in government debt. so i think gold prices push back up from there. a trading range. >> look at charts gina says watch the fed. that's why we do it on trading nation. thank you both very much. for more trading nation, go to tradingnation at cnbc.com.
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experience more confidence regardless of the conditions. ♪ get great offers at the lexus golden opportunity sales event. get up to $5,000 customer cash on select 2016 models. ends september 5th. see your lexus dealer. they've got to do something fast. this is not going to get better, it will get worse. there couldn't be worse optics. there has never been case study right itself. the answer is to come up with a solution with the patient
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advocates and get out there. i mean, tomorrow the ceo, and actually have a solution and say we're going to fix this problem. we made a mistake. the stories got away from them and they have to reown the story. >> is the solution lowering the price? >> it has to be. do you say we defend our right to look like we are gouging? there is no way to win. >> i mean, i'm curious. because they are probably grappling with that. >> right. they probably are. >> can't go back to 57 bucks an injection. >> if they are grappling with anything now, it is finger-pointing who is to blame here. what is the solution? how early can we get on to present our solution to the world. >> what about the ceo's salary which has come under scrutiny. should she ever to give that up? >> everything comes under scrutiny. >> if they come out with a great solution we will lower the price, we are sorry about what we did and we will put systems in place to make sure that doesn't happen again, some of the stuff will go away. >> ultimately maybe it'll
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benefit the entire industry. they aren't the only ones to raise drug prices maybe someone will act to the point where the entire industry will have to act. >> that's a perfect solution. this is a systemic problem. and probably won't be solved on the crisis. >> thank you. loved it. >> thank you for watching "power lunch." "closing bell" starts right now. >> hi, everybody. and welcome to the "closing bell." i'm kelly evans. >> i'm mike santoli in for grif edge. >> and outrage over the hike is growing in washington and stock now down almost 5% today. white house democratic nominee hillary clinton and senate aging committee all weighing in on the eppi pen in the last

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