tv Squawk Box CNBC August 25, 2016 6:00am-9:01am EDT
now. goo good morning and welcome to "squawk box." u.s. equity futures at this hour have just gone lower after a negative day on wall street yesterday. if they opened right now, the s&p would open down just a point. the nasdaq down five points. overnight in asia, we are seeing global markets take a leg lower following what wall street did yesterday. the nikkei in japan down by a quarter of a percent. shanghai down .50%. hong kong a touch higher. we have movement among the currencies, but equities we are fractionally lower. all be it less than a percent.
germany, france, uk, italy, all slightly lower. take a look at crude, which has been negative for this week after a 9% rise last week. we have 14 sent cents higher. brent up. gas is just below 150. >> among today's top stories, we're not going to talk about business right now. the death toll reaching 247. rescue efforts continue there following a 6.2 magnitude earthquake that hit 100 northeast of rome. many survivors slept outside overnight for fear unstable buildings could collapse. back here in the u.s., cleanup efforts underway in indiana after tornados tore through yesterday. crews with the national weather service say winds meeched 165
miles per hour. closed streets to nonemergency vehicles and cell phone captured starbucks collapsing with people trapped inside. they managed to survive. we have weekly jobless claims. july durable goods orders comes out at 8:30 a.m. claims holds steady. that will be around 265,000. demand for durable goods forecast to rise. following a drop of 4% in june. as for earnings today, we have get met tronic reporting results. along with dollar general, dollar tree and testiiffany's. we are going to hear from game stop. we're going to hear from the ceo of mylan on the epipen debate. >> you saw on wednesday we're going to hear from hp and i've got it. >> you got it. >> also pvh. doing a lot of letters.
hp, third quarter profit and revenue beat forecast on a rebound and demand for notebook pcs. company fiscal fourth quarter outlook below assessments due to weak sales of printers as businesses cut costs. pvh is reporting better than expected growth. the clothing maker whose brand include calvin clien and tommy hill figger is raising guidance. i may need help with this one. you're not a millennial, but i figure you know what this company does. and we have kayla who can. >> who is good lg what this company does. >> are you? i'm not going to rely on you. i like how it's described. we're going to do some -- >> okay. that's not what i thought. it says -- okay. there it is. it's action based apparel.
action based. >> right. >> it's a combination of ath leisure wear. >> i like that. >> a combination of leisure wear and athletics. >> i want to see you in some still shots in an action pose -- have you ever seen -- >> the way the models act. like they're surprised to see someone or walking along. >> i thought the rio outfit in the photoshop was pretty awesome. >> that wasn't photoshoped. >> that was action apparel. maybe we have a shot of that. i didn't tell you about -- >> you can delete that imagine from the internet. >> you shouldn't have let it get there. remember john kerry. why did he ever -- >> i'm proud of my taekwondo
look. the photoed shopped image. >> chillies. i never heard of chitilly's. action focused retail reported better than expected second quarter earnings and same store sales. chain says back to school results have been mixed, but it is well positioned for the season. you won't do any of those. would you stand and pretend you're walking somewhere. you see a friend and wave and you really -- we can do it when becky is back. we'll do a full ad for jcpenny. >> and apparently three tilly's in long island. i'm going to have to do store locator. >> i can't rely on you. >> it's a small cap stock. >> you watched the olympics didn't you? >> yes. >> apparently a lot of
millennials did watch the olympics. >> saw it on snapchat too. >> i missed it. >> it was nice to have something to feel good about for a couple of weeks. and nice to be a part of a country that takes home a lot of golds. that's something we take for granted. >> inequality of the medal, i feel guilty. taking home that. >> just like everything we do, we're consuming too much. americans should feel guilty. we live too well, consume too much, and win too many gold medals. >> we're going to go off. you want the athletes to pay taxes for medals. >> i know that. and they're worth a lot. i've seen both sides presented. not all of them get sponsorships. not all of them do well. i'm proud of them. any type of nationalism that's frowned upon these days, isn't
it? >> i'm looking at you. >> you're raising an eyebrow while you say that. let's move on to politics. donald trump turning the tables on hillary clinton calling her a bigot. tracie potts has the latest from washington. >> hillary clinton is a bigot who sees people of color only as votes, not as human beings worthy of a better future. >> reporter: donald trump going after the african-american and latino vote by claiming democrats have done little to improve the lives of minorities. clinton's response comes this afternoon in reno. she is expected to argue that trump is shifting republicans who are disturbing extremists views. >> someone who is very much peddling bigotry and prejudice and paranoia sglrl clinton
insists her meetings broke no laws or ethical rules. >> there's a lot of smoke and no fire. >> reporter: she called trump's shift on immigration desperate. now he's willing to work with immigrants who came here legally, but want to stay. >> my priors will never change. jobs, wages, and security for americans. >> his campaign says expect more details in the next two weeks. tracie potts, nbc news, washington. >> trump meets with latino and african-american leaders in new york today and hillary clinton will give a speech in reno at 3:00 p.m. eastern time. seres holding posting a loss of $2.03. a little better than expected. same store sales at sears stores
falling. you're looking at that stock, up in the premarket. in the meantime back to markets now. as the count down to janet yellen's speech on the state of the economy tomorrow, joining us now is damon, part folio manager at rockland trust. good morning to both of you. i'm going to break it out. have you read it yet this morning. >> yes, i have. >> you know what i'm going for. the federal reserve needs new thinking. he has made this argument before. we are now at a point where maybe we're supposed to listen or no? >> i think there's a lot there. and i think the idea that the fed needs new thinking is appropriate, but i think an issue. >> too hawkish. >> i think it's too critical of the fed in a world the fed has been challenged by a tough economic environment. challenged by a lack of partnership in the washington.
the fed has been delivering resu results. not necessarily the result we want, but moving in the right direction. there is some specific issues about how the fed is communicating with us right now. which is making it difficult to understand where policies are heading. >> to rather than telling me what you think they should do, tell me what you think they will do. >> first i don't they're going to tell us much over the weekend where policy is heading between now and the end of the year. this is going to be a meeting about how the policy framework needs to change. what the tools are. janet yellen is not going to want to use jackson hole to -- >> what actually happens this fall. >> i think most likely the fed feels less worry about growth. sees some sign inflation is picking up and feels comfortable to take the next step. we think it could happen in december. >> after the election.
>> after the election. >> do you think it's politically motivated at all. >> no in the sense of politics not driving it. i do think november meeting is a difficult meeting to take. november is a hard meeting to move. the movement is going to come in december. the rate hike. >> the he's right, what do you do about it? >> i would have to agree i really have a hard time thinking we could see a rate increase before the election. i would also have to say i put very long odds on a rate increase post election. i don't think the fed wants an inverted yield curve here and i think we need the pay attention to what's happening in japan with the japan central bank and the ecb. >> and therefore as an investor, you're supposed to do what? >> my expectation is rates are going to stay low here. that's going to be a good thing
for the s&p. you look at valuations. the s&p is close to 2200. if we get lower yields here and the dollar stays stable, oil stays, you know, close to the $50 range, we could have a pretty good market at the end of the year. >> talking about oil, how much is laying on your thought and what's going on. >> not weighing on -- >> go for it. we'll come back to bruce in a second. >> thank you. so, yeah, it's definitely weighing on my mind. there's a production is at pique right now. demand hasn't delivered. that's the wild card. we need to maintain oil if we want a strong recovery in earnings in the back half of the year. >> i think a couple of things here. first of all the drag from the energy sector has been pornts over the last year and that's fading. it's going to fade whether oil prices are $35 a barrel or $65 a
barrel. the drag on inflation which has been substantial from oil moving from 110 all the way down to the 20s is also fading. the move we see going back and forth between 35 and $65 a barrel is not telling us much about what the global economy is doing. there's a lot of volatility here around supply, around signals from the middle east as to whether an agreement is going to come to restrict oil production. that a lot is noise. oil having come down was a big inflationary drag. a big sector in the u.s. economy. we can see both drags fading right now. >> you see in the markets. it's been a tough week. what was a pretty good little stretch. how does this go on when people come back from vacation? what do you do over the next two weeks is the better way to put it? >> over the next two weeks, i think you need to pay attention to what yellen is going to say
tomorrow coming out of jackson hole, but then again, you need to focus on what the direction of policy with the ecb, but also the japan central bank as well. >> okay. we're going to leave it there. thanks, guys. >> thanks a lot. and quick programming note. don't want to miss this. interview with kansas city fed president today at 7:30 eastern time here on squawk. >> ester loretta. great name. >> strong name. >> you don't see that in the list. everybody is naming their kids this foo foo names. >> whatever happened to naming your kid janet. maybe that will come back. >> janet is good. ester. loretta. mylan. no, that's not a name. mylan pharmaceutical under fire for raising the price of epipen
more than 400% since 2007. references the lead editorial in the wall street journey. i finally read it. first i saw they were going to blame the government and regulators. i said, i'm interested in this. let me see how with can do this. the point their making you let a company get a complete mow notary publicly on something, and you don't greece for generic competition and what do you expect when one company controls a billion dollar market. what do you expect to happen? >> suddenly you're supposed to say i'm not going to maximize profits. there might be something to it. >> it's a point that's being heavily debated now. this artificial mow notary publicly created. didn't get through the fda.
the competitor from sanfy had problems and pulled it from the market last year. there is another version on the market called adren click. however, they were having supply issues as of the last quarter and it's not the exact same thing as the epipen so pharmacists can't swap it in automatically. that's what they were trying to accomplish. so yesterday just watching the attention on the epipen price increases. climbed over the last nine years to more than $600 here. mylan acquired it in 2007. so that's a 400% price increase over that time. this is now capturing the attention of a lot of folks in washington with yesterday's white house weighing in. listen to what josh earnest had to say. >> pharmaceutical companies that often try to portray themselves as the investors of life saving
medication often do real damage to their reputation by being greedy. and jacking up prices in a way that victimizes vulnerable americans. >> so this is in addition too many senators coming out asking for inquiries. including the senate aging committee. that really weighed on the stock yesterday. folks worried a hearing may be on the way putting mylan in the same camp as valeant. they reached out to every member of congress who sent us a letter and look forward to meeting with them and responding to questions as soon as possible. over the last couple of days we saw the attention turn to mylan crow heather bresch herself. a lot of focus on her salary increase, and, of course, her connection to congress and her father joe mansion. >> that's been an issue since
the emersion. >> that's right. every time people rediscover the connection to congress. her dad did makes comments. >> why do you think this is getting so much attention now. the price increases have been going on since 2007. why didn't people raise a fit for the first and second and third increases. >> if you look at the coverage of this, at least for the last year, since drug price increases have been such a topic, we've been writing about this. we've been talking about this, but it's back to school season now. nbc news wrote a big story last week and it started to snowball. when congress gets involved, that's the catalyst. >> if you ever have a system under capitalism where you as a company have to decide fairness, what is the fairly price for something, if you're a ma notary publicly, it all breaks down. greed in a normal system doesn't
really exist. going after the profit mode and taking care of your own self interest is offset by everyone else taking care of themselves. once it becomes a monopoly, is it greed or the way things work. what is a fair price? not what it costs to produce. it's $2. it's impossible to decide. unless you have other people making it. other peopling paying for production. whoever does it better. whoever has people that are more motivated. >> you want people to have monopoly. >> no, that's the whole key. that's why the present spokesman can come out and call it greed. >> you let the generic competition come in. the point the journal makes and they're classic in this. hillary clinton wants to give more power to a government that is already screwing up the markets by not allowing generic
competition. instead of giving more power to regulators, let the free markets work. let the free markets work. >> what about free borders, open trade? >> thank you. okay. mylan ceo will join us. that's what i'm going to do from now on. join us 8:30 a.m. eastern first on cnbc. >> before that, coming up, online education program, wants to take the stigma out of online college degrees by partnering with schools lake yale, syracuse, nyu. ceo joins us next. "squawk box" will be right back. to buy that tr
chip the ceo of. we talk about you guys like this is a brand new company, but you've been around for a few years. i'm wondering what you saw in the market that led you to say this is something we need to do. >> i cofounded the company in 2008. we were surprised the great schools were not online. the question was why was online education left to schools that most of us didn't attend. the question was if this is about institutional will. could you produce something that could be equal to the campus. we built a system that allows a free school like university of southern california or gorge town or yale to provide the seam quality education. so you're talking about small intimate weekly live classes with schools like you went to. >> thank you.
thank you. you're we' >> i might be the only mba student that did it during. you are currently taking the mba program. >> i'm almost done. >> i thought you meant your classes are participating orb being hosted. >> our program was the first sort of top 20 program to go online and do this. big risk at the time, but it's i've been a student in the program for a little under four years. >> when i took a class more than a decade ago. i don't know if it was your flat form or something independently hosted. did you fail out and need to take it over again. no. i also wanted to have an internship at the same time. how to you change that stig tma >> my single biggest change of ceo of the company is sort of
online education is where online dating was ten years ago. it's scandalous and squiggle ma attached to it. where today if you're not married that's how you find something and no stigma. over time you prove online education can be as good. across our portfolio, 83% retention rate. job placement in 80s low 90s. this is the same network you attended on campus and it's real. you're a trojan, a tar heel. >> what is the difference of retention online versus in person. what's the difference in cost. >> most of the outcome metrics are like the campus. if you think about it, going to a president of a great school, hi, we would like you to take the online students you've never had before and i'm going to help you find them and build a platform. >> and you're going to get a little tuition too.
>> we do. we share the tuition revenue. over a 10-15 year contractor, i share the tuition revenue. ultimately to your question, graduate education, we provide graduate education, not undergraduate. the largest cost is the job opportunity. picking up your life, quitting your job and moving. the question you ask yourself, if you really can become a tar heel or trojan, be part of that network, that's a big deal. >> is there one technology that has made this possible whether it's google hang outs or something else. >> it's our platform. we built the online campus. we have a great tech team. it's not just about the weekly live classes. people think of master of science at bank of amerierkley.
you wouldn't want to go to the midwife that delivered tyler chatwood virtual baby. we have 100 full-time people helping you find local placement to help you deliver the babies. you're not grandfather version of online education. >> it's fascinating. an important reminder of people who are going back to school to consider this. >> come on back. it's fascinating. can you create relationships and the network. >> that's a whole other subject. you are there physically. believe it or not. >> and go heels. >> coming up when we return, the fed effect on the markets. talk to mark grant from hill top securities about the fed message from jackson hole. as we head to break, take a look at s&p 500 winners and losers. back in a moment.
what if a company that didn't make cars made plastics that make them lighter? the lubricants that improved fuel economy. even technology to make engines more efficient. what company does all this? exxonmobil, that's who. we're working on all these things to make cars better and use less fuel. helping you save money and reduce emissions. and you thought we just made the gas.
welcome back to "squawk box" this morning. right here on cnbc first in business worldwide. take a look at u.s. equity futures this hour and what's been a pretty tough week. things are looking a little down this morning. open off about 15 points, nasdaq off five points. s&p 500 a little over a point. teeing up the stuff going on in europe. most of the markets have been down marginally as well.
we are one day away from janet yellen's speech in jackson hole. just one hour away from an interview. joining us now is mark grant. managing director. we haven't spoken in a while. i want to get your view on a few things. pretty anti-consensus a lot of the time. a lot of the time, the craziest stuff ends up happening, like brexit. i don't know how you knew about brexit. i was hopeful, but i didn't think -- i didn't know if it would happen. like rates, which every time they seem to go up on the ten-year, you say no, they're going back to -- i don't know, where are you? 1.25? you still think trump is going to win the presidency? you still think that? >> when you talk about the elections to someone in my position, it gets very dicey.
i think that the odds are, not because i'm in favor of him, i think this is going to be an election where people are going to vote against and consequently i think he has a slight neck n winning regardless of the polls. >> the symbolism of nigel farage traveling around or at least being on board, you couldn't help, but notice that sort of something that is not just happening in these boards, but the anti-globalism push in the reassertion of nationalism. let me get to the next thing. there's no -- vix is like you could have bought that and it's like watching paint dry at this point. or watching grass dry or paint grow. at this point, is all the central bank intervention, i was likening it to anesthesia.
you don't really feel anything. it's like the dentist, you don't feel it until the novocain waeas off. and i don't know what he did, but i need tylenol or something. are we being lulled? the dog days of august is that the reason or central banks causing things to go where they would not normally go. >> joe, you're last sentence was the exact right emphasis on these markets. we have about $220 billion a month, that's every month, coming out of the japanese and european central banks. we have the fed holding inventory of around $4 trillion. and what we really have unlike all the decades that i've been on wall street up until the last one, we have central banks that influence the markets and now they are controlling the markets. both the bond and the equity
markets, which is why i call our current environment wonderer land because that's exactly where i think we are, in some kind of space that no one has been in before. we went down the rabbit hole. >> is the fed the dog or is it the tail? most people think the global economy, you know, the summer savings, the lack of demand, the abundance of supply, that central bankers all they're doing is responding to the overall malaise that we're seeing and they're not causing it. they're just responding to it. >> i don't buy that argument, joe. i think in the beginning after the financial crisis of 2008 and 2009, all the central banks in tandem by the way responded to try to clarify and get us out of that situation. now, eight years later, i think what's happening is that the debt that has been issued by the european countries, by japan has
caused the central banks there to step into the market in ways they've never done before. we now have $13.7 trillion in negative interest rates bonds across the world, according to fitch. the fed is just standing pat, but a tremendous amount of the money, joe, from europe and asia is rolling into the american markets because america is the only man left. the only man standing that has positive yields. >> so which markets that people are invested in are over valued and what is the most overvalued and are there any markets where this dislocation from the fed where it causes them to be undervalued? >> well, interestingly enough, if you look at the corporate market in the united states, corporate bonds, mortgage bonds in the united states, they've tightened the treasuries over the last month about 20 basis
points, but i still think there's good values there. >> okay. >> treasuries is compared to the bonds in europe or the bonds in asia. they're still decedent value in our treasury market because it's the only place left with any positive yield. the equity market is very stretched. we've had two years now of earnings decline. we have pe multiples that are within very small space of all-time highs and i understand the reason for this. the reason is this tremendous amount of capital of money that's pouring into the all the world's markets which is like a hope floats. it's a lot of hope and it's floating. >> i mean, i think it's interesting you said -- i mean you made the case for the entire globe being in a bond market bubble. just because our yields are a little bit higher, you still think that's ta place to invest.
you have a completely artificial bond market bubble, but you're still ready to buy our bonds. even though it's a bubble. i don't see why you don't think since or economy is going a little faster, why don't you think even the stock markets around the world are overvalued, we've still got the best one. got the one with the best economy. why not buy stocks and bonds then. >> well, joe, i think that what you're saying correct. we did have the best equity market. certainly in my opinion the safest equity market right now. i just think that interest rates are so low, joe, that we're not even coming close though the inflation rate in the ten-year treasury, much less in the 5-year treasury. you're slowly losing money because of the overall inflation rate. however, i'm a big fan, as i said to you before, if you know what you're doing, you can get 10% on your money. i think for individuals, you buy
corporate bonds, you take half your money and buy closed end bond funds. you have return of around 7% lended and i'll take that every day. that's what i tell people they should be doing with their money these days. individuals. >> all right. where's davie? >> west of fort lauderdale. >> okay. you've got like off on or something? is it moving up that way? are you worried? >> no. i'm not worried about anything. i'm charging ahead. >> all right. not yet to fort lauderdale. just parts of miami, is the all right. you can always come up here. we've got other things up here. anyway, thanks. >> thank you, joe. i appreciate it my friend. >> coming up on "squawk box," amazon taking a new approach to the grocery business. details up next. as we head to break, quick check
earnings from tiffany's just crossing the tape. company reporting non-gap earnings of .86 a share. revenue of $932 million was a little short of consensus. comps sales were down 8%. in the former ceo of converse technology, pleading guilty to securities fraud. the news comes almost ten years exactly after jacob alexander, also known as kobe, moved to africa in what the government says was an attempt to flee prosecution. judge denying him bail. he will be sent to a maximum security prison until his sentencing in september when he faces up to ten years in prison. ross agreed to pay $2.3
million. settles charges not properly disclosed some of the fees it charged investors. latest in the strength of steps taken by the fcc. looks to crackdown collection of fees. >> amazon may be looking to step up grocery game. e-commerce giant already has amazon fresh, but it may now move to new territory, drive up grocery hub. planning documents and local news outlets three possible locations for the click and collect site. california, seattle, having consumers pick up their own groceries would eliminate the need to deliver. maybe it will be different with food. >> appealing. you click everything you need you click then you drive and put
it in. >> walmart has something like that. >> that's appealing. i'm there every day. i go into a super market every day. sometimes twice a day. i never, ever get one of those carts. do you do that? now that the baskets are. >> i may even get two baskets. if you want to get in and out if you try to go through with one of those carts. it's impossible. traffic jams. people stand there. and it's all -- just take one. would you. can't get by. you don't do that. does he get a cart? >> i don't know what he does when he goes in there. >> it's a little bit like -- do you remember when george bush the original went in and didn't know what to do with the scanner. >> sort of like my experience. >> to you do self checkout. >> that is totally -- i have because there's been no other way to. >> to get out of there.
it's hard. >> you try to do the box tissue. >> those people that do know how to do it, you have to know where the bar code is. >> i'm surprised there's not more theft as a result of that or they're not capturing enough. >> why not go and sort of put it in there and oh, did it not, sorry, did it not. >> we saw, it's a great -- i would just think if people scanning their own stuff. you can scan your own stuff at the apple store. you know what that would result in retail, the dreaded shrinkage. >> yes, the dreaded shrankage. >> coming up when we return, driverless taxis hitting the road in singapore today. the company responsible isn't google or uber. it's a three-year-old launch
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you shouldn't necessarily be alarmed if you see cars cruising the roads missing a key component and that would be the driver. but citizens of singapore is going to get a taste of this. joining us is the ceo of the software company trying to solve the driverless problem with a test run that begins today. carl, thanks for joining us this morning. help us. how is your technology just so we understand it different than what the folks at google are doing or what the folks at uber are doing? >> well, the basic idea is the same. we want to take the driver out of the system. and by doing that we're going to radically adjust the service of the taxi service. these robotaxi services will promise to be 30% to 60% cheaper than a manned taxi service. we've got a unique approach based on the work me and my cofounder and a lot of our
employees have been doing at top flight schools around the world. >> so there will be no driver, no backup system. i know uber is going to start in the united states doing some testing, but of course they're going to have drivers there as a backup. in this case, literally, utterly driverless. >> we'll have a safety driver in the car. that will be an engineer who's going to monitor the system, keep track of the operation, and make sure he's available to, you know, ask questions from the rider. but also, you know, intervene to ensure the comfort and safety of the passenger. >> and will these cars go everywhere within singapore or only along certain routes? >> so we're starting in a part of singapore called one north. it's a business district. that's the geography that we've been allowed to conduct this pilot in. we hope to be expanding further out from there. >> and it's all -- all of the technology is within the car. there's been a big conversation about whether ultimately for these to work en masse they're
going to need some kind of infrastructure spending to building technology just in the vehicle itself but beyond in the roads. >> yeah. we're big believers that you don't want to have to rely on external infrastructure. we want to control our own destiny. we don't want to be beholden to, you know, budget dare constraints of certain states or governments. so all of our technology is independent of anything on the road. the car has sensors, it has computational resources on it. and using all the information it gathers by itself, it's able to navigate safely, you know, through the roads of singapore. >> karl, how do you think about your company and its ability to compete with what i imagine are much deeper pocketed businesses like didi that's trying to do this. they're in asia already. uber is trying to figure this out. google is trying -- there's a lot of people now competing in this space. >> yeah. and they're competing in the space because it's a huge opportunity. it's a global multi-trillion-dollar
opportunity. but the good news is also a technically hard problem. i've been in this space my entire career. before i formed nutonomy, we did the same. the technology we're bringing to the space is robotics technology. what we're finding is the ability to collect the right group of people that have this highly specialized domain knowledge. there's just not a whole lot of teams worldwide that can do that. uber, google, they put together great teams but i wouldn't trade my team for any of those. the proof is in the pudding. we're confident enough in our software that we're putting it on the road today. >> real quick before we go, long-term for your business, do you plan to offer your software to lots of different either automotive companies or taxi companies or do you see yourself getting acquired by an automobile company? what's the long-term play for you? >> huge number of opportunities to go to market. you know, right now we're
focused on developing the software. we're convinced if we can have a high robust piece of software, we'll create some immensely valuable. >> we look forward to seeing your progress, karl. exciting stuff. thank you. >> thanks. coming up, esther george convening the meeting of fed officials in jackson city. she spoke to steve leisman about the economy and the prospect for rate hikes. that interview is coming up. and then at 8:30 a.m. eastern, mylan ceo heather bresch will join us to talk about the epi-pen controversy. w. your analysis of social media and conversations on various trading floors, helps us uncover insights. insights that help investors predict market closes, well before markets close. you know, your analysis has helped us improve our predictive accuracy by over 500%.
550.2, to be precise, but we can always do better. i like your attitude watson. 550.2, to be precise, but we can always do better. 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.
oil, biotech, and the fed in focus for investors. what you need to be watching ahead of tomorrow's big central bank meeting. and maybe some advice on where to put your money to work. jim paulsen joins us with his latest forecast. is there another earth? >> let's say we actually do land on this. what's it going to be like up there? >> unpredictable gravitational conditions. >> okay, so the scariest environment imaginable. >> astronomers make a discovery and it's only four light years away. we ask if proxima-b could be hospitable to life. could flying piz szas mean e end of the delivery guy? we'll explore as the second hour of "squawk box" begin right now. live from the beating heart of business, new york city, this is "squawk box."
>> you don't tell me things. welcome back to "squawk box." you don't. here on cnbc. you tell other people. it's first in business worldwide. i'm joe kernen along with kayla tausche and the very private andrew ross sorkin who i find out about things -- anyway. the futures at this hour are down 24 points. that's where they'd open right now with the dow. it has been -- the gains it seemed so easy a couple weeks ago have got harder and harder since the fed said september's back in play. it's all red this morning. 2.5 points indicated lower on the s&p. and the nasdaq looking to be down seven. hillary clinton now calling on mylan to voluntarily drop the price of its epi-pen drug.
mylan has been over scrutiny for hiking the price of the allergy treatment by nearly 400%. democratic presidential candidate tweeting there's no justification for raising the price on that life-saving medicine. at 8:30 a.m. eastern time, a first on cnbc interview, mylan ceo heather bresch is going to be joining us. meg tirrell joins us with more on this story. >> actually breaking news out of mylan. they are responding to the pricing pressure saying they're taking immediate action. introducing some measures including doubling the eligibility for patient assistance. they also say they're going to cover up to $300 of out of pocket cost at the pharmacy reducing patient cost for folks who'd have to pay full price 50% off the list price. they also say they're going to open up a pathway to provide it directly to patients. they're also putting out a graph
here of what they call the entire economic story of the u.s. pharmaceutical supply chain. breaking down what they say is the middle men chunk of what actually is taken out of the list price of the epi-pen. we'll have more on this at 7:30. >> let's get the insurance companies to pay for it. there's going to be, like, one left that's covered under the exchanges. eventually we'll get them. whoever that is to pay for it. but that doesn't really address things. does it? it's like the senators for medicaid and medicare. when you get reimbursements for something that is so expensive, just -- this isn't a case where it's medicare or medicaid. but just passing it off on a government agency doesn't help us, does it? for health care? >> what do you mean passing it off? >> instead of saying we're going to stick it to the insurance. >> chance anyone else comes up with a epi-pen competitor? >> they got them.
they can't get regulatory approval. >> so they came out with the rejection from the fda that it would be 2017 until they're able to come back. they're the most advanced. i think the controversy will drive more people. >> so don't get stung by a bee until 2017. >> fingers crossed. >> then from a price perspective, would it go? >> that's a good question. i've look at analyst notes. typically when there's a generic, you could go down up to 90%. >> how big a piece of mylan's business does this represent? >> it's about 20% of profits. it's more than a billion dollars of their $9.5 billion of revenue. but analysts make the case this was expected to already be a shrinking part of mylan's business and this shouldn't be a big push on their stock. >> what did -- what was that in "pulp fiction" when they did
that? do you remember? and she sits up. >> would you guess it was adrenaline? what else could it be? >> remember travolta draws -- it's adrenaline that you shoot directly into the heart. and epinephrine is adrenaline. >> but you don't go straight to -- >> no, no, no. don't try that. >> wasn't that because of an overdose? >> it was. >> that's the thing that cops carry. >> i don't think they had that when the movie was made. >> we're going to get to the bottom of that. that was the scene everyone remembers. >> i remember that scene very well. >> thank you. and of course we're going to have heather bresch the ceo of mylan at 8:30 a.m. today to ask her these questions as well. hp's third quarter profit and revenue beat forecasts on a rebound in demand for notebook pc's. the company's fiscal fourth quarter outlook is below estimates due to weak sales of printers as business customers cut costs across several
industries. revenue there down about 14%. and the former ceo of converse technology pleading guilty to securities fraud. the news comes almost exactly ten years after jacob alexander also known as kobi moved to africa in what the government says was an attempt to flee prosecution. the judge denying him bail. he'll be send to a maximum security prison until his sentencing in september. all eyes on janet yellen's speech in jackson hole tomorrow. joining us now is jim paulsen, chief investment strategist at wells capital magt. and michael hanson here on set from bank of america merrill lynch. jim, we'll start with you. it seems we've got a lot of job owning from the fed. but i wonder if you think that in some part is necessary because they need to get people
reallocated so that a rate hike doesn't catch them by surprise whether it's in september or more likely in december. >> well, i think that's part of their m.o. they start to telegraph what they're going to do before they do it. they've certainly been doing that. which is also why the market has brought back into play the possibility at least of a september hike. but, you know, i can't imagine any investor being caught off guard by them having to raise interest rates here. the data's been a fair amount better. it looks like gdp numbers are now 6.5% for the current quarter. it certainly looks like if they don't do it in september, they'll do it in december. i think there will be volatility when they do it. but i also think it might help the stock market and investor confidence if they start to normalize monetary policy. i think it's becoming one of the
biggest investment fears is policy officials overstaying and overdoing this policy. >> michael dwob you agree with that? that a rate hike would be good for equities to get back to somewhat more normal monetary policy? >> i think over the long run, the point that's made that you get volatility is right as well. i think the market right now is expecting the fed to continue to provide support. the question is not so much the next rate hike, what the path is going to be going forward. fixed income investors are convinced the fed is not going to be hiking very much. >> is there a possibility we get the best of both worlds? that the fed does begin hiking so you get this move toward normalization. but because there's so little yield elsewhere, people pile into the treasury market here. so you have cheap mortgages, cheap corporate borrowing, all the while your credit cards and prime rate based stuff is going up. >> you could see a lot of that. i argue a lot of the treasury
yield is driven by what central banks are doing. we've got a whole bunch meeting in september. not just the fed. most of them are going to be in easing mode. that's going to help keep treasury rates low. >> what about this op-ed about the fed's policies being unreliable. the policies being erratic, the models unreliable, and they need to become more relevant again? >> well, i don't disagree with that. i think we've taken monetary policy into some brand new place. i guess i thought it would always return at some point. it just continues not to. we are so far away from any definition of crisis that we've got a policy today not only here but now globally which is more aggressive than it's ever been, perhaps, in this recovery. and just the disconnect is unbelievable. we're back to full employment under 5%. we've got the highest core inflation rate, the highest wage inflation rate of the recovery.
and we've got a federal reserve that's agonizing whether a quarter point lift from half to three-quarters is somehow a difficult decision. i do believe that investors and private sector players are one of the biggest concerns as the how far out of whack monetary policy is. and if we start to normalize that, i think animal spirit behaviors and confidence will improve. and they will do more good by raising rates than bad. >> jim whab do you -- so the markets obviously have been selling off this week i think in large part because people are scared about something that's going to come out of what's going on in jackson hole. how do you play it given what you just said? >> you know, andrew, i think they haven't sold off that much. you know, and i wouldn't think that if the fed does get more hawkish, again, that would be super surprising to anyone. markets have held up here pretty well. the thing i like about this
rally and why with i think it might have further to go is there's just no checks that have cropped up. a rally of this magnitude since february not only here but across the globe in stocks, normally you'd have rate backups. we have rates that have gone down here. we had the dollar go up. we've had the dollar go down. you might have liquidity conditions. you might have corporate credit spread start to widen as the rally progresses. we've had them tighten. there's just no check or hurdle forming for the stock market. and i think that's why we're probably going to go higher whether or not the fed is going to raise rates. >> michael, we'll give you the last word here. there do seem to be very few alternatives to u.s. equities especially if you're looking for a yield. that's why we've seen people pile into the dividend stocks. >> given that you have central bankers around the world more aggressively easy than the fed. and you've got 13.-whatever
trillion of negative yielding assets into u.s. equities. i don't think a 25 basis point raise makes that or breaks that. >> great to see you both. donald trump escalating his attacks on hillary clinton. he's previously called for a rejection of clinton's -- in his words -- bigotry. but last night in jackson, mississippi, he stepped up the rhetoric. >> hillary clinton is a bigot who sees people of color only as votes, not as human beings worthy of a better future. >> and hillary clinton responded last night on cnn. >> donald trump has shown us who he is. and we ought to believe him. he is taking a hate movement mainstream. he's brought it into his campaign. he's bringing it to our communities and our country.
someone who's questioned the citizenship of the first african-american president, who has courted white supremacists, who's been sued for housing discrimination against communities of color. >> and clinton's said to have more to say about trump's comments today at a speech in reno, nevada. >> and trump getting a boost from a brexit leader nigel farage, the former leader of the uk independence party. he joined trump on stage at a rally last night in mississippi. he went after president obama for urging british voters to remain in the eu and because of that, he went and directly endorsed trump in an effort to avoid what he called meddling u.s. affairs. farage did say if he was an american citizen, he wouldn't pay hillary if she paid him. of course he's standing behind a
big trump sign. so. >> right. >> for what it's worth. >> she doesn't pay people to do things. it's sort of a -- right? it's kind of like one of those -- >> there were some critical articles suggesting that she gives contributions to her own foundation and people thought that that was somehow a problem. >> no, no. the people that give the foundation money pay for speeches for hillary. >> that too. >> but, you know, as far as money going one way. you know when you leave a rent-a-car place. you can go over those things. but if you back up, that's sort of -- you know what i mean? >> the spikes. >> the money's not going this way from hillary. when we return on "squawk box," rescue efforts continue in italy. we'll head to the region for an update. check out shares of mylan. the stock is up this morning nearly 4% on news that the company will cover up to $300 of out of pocket expenses at
. welcome back to "squawk box." a tough morning in indiana where tornadoes that touched down in the center of the state tore off roofs of apartment buildings and cut off power. it did not cause serious injuries. the tornado did, however, do a number on this starbucks. video and pictures of the coffee chain's location flattening are going viral this morning. that is an incredible image. but we're glad to hear that people are okay. and in a similar vein but this is different, 247 people confirmed dead in italy following a 6.2 magnitude earthquake that hit central italy about a hundred miles northeast of rome. we're joined now with more. lucy? >> reporter: sorry, guys.
i'm having some audio issues but if you can hear me we're standing now on day two of the search and rescue effort here in amatrice. you can see the remains of a building crushed behind me. one's a normal home now reduced to rubble of sand and dust and rocks. there is not a lot of hope here but rescuers are trying to get to anyone who might be trapped beneath those rocks. just a few feet down the road from me excavators are busy digging through trying to get to anyone who might still be alive. the death toll dramatically increasing overnight. that is because rescuers didn't stop working. they've been pulling bodies out left and right. and still miraculous moments. yesterday we saw a young 10-year-old girl pulled from the rubble still alive after 17 hours of being trapped there. one of the big dangers, of course, is that the structures here are not even safe for the rescue workers. there have been many aftershocks.
more than 460 of them since that quake erupted. and rescue workers are racing against the clock to get out of here to get those who are still alive before it becomes too dangerous and too late. joe? >> lucy, thank you. that's tough. i think we've all been to italy. it's so -- the buildings in some parts of italy are -- don't look particularly ready for things like this. >> although it was interesting because she had reported that there is a known faultline there and there have been earthquakes before and so there are going to be questions over why those buildings and structures weren't reinforced going into this. >> but we have no conception of things like that. they said one thing that's standing is i think 13th century clock tower. which is -- that's in the 1200s, right? >> yeah. >> we have -- i don't think of anything in this -- we may have
things or something. but anywhere over here, hard to find anything close to -- structures going back then. coming up, a couple of major retailers reporting earlier this morning. we're going to run through the numbers for tiffany's and dollar general. and later is there a second earth? i can tell you there are an infinite number of second earths. but we found one close enough to look at. astronomers making a new discovery and it's only 4.2 light years away from our solar system. so if you can get up to 186,000 miles per second, you can get there in four years. details with those findings and what it could mean for space exploration. then at 8:30, a first on cnbc interview with mylan ceo. "squawk box" will be right back.
welcome back to "squawk box." a couple of big retailers reporting this morning from luxury retailers to the dollar store. courtney reagan joins us with more. >> tiffany comes out. it's a beat on the bottom line. light on revenues. $932 million. and an 8% drop in worldwide comp sales nap is a touch lower than what they were expecting.
the iconic jeweler lowers its guidance. markets did improve thanks to the retailers ability to charge some higher prices. but still sales disappoint. america's comp down 9%. that's still the most significant region. europe by the weakest down 17% for the comp sales. japan continues to be the out-performer. but remember the strengthening yen does play a role over there. tiffany's ceo calls the global environment challenging and sees broad effects on shoppers in the big key cities as we've been seeing with others and chinese tourists particularly that group spending a little weaker than expected or hoped for. a different retailer, though, struggling for different reasons also out with results. sears posting another loss. $2.03 per share on another quarter of comp declines. sears down more than 7%. sears had been operating at a
loss since 2010. last year lost more than a billion dollars. it owes more than its retail operations generate. it's been selling stores and assets to generate cash. since 2005 its door count has gone to 1600 now. negative every quarter. and the ceo has kept them afloat by doing the financial engineering. he sells off assets like real estates and brands. when cash is running low, his hedge fund basically loans it to his retailer. it's a very complicated scenario at sears and that continues. >> crazy story. i don't understand. >> nobody understands. only one analysts still covers sears because it's like hands up in the air. what's going on there? >> i forgot that we covered sears. >> we hardly do because it's so complicated and it's hard to get smart folks to dig into the financials because they're so complicated. it's not worth it, basically.
the float is so small because eddie lampert owns the vast majority of shares. there's not much -- >> it always looks bad but they're doing well for themselves. that's the part i can't -- >> yes. the value of the real estate is there. the retail operations, not so great. what's going on in the stores isn't great. >> thank you for this. another story that's a little complicated but we're going to talk about it coming up, mylan feeling political pressure this morning other the decision to raise the price of the epi-pen. mylan's ceo is going to join us on cnbc to answer them. up next, the super bowl for central banks. investors will be listening to yellen's speech tomorrow. a preview of what to expect ahead. and as we head to break, look at u.s. equity futures. ♪
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weekly jobless claims of july, coming out at 8:30 eastern time. claims expected to hold steady around 265,000 mark. and durable goods to rise more than 3% in july after a drop in june. on the earnings front, pvh earning better than expected in the second quarter. now, the clothing maker whose brands include calvin klein and tommy hilfiger. >> you have to go where the consumer is. stores are not going away. last time i was on here, we spoke about the fact that there's too many stores in the united states. so macy's to their credit stood up and said we need to close a hundred stores. it represented to them only about a billion dollars worth of sales. but, you know, that will create bottom line opportunity. those were not our most profitable locations or theirs.
>> turning now to the fed, our own steve leisman spoke to esther george ahead of the symposium. he began by asking about the need to clarify the fed's framework for monetary policy. >> so i think it's been a long time since we've used conventional monetary policy in a way the public understands. the short end of the curve. but given where we are eight years later, we see one can benefit from we're talking about. >> respondents also thought the fed is more likely to be basing policy on the latest economic data rather than the medium term forecast. is that true? >> well, policy makers are bound to look at a medium term forecast. and we do that on the committee. there have been data points that have caused the committee pause. and so i understand why it looks like short-term focus has begun
to take more precedent. people are focused on things like jobs numbers to understand how they move those medium term forecasts. >> it's been sort of a rough first half at least if you look at the gdp numbers. does that accurately describe the economy right now? >> the economy did move slower during the first quarter and through the first half of the year, but it looks like the consumer is continuing to spend. so i think there's every reason to think we could see a 2% economy for this year as a whole. >> as a whole. which means we've got to do better in the second half snap your forecast? >> i think we could. again, steve, there are things that show up in the data that have not been part of our forecast. things that have happened globally. things that have happened with jobs numbers that were surprising. whether we can get that kind of lift in the second half of the year, we'll have to see.
>> at the same time the gdp numbers have been weak, the jobs numbers have been stronger. which tells the real story to you? >> so i think they're both telling us something. the jobs numbers are telling us that people are coming back to work. we are beginning to see wage growth in a way that suggests that the consumer is going to be in a good position to spend. >> are there specific areas -- and i know you've talked a lot about the possibility of imbalances -- when you look at markets, the specific areas you're worried about. >> i think all of those have shown some characteristics, valuation pressures, commercial real estate certainly we look at. i think you saw this in the oil sector which was sensitive to these low interest rates in terms of the money that came into that. i think, though, one of the things i'm reminded is often seeing these things show up means it's too late. >> so am i right in thinking that you're among the people who
believe that the next best move is for the fed to raise rates and do it sooner rather than later? >> you've seen in terms of how identify expressed my views on the committee, i do think it is time to move that rate. that doesn't mean i favor high rates. it doesn't mean i think that needs to happen rapidly. i agree that a gradual move in these rates. but under cdi remove some of th accommodation. >> many people ask if the coming presidential election is something that would influence the fed. >> i think it should not. keeping focused on the real economy is the job of the independent central bank. >> we're now joined by steve leisman who's out there. we called it the super bowl for economists. how are you? >> we keep looking for a name to jazz it up. they're going to do a lot of academic discussion. something that is out there which is how to make a better
way to make policy rather than seemingly jumping from jobs report to jobs report. i don't know if you read kevin warsh in the journal this morning. very harsh criticism of his colleagues. he talked about the way they're making policy right now. just one quick word. esther george said the presidential election should not affect how the fed makes policy and also said there's no particular reason why this particular election should cause more economic uncertainty than other elections, andrew. >> that flies directly in the face of what i think you're thinking, steve. no, i -- couldn't get him to laugh. >> i want to correct you on that. i want to correct you. that's what i've been reporting. >> i just mean personally in terms of what's at stake here. >> you don't know what i think personally, joe. >> what's funny is she was talking about no we never -- after the election we'd never do anything based on policy.
of course not. all the stuff they're going to do is before the election in influencing it. i mean, they're going to, you know, not raise and make it easier to keep the status. no one's saying they're going to do anything afterwards. it's what they're going to do before. >> i mean, i suppose so. you know, the trouble with -- you read kevin this morning, right, joe? >> right. that's sort of the same stuff he's been saying for awhile. >> yeah. but here's the thing. read kevin. he's a great writer. wonderful rhetoric in the way he writes. but he gets to the point where everybody is. consternation with the current policy with no particular suggestion about how to change it. you know, you had ed lazear on yesterday. and ed talked about the idea, well, it's a little unfair to blame the fed for being inconsistent because the data's been inconsistent. they've not had a consistent set of data to aim a consistent policy at. kevin is very eloquent in saying here's what's wrong.
>> but in particular -- steve -- but it's a chicken and egg thing still, steve. that's where the argument comes in. is the fed responding to what's happening or somewhat responsible for what's happening? jim paulsen just said get a couple of rate increases and that will bolster people's confidence that things are going to eventually get back to normal and maybe we cut down on all this buybacks and financial engineering and we make some long-term investments and equipment instead of just playing around with all of the free money they keep handing to us around the world. >> i just -- joe, we get back to the same place. i guess people are probably tired of it. you're the one who said we've done all this talking about the fed. i thought that was pretty clever. >> and here we are. spending cnbc's money. going out there to listen to the unbelievable amount of detail you're going to hear about whether or not they go up a quarter point.
just microanalyzing every word. they left out a word. my god, they left out a word. they changed significant to substantial. they changed significant to substantial. what does that mean! what does that mean! i can see it coming. >> well, we don't know. we're waiting for janet yellen tomorrow. let me tell you. today at 10:00 we have robert kaplan, the dallas fed president. we're going to talk to him about energy. i met an awful lot of energy folks down here out west where i've been for a couple weeks now. guys who were in the energy industry and seem to have migrated to other jobs in the service and the tourism industry. that seems to be something going on here. so we'll talk to robert kaplan. and we've got a couple of fed guys for you tomorrow. and women, by the way. >> all right. steve-o. >> and joe, sorry. no tetons. haven't seen them yet. they're not here. they may be gone. >> but you are like a study in
active outer wear. yesterday you had the other one on. today you got that. that is rugged. >> he puts on the suit for the official interviews. >> he does. >> do you guys like this? >> hey, did mary set you up with that? you didn't do that yourself? >> mary duffy called yesterday screaming about my fleece. she didn't like my fleece. >> you know what? >> you look good, steve. >> you look the part. >> that looks like mary right there, man. and that looks -- i mean, i want to go buy that stuff. >> if i had my way, i'd be wearing an old ratty fleece. >> well, you look great. >> thanks. >> no small feat. you do. >> thanks to mary. >> thanks to mary, exactly. thanks, steve. mylan pharmaceutical under fire for raising the price of epi-pen. meg tirrell joins us with more. we're waiting for the interview
with heather bresch coming up this morning. >> at 8:30. mylan is responding after the backlash. they will provide up to $300 for certain patients for their out of pocket costs at the pharmacy. also increasing the eligibility -- doubling the eligibility for patient who is can get patient assistance from the company, help paying for their epi-pens. now to 400% of the federal poverty level. also seeing they're opening a pathway so patients can order directly from the company reducing the cost. interestingly they're not lowering the price of the drug, they're just increasing the patience assistance they're giving on the drug. and one of the arguments you hear from the pharmaceutical industry around drug prices is that the list price that we see isn't the real price. and mylan coming out with an into graphic this morning
showing what chunk is coming out to the middle men. you see it here. on the right is what's going to patients is the $806 list price. what they get on the left is in sales. the net price is actually $274. that's what mylan is getting out of the $608 list price. in the middle they say $334 of each pack of these epi-pens are going to pharmacy benefit managers and wholesalers and then the pharmacy retailers themselves. this is the argument the drug industry makes that the list price is not the real price. usually we don't get any transparency on what the actual middle men price is. >> that's interesting to have that breakdown. i mean, they are getting, like, a full half of that. but that is their right as the manufacturer of this. but i'm wondering what the best news for investors would be. because the stock is down 11% this week because the expectation was with all of the
political pressure, they're going to have to decrease the price. their margins would be hurt by that. now on this news that they're sort of shouldering some of the cost, the stock is up as much as 4% this morning. what do people want here? >> you're seeing a bit of a pop on this. not recovering everything they lost here. but i imagine investors are a little bit relieved to see them come out with a strong response, to see them taking this head on, to be trying to nip this in the bud. there are some analyst reports out saying the impact on the stock is much greater than the impact on the epi-pen as a result of this. >> we need a couple of competitors to test that. to push on that and say we can do it with those middle men we can still do it for here. then the next guy comes in and says we can even do it for here because we're going to do this better. >> that's right. and bernstein actually saying all of this attention could be further bad for mylan because it could spur the fda to fast track
the competitors. >> there's always a government involvement in all of these. "new york times," it's just clear as can be that it's greedy drug companies. that's a knee jerk conventional idea. >> there's a lot of government involvement in the epi-pen. mylan is pushing on airplanes. >> this is generic. getting an epi-pen is not discovering a cure for cancer or something. this can be done. and these weird laws that it has to be similar but. -- or it has to be identical, right? >> pretty much. >> how do you feel about mylan or other lobbying to make sure that schools and airplanes and others are actually forced to have epi-pens in their -- >> because that's more -- >> that's more business. >> so they use the government for -- that's like -- >> right. that's the crony capitalism. >> but it's not a bad idea to
have them around eric stolz was happy he had that. and that was an epi -- >> eric stolz the actor. >> scott tweeted that -- >> you know he's our "pulp fiction" expert. >> had that at the ready. >> he's going to be on. it wasn't epi-pen but it was adrenaline. when we come back, is there another earth next door to our galaxy? astronomers making a discovery that's only four light years away. joe wants to get over there. maybe it has the potential to be inhabited. we're going to send him on a reporting trip. >> with a "t." i'll be younger than you when i get back. >> that's true. dow looks it would open lower 27 points. we're back in a moment. e still build portfolios with strategies that just track the benchmarks.
next door to scientists are hoping for. let's bring in derrick pittsburgh. he's chief astronomer of the franklin institute science museum in philadelphia. i love talking about things like this. but i need to ask you an honest question. when we find something, it con furms what i think all of us probably assume. but if you had to guess, would you say that there is likely an infinite number of planets like this in the universe and we just happened to find one? >> i would say the number is very high because of the work that's been done by the kepler spacecraft looking at a small section of our galaxy. we've come to the understanding it's far more likely for stars to have planets than to not have planets. given that, that means if we had 300 billion stars in our galaxy. we could have at least 300 billion planets. >> in our galaxy.
>> in our galaxy alone. >> and a hundred billion in other galaxies. >> so the numbers get high. but planets like this one, i'd say, not an infinite number, but a significant enough number to at least allow us to believe that there is a possibility that one day we really will find one that actually is like earth. >> why is this -- >> i'm sure there's plenty. okay, so -- and we've been saying it's only four light years away. 186,000 miles per second and it's hard to accelerate humans to that speed much less -- don't we get -- approach infinite mass when we're going that fast or have we changed that? >> einstein has identified some channels there are to getting any object up to the speed of light. so we can let that one just go. but we can certainly try to attempt to get objects or spacecraft up to some significant percentage of the speed of light and therefore cut travel time. but it would be very, very
expensive energywise. you know what the alternative is? why not send something that's very small, very light, very compact yet has the capability to send us the data we need to help us understand objects at that distance. so that's a possibility of a plan of something that could really bring us all the information we need about objects like this. particularly this one. proxima-b since it's so close to us. >> it is exciting. i wonder what you think of when we send up a sort of a diagram of the double helix assuming that a species or a form of life that could receive something would be at least advanced enough to know what that signifies. is there -- if most matter is constant throughout the universe, can we assume that there's carbon -- if there's life somewhere else, is it going to be carbon based? i know in this day and age it's
a horrible word but it's good for us in terms of living. >> yes, carbon is very important for life as we know it. and that's the most important phrase of it. life as we know it. but the universe provides us with so many other options for -- >> really? silicon or something? >> stars, planets, all sorts of different chemical compositions. so there could be a possibility that there's some other kind of life form based on a different chemistry we may not recognize. >> and it could be a different temperature. it could be different -- gravity could be stronger. i don't know. it's mind boggling. >> all of those things are possible. >> i wouldn't surprised if there were acids somewhere else. because it's such an elegant -- and it had 4 billion years to decide that's the way to do it with every other option thrown in there. and that's what we came to. so i think it's a good idea to send a picture of dna --
>> that assumes all of the chemical -- all the elements we need for that happen to be in that location in that other location. and the conditions there are similar enough so that the same possibility for chemical chain could be possible. but still there's a lot of planets it could be. >> is there a proxima-a? why sit proxima-b. >> proxima-b is the smaller star. this is all part of that same system. so we have alpha centari. >> glad you cleared that up. >> didn't want there to be any confusion. >> anyway, derrick. thank you for joining us today. >> thanks for having me. coming up on "squawk box," dominos pizza pie from the sky. the company testing a new delivery service that could be
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price hike controversy. from capitol hill to the campaign trail, mylan under fire. the ceo will join us first on cnbc. fed fest out west. gathering in jackson hole. investors looking for clues about the next rate hike. amazon is shaking up shopping again. we're going to tell you how the e-commerce giant might be stepping up its delivery game as the final hour of "squawk box" begins right now. ♪ live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with kayla tausche and andrew ross sorkin. becky quick is off. and this is true. this is a true statement. we're less than 90 minutes away
from the opening bell on wall street. now the futures have been looking mostly like that for all morning. everything you see there is red. not significantly. which we just talked about. the market has felt worse this week than it really was. it's given back a little, but that was after a great move since brexit. s&p down two. the dow jones is indicated to open down 21. and then the nasdaq indicated to open down seven. a lot of the problems started at least if you're a bull the problems started over in europe. almost 1% losses and a couple of those over there this morning. i we still have companies bringing up the rear for earnings. tiffany out with quarterly results. 84 cents a share. that beat estimates of 72 cents. a revenue of $932 million, that was slightly short of consensus. comp sales were down 8%. despite that tiffany shares up
4%. sears posting a loss of $3.70 per share. that was worse than the $3.48 loss analysts expected. same store sales fell 7%. sales at kmart falling 3.3%. and fed news this morning, kansas city fed president esther george says it's time to raise interest rates. in an interview with steve leisman at the jackson hole fed gathering taking place this week, george said tightening should be gradual. she said stronger economic growth in the second half could deliver a 2% growth rate for the year. and we will hear more from that interview later on. mylan making headlines again this morning. the company announcing plans to boost access to its epi-pen injectors by expanding cost cutting programs for patients. that change comes after the company took fire. mylan's stock rising following that announcement. joining us now on set, aei
resident fellow and former fda senior adviser dr. scott gottlieb and dr. scott waxell. i hate when a really nice story of greedy corporate gouging has other nuances to it. it ruins everything for the politicians, for the demagoguing and everything else. but the journal -- can i call you scott? i keep saying doctor, it just gives you more credibility. the journal points out that if there were generic versions -- if there wasn't so much red tape generic versions would quickly cure -- certainly companies are going to try to maximize profits. that's what capitalism is about. if it's a monopoly, you can't expect different behavior. >> these complex drugs have become dwiflt to get on the market. not just epi-pens.
any time it's hard forency to d the agency has a hard time. we were talking about this very issue ten years ago when i was at fda. to your point, one kcompetitor was driven from the market. and there are three trying to get on the market. so we can't be surprised when a company handed a monopoly acts as a monopolist. >> in this case this doesn't seem like it's that hard to either design or make one of these things that will work. and even the adrenaline works as well but you can't substitute that. >> i think they need flexibility when it comes to trading for the difficult to formulate drugs. they need some flexibility within the process so the same could be demonstrated differently. >> yeah. i mean here you have a case where the epinephrine is cheap and it isn't hard to copy. it's the epi-pen. >> it's the actual physical technology.
>> it's the physical technology. it's the epi-pen. so that's been difficult for people to copy. teva is moving along. it's going to get a product on the market. but this is nuanced. and i always try very hard because you do have demagoguery. and here we have an election where both sides love to play to the masses. i worry about that because, you know, you hear things that aren't necessarily true. so we have innovation. everybody wants to have drugs that save their lives. and that's a different set of questions. in spite of the fact that we don't always think about that. but on the other end of things, it's not just the generic companies. you've got pharmacy benefit managers like express grips whose job it is to force prices down. but they own specialty pharmacies who want higher priced drugs so they make more money. because 30%, 40% sometimes of
those prices are going to special need pharmacies. >> how do you decide what a consumer would pay and what a consumer should pay? the consumers are saying maybe it would be worth $600 to me if it cured the allergy or if it lasted more than a year. it's not effective after a year so you have to keep restocking them if you don't use it. >> well, there are rules about that. when they stock them, they have to throw them away after a year. but that isn't the issue. and the consumer isn't the one who's really deciding when it is a monopoly. >> if there was a competitive market, what should an epi-pen cost? >> this started at $57. if you looked at the data when there's four more competitors to the market, it drops 70%. if we had more on the market, this would be about a hundred bucks. >> so teva's going to force the price down next year. >> when the fda gets to it.
>> it might be more than a year. zblit might be more than a year because the fda doesn't get its act together. >> especially the hard to formulate drugs. >> one is not working fast enough to get it going. the other is a crony capitalism issue which is you have a company and others trying to get in to lobby schools and municipalities to keep the epi-pens on hand. is that a bad thing? >> your paper points out that they bring up not being able to negotiate with medicare -- >> which is another issue. >> the higher utilization the schools having to stock it, that's a higher revenue product. the market is working too slowly because the average drug takes four years to get approved. >> what do we need to take that down? we all need it to come down. >> the fda has to alter -- the
fda works hard. we say we've got it under control. and it takes instead of six months to get a generic on the market, it takes two years, three years, four years. >> do they have the wrong people, the wrong processes? >> i think we need to consider a new class of drugs for complex generics where they might need to ask for additional compliments of data to satisfaction they're the same as the branded drug. trying to put complex drugs through an old regulatory process is not working. they're saying they know how to do this. literally i could point to things we talked about ten years ago on this very issue and haven't solved it in a decade. >> so this keeps happening, right? and we called him shrekky yesterday. it's shkreli but we've seen the same thing happening here. let's say hillary gets in, sam. just --
>> or trump. >> trump's not talking about drug prices to the same extent hillary is. >> but i think in the end, whether one plays to people's fears of constantly rising drug prices. in the end, if someone really thought about it carefully as scott has, you'd be in a situation where innovation gets rewarded for the period of time that you need it to. and that's critical. because what we do in medical research tsh. >> you're preaching to the choir. but you remember hillary had the original hillarycare? >> i do. >> so this is a long standing idea of hers. people all say she's saying that now. you don't take anything she says seriously because you have no idea. when she gets in, she won't do any of this? >> there's a fairly detailed proposal that came out from the american center for progress that lays out a lot of what i
think hillary would do. a lot of what she is saying is in concert with that plan. it would hurt the cycle, yes. >> one has to work very hard out there both in our legislative process but more importantly people have to begin to understand nuance. i said this before here. you have to understand the difference between "x" and "y." and if you don't, you'll do terrible things to our country. >> we have a very careful balance in this country between rewarding innovation and allowing brisk competition. the question is that balance being struck in this case? the answer is no because we're not rewarding innovation in this case. that's where the regulation is failing. >> i love things from the center for american progress. they're all so regressive. it's weird. i think it's like negative growth which we don't call like a recession. you know what i think it is? things like calling a bald guy
curly. right? they don't mean progress. >> when sam came on here, he wanted to be in the middle. we weren't going to be turning -- >> i know what sam really thinks. okay? he called you a communist when he sat down. >> what i really think is -- >> what do you really think? >> that government -- look. we all have responsibilities. each group has responsibilities so the pharmaceutical industry has responsibilities. its responsibilities are to innovate, biotech the same way, and to be rewarded for that. the generics industry is not innovation. so our government and the fda have to figure out what that once a drug a off patent, how do we get competition in there so prices drog by 80%. >> hold on. for your industry, which candidate is better? >> i actually think that for our
industry, it makes no difference. >> let me defend the generics industry. they do innovate manufacturing a lot. >> they do. teva tries very hard to create new drug entities. >> and cheaper manufacturing processes. >> but in the end, once a drug goes off patent, it is the responsibility of society to say that patent's gone. we now want a cheaper product for patients. and we want to drop prices. and that's critical. >> tell me nothing hurts a company more than negative earnings. i'm not going to call it a loss. >> by the way, on this show you guys talk about companies and stocks and hedge funds watch, investors watch. if those companies get trashed by mrs. clinton or by donald trump, those hedge fund managers won't be investing in anything.
you will destroy american markets. and we make 60% of the new drugs in the world. >> you've already seen an impact from the -- >> already. of course. look, i don't know -- you don't remember, andrew, but joe remembers. in 1993 when people really were worried about the hillarycare, you saw merck, pfizer just tank. you saw them buy pharmacy benefit managers. merck bought medco because they were afraid. afraid. >> you've seen the ipo market react to so m of the negative headlines already. >> back to the future. i can't believe we may be going -- i want to see some of this. i love that finger wagging before the blue dress? i love that. anyway, a programming note -- thank you, guys. programming note. mylan ceo heather bresch going to sit is down from the market site. that's coming up on cnbc right
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♪ welcome back to "squawk box." aol is leaning in the global media technology giant continuing to build on their successful empire of women centric brands with investoring on women-led technology start-ups. only 7% of funding goes to female entrepreneurs. joining us now to talk about women in tech, media, and much more is susan lyme. she is -- excuse me. bbg. what is bbg? what does it stand for? >> built by girls. >> bbg ventures. she's also former martha stewart
living. she's done it all. >> she's been working a long time. >> here's the question on women-led companies right now. when you -- i assume you meet thousands of female-led companies. is there actually a difference? do you say to yourself, this type of company is different. >> there are a few things that are very different. so women conserve cash more. they can actually spread out whatever funding you give them. they are going to be very careful about how they spend it. they actually perform better over time. it was a very interesting study done by one of the leading vc funds here in new york city. they looked at their first ten years of results and the women-led start-ups had 64% better outcomes than the
male-led start-ups. >> do you care about their age? so peter thiel, this is not a man or woman thing. he doesn't want to invest in people over 30 years old. he thinks heir not willing to take on risk older they get. does it matter more for women? i would think it might matter more. >> so i think that there is definitely something in the fact that you've grown up with technology. i would not say it's as much about risk although that may be a part of it. but the vast majority of start-up founders we see are in their 30s. >> rugt. >> some in their 20s. you don't see a whole lot of people going for venture funding who are in their 50s and 60s. >> where is the innovation happening at bb g rks? because your background largely is in media. we're a wash with content right
now. it seems anyone can slap a video together and put it on the internet. where are you seeing the smartest innovation? >> i think what we see over and over again is that women entrepreneurs are looking at some aspect of work life or home life and saying i can make this better. i can do something that is going to save you time, going to make your life more efficient. and it's often something that they face themselves. that they wanted themselves. we invested in a company called ringly that is doing smart jewelry and it came out of a smart entrepreneur and a great tech team. she wanted to be able to get alerts when she was in a meeting or she was at dinner with somebody without having to take her phone out all the time. because women don't keep their phones in their pockets like men do. >> culturally, do you think the
pc world is changing? you have an advantage in this space right now. but that's only because historically other venture capitalists haven't focused this way. is that piece changing at all? >> not a lot. so, you know, still i would say you hear 4%, 5%, 6% of the decision makers are female. that's it. i mean, that's a tiny, tiny fraction of the universe. so i think what you'll see is more funds like bbg ventures. not that the world out in silicon valley is going to change dramatically. >> i do have a media question for you as a former abc person. >> yes. >> do you think that diz disney should or will buy vice? >> i think what they did was smart which was let's take a little less than 20% of this company and that's a meaningful stake. >> right. >> but they've seen before --
you remember miramax that when they step over a certain line with content, there's rejection within their core base. and so they've been i think cautious here about saying let's test it, let's see -- >> you think vice is going to work? there's a critical article going in the past 24 hours. >> i've seen a number of them. >> just how challenged, if you will, the ratings have been for this new network of theirs. >> look. it's very early days. i mean, this is a months' old network. and we've seen over and over and over again that, you know, people say networks are dead until they get one show that works. and the whole perception changes. so i think, you know, watch them a year from now, watch them two years from now. this is a huge opportunity for them to have a linear channel.
they get to test then try and explore and see what kind of programming is going to work. >> would you be long vice? if you could be? >> i sure would. >> susan, thank you. >> nice to see you. coming up on "squawk box," ryan lochte may be trading the swimming pool for the dance floor. details up next. then later on, heather bresch the ceo of mylan will join us. we'll be right back. with this degree of intelligence... it's a supercomputer. with this grade of protection... it's a fortress. and with this standard of luxury... it's an oasis. introducing the completely redesigned e-class. it's everything you need it to be... and more. lease the e300 for $549 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.
welcome bhak to "squawk box." take a quick look. last time i think the dow was down 20 or so. still down 20 and the s&p down 2.3. nasdaq indicated down five. a lot of people waiting for friday, waiting for friday. i do that every week, but this time it has to do with janet yellen, i think. sorkin, you have to read this. >> coming up, we have weekly jobless claims and durable goods. we will
bring you the numbers and reaction. then mylan ceo heather bresch. first right here on cnbc. we're back in a moment.
down 23 points. down two on the s&p 500. the 10-year note, take a quick look at that. rick santelli has the numbers at the cme in chicago. rick? >> well, last week we had a 262,000, today we have 261,000. 1,000 different than last week's 262,000 stands as is. weekly claimed dropped from 2.175 to 2.145. here's the preliminary read on durables. if we look at headline durable goods was up 4.4%. better than expected. we were looking up about 3.4%. but we did lose something in the revision. last month -- remember, this is a volatile series. last month we had minus 3.9%. now it stands at minus 4.2%. even we ended up with a greater on the upside. but it shows you the volatility.
strip out transportation. we still have a solid 1.5. if you look at non-defense aircraft up 1.6. this is probably the best news. if you look at shipments, they're down 0.4%. that is a surprise. how does that 1.6% stack up business spending, capital spending is a key here. it's the second highest of the year. came into january with up 0.24%. 1.6% stands as the second highest. and do keep in mind that when we look at this data, it can be changed when we get the final read. markets haven't moved much on it, but i have to say, we moved from 155 to 156 and considering this is -- let's see. this is the 19th potential session in august and every one of them is close between 150 and
160. so it shows you the coiling, the compression going on. really it's not a whole lot different when you look at equities. so jackson hole where steve leisman is with that cool jacket probably can make a difference. and that's the part that really is depressing. that the microphone may make a difference in fundamentals somewhat get overlooked like yesterday's lotto ticket. back to you. >> all right. thanks so much for that data today. meanwhile, pharmaceutical company mylan under fire for hiking the price of its epi-pen. mylan raising the cost of the injectable allergy medicine by over 400% in recent years. this morning the company announcing plans to boost access to its epi-pen injectors by expanding cost cutting programs for some patients. the stock moving higher after being hit hard over the last four sessions. it's currently up 3.5% in premarket trading. let's get to brian sullivan who's with mylan ceo for a first
on cnbc interview. >> thank you very much. we are here with the ceo that is no doubt the center of a national fire storm. i think that's fair to say. heather bresch joining us for first on cnbc. the price hike that kayla just referred to that's been in the news the last few days has been labeled outrageous by hillary clinton. egregious by bernie sanders. greedy by the white house. and parents all over the country are outraged they've got to pay more. how do you respond to all that? >> well, i think that we responded this morning first and foremost ensuring that everybody who needs an epi-pen has one. as a mother i can assure you the last thing we would ever want is someone to not have their epi-pen due to price. so i -- like i said, our response has been to take the immediate action of making sure everyone has an epi-pen. that was first in front. that's why we're here today is to make sure that message is out there loud and clear. >> and you've got something to announce which is going to help the payment side. we're going to get to that in a
moment. but help our audience many of whom are parents themselves understand how the price of a drug goes from $60, $75, $100 five or ten years ago to $600 today. how does that happen? >> so, brian, look. first as i put out today just to try to help because i know this is a complicated conversation around health care and insurance, that the $600 is a list price. that's $608 is a list price. our net sales is $274. so $137 per pen. and against that, manufacturing the product, distributing the producting with enhancing the product. investing. when we took over this product eight years ago, there was little awareness. we took on -- we have doubled the lives of patients that are carrying an epi-pen. we have passed legislation in 48 stagts to allow undesignated epi-pens to be in schools. what that means is there have
been tragic events like a 7-year-old in virginia who died on the schoolyard because the school had epi-pens but not in her name. so we fought. that takes time and resources to get out there and make sure that people are aware of the issues and that people understand that epi-pens need to be everywhere. i said it's just like a defibrilla defibrillator. when you have having a severe allergic reaction, you need an epi-pen in seconds. >> heather, surely you must understand the outrage. people are outraged because it seems outrageous. that the american medical association has said this is basically the same product it was in 2009 and yet the price has gone up 300 or 400 fold. >> look, no one's more frustrated than me. i've been in the business for 25 years. >> but you're raising the price. how can you be frustrated? >> my frustration is there's a list price of $608. there is a system -- i laid out that there are four or five
hands that the product touches and companies that it goes through before it ever gets to that patient at the counter. no one -- everybody should be frustrated. i am hoping that this is an inflection point for this country. our health care is in a crisis. it's no different than the mortgage financial crisis back in 2007. this bubble a going to burst. >> what are you referring to? >> when you walk up to a counter, i think it's fair to say any time you're shopping for anything, you know what that product is going to cost when you walk up to the counter. only in health care and in this case pharmaceuticals do you walk up, you could have paid $25 yesterday and you're paying $600, $1,000, $2,000. deductibles overnight went up. >> all they know is -- you know this. mom and pop when they go to a walgreens or vcs and have to get $600 for an epi-pen and see mylan on it, do they care about
those other people making the cut? they don't. >> and they shouldn't care. that's why congress and the leaders of this country need to quit putting their toe in this topic and really fix the system. we have an outdated, inefficient system. the patient shouldn't. but you know what's happening? the patient is paying twice. they're paying full retail price at the counter and paying higher premiums on their insurance. it was never intended that a consumer that the patients would be paying list price. never. the system wasn't built for that. so if we're going to consumerize health care, we want to get you engaged. patients need to get engaged in their health care. >> what you announced today was you tripled the rebate. that's what you're talking about with list price versus what people will get back. why not just roll back the price increase? why do the around the way rebate? >> brian, here's the perverse thing. had we reduced the list price, i couldn't ensure that everyone who needs an epi-pen gets one. so we went around the system. that's what we announced today.
this savings card is equivalent to cash. $300. so effectively we're cutting the price in half but we're letting you take control of that. we're letting the patient take control of that. we enhanced the already existing programs. these programs existed, but this phenomenon which is new and literally has happened overnight, people don't understand their coverage and how could they? it is complicated. >> high level politicians are saying roll it back. why can't you do that? >> i have to play -- the reality is and the brand pharmaceutical market, this isn't an epi-pen issue. this isn't a mylan issue. this is a health care issue. pharmaceuticals, the irony is that the system incentivizes higher prices. and it's the conversation that no one has wanted to have. even you guys the media as you've covered this, just the basic math of showing the $608 and what mylan's getting in that
sell. there's $1.3 billion that is exchanging hands out there. this is real money exchanging hands and it's not efficient. so consumers -- i say we're the best shoppers in the world. we want the best product at the lowest price. >> let's call it $600. we showed that graphic. people on he radio, it's five people in between. the retailers, wholesalers. everybody's taking a bigger cut. and you're saying you can't cut the price because they won't cut their prices? >> i can't control -- >> so it would be more expensive at the end. that seems weird. >> there's no question. the system is broken. i'm saying i look at this -- like i said, first and foremost, we want everyone who needs an epi-pen to have one. as a mother it breaks my heart. there's no one out there that shouldn't have it. i know the tragedy that strikes. we've worked tirelessly with advocacy groups. i've been on the phone daily ensuring we are doing everything to not let people fall through the cracks. >> but you understand the
headlines which is epi-pens which are needed by millions of children, the price goes from 50 bucks ten years to $500 or $600. and you're making $18 million a year. you understand how that looks. >> brian, look. i understand better than anyone that facts are inconvenient to headlines. and why i'm here today and why i want to change this conversation like i said first of all so everyone has access. let's talk about over the last eight years what we've done to your point to make sure the people who need it half it. when we passed legislation in 48 states to ensure that the states -- that schools can have epi-pens, we have given out 700,000 free epi-pens. we stocked 55,000 public schools in this country with free epi-pens to ensure they're there when needed. in 2015 there were a thousand incidents in schools. people had no idea they had a
known allergy. so the epi-pens were used, they were there to prevent serious adverse events. we're now passing legislation, 30 states to have them in restaurants, hotels. because like i said, they need to be everywhere because when you need them, seconds count. >> but the cynics would say to that, you're just legislating in a new market. >> i'm legislating in the access to epi-pens. what i legislated was a program we give them free to the schools. like i said, we've given over 700,000. so we're trying to get them so businesses can have them conveniently, restaurants. every day if there are unnecessarily tragic deaths happening every day. >> i want to go back to the issue of the system, in a wa i. to be fair, "the new york times" this morning points out the average price of drugs is up 40%
in a decade. at the same time copays and deductibles are also going up. so mom and pop at home, all they know is whatever it is, the epi-pen or any variety of drugs out there, that they're paying more and their insurance company is doing less. why has this happened? how have we gotten here? people are going bankrupt on medical costs and prescription drug costs. >> i couldn't agree more. we fight -- let me just say this. mylan, we have over 600 products in the united states. we fight every day to get affordable medicine out there. i think we do it as good as anybody. yesterday we invalidated a patent on a product for multiple sclerosis that cost $80,000 a year. $80,000. so while -- >> you invalidated the patent. what does that mean for the cost of the drug? for those suffering from m.s. that need that drug? >> hopefully as soon as we can get our product approved, it's going to mean increased competition and it's going to
lower the price. in the brand arena, generic products, it works very differently in the system than brand products. the system insentivizes higher prices on the brand. and if you don't play in the system, if you don't -- in the system that's broken today, your products aren't going to get to patients. because of the lives covered by all the middle men you talked about. my point is patients are paying right now twice. they're paying full retail price at the counter and they're paying higher premiums. it's time -- it's time. we've talked about this. you guys have covered price increases one story after the next. and the next story is going to come and go. this election cycle is going to come and go. and i hope -- i can assure you of this. i'm committed to drive change. because congress -- the leaders, the senators, i've called all of them. i want to have a face-to-face meeting. price is one part of the problem. >> you do? because a bunch of barn senators
would like to taum to you. >> i've reached out to senators. grassley, warner. >> you reached out to them? >> personally. >> in the last two days? >> two days ago. i called them and said i welcome -- they haven't called me back. >> when's the meeting? >> they haven't set it. i said as soon as you can meet, i'm there. because price is part of the problem, but we need all of the stake holders at the table. you can't -- you cannot fix the problem and that's why we -- >> who needs to be at that table? congress, you know they're going to call you in. let's say there is a hearing. who needs to be at that table? >> all the other players. pharmacy pbms, pharmacy managers, doctors, pharmacy. they need to be at the table. because this system needs fixed. listen. this is the greatest country in the world that we deliver the best products in the world. this is an area there's no transparency, there's no clarity, and no one knows what anything costs.
>> we are the worldwide leader in business news because we go across the globe. you know what people say? i'm in candy and the epi-pen is $100. or in germany, it's $110. why is it so much cheaper everywhere else? >> look, i've watched your guys' over the last few days. the reality is we do subsidize the rest of the world. we do subsidize and as a country we've made a conscious decision to do so. and i think the world's a better place for it. but that doesn't excuse an outdated and inefficient system. we can't hide behind that. congress can't hide behind it anymore by just saying pharmaceutical companies are, you know, horrible corporate citizens. and they're greedy and then that be the end of it. they need to not just put their toe in it. you need to get in meaningfully and we need to change. i'm committed to that. and i'm going to -- the election can come and go, the next news
story can come and go. >> let's talk about the election. okay? because if i'm a mylan shareholder and the stock is down pretty big the last couple weeks, i would say, heather, you're the daughter of a prominent politician. you're raising prices in front of one of the most contested elections in history where the biotech and pharma industry are being labeled as greedy corporate overlords by many high-ranking members of not only congress but people running for election. why now? >> look, brian. it's not now. we've invested over eight years. this wasn't overnight. i just mentioned all the things we've done and we're continuing to do. i'm running a business. i told you we have over 600 products here in the united states that we got -- decreases. i know no one wants to talk about decreases but that does happen in the industry. >> doesn't seem like it. >> i know. i know. because on the brand side, on the brand side of the house
it's -- the system incentivizes higher prices. that list price because of all of players. >> are the managers taking a bigger cut? >> look, there is no transparency. i put that bar, the buckets because you can't determine who's getting what piece of the pie. >> i've read and hear your cost of the epi-pen is probably $3. >> look. if you look at the auto injector, we have made changes. the needle protector. the use. you need the right amount in seconds. that's what our auto injector does. safely and it needs to work every time. >> so you -- because the argument has been, well, they bought this for whatever you bought it for from merck of germany ten years ago. haven't put any money into it yet have raised the price 17 times. >> we've put hundreds of millions of dollars behind it.
you can't pass legislation. you can't enhance formulations. we are continuing to invest to raise awareness that people are fully aware of the ramifications of not having access to an epi-pen. we have worked across the spectrum from rnd to education to awareness to ensure that that happens. when we took over this product, they weren't spending a dollar on it. and if you read about the events happening in schools and restaurants, it's not just to say we want to continue that there's never a life lost because they didn't have access to an epi-pen. >> is mylan a greedy company? you've been labeled greedy. >> listen. we have for over 50 years fought for affordable access to medicine. we have fought to raise the quality standards. we have fought to make it a level playing field that for the products that everybody is taking here in the united states is -- meets the same quality standard. we have fought night and day to bring products to this country
or into the market place at affordable prices. our investments to bring biologics into the market place. these are drugs that cost hundreds of thousands of dollars a year. so while i know that epi-pen is touching the homes of families out there which is why we are doing everything we can immediately to ensure nobody goes without an epi-pen. the fight on the $300 billion pharmaceutical market is real. and we need to fix it. because this country -- it's not sustainable what's happening today. >> given the fire storm around this, are the price hikes for mylan done? >> look, we're going to continue to run a business. and we're going to continue to meet the supply and demand of what's out there. i can tell you i don't think anyone should say status quo or business as usual. this is a dynamic industry. and our system needs to be dynamic to evolve and transform
this health care system. >> are you ready to take on to congress? >> i am ready to work with congress to make it happen not have a pr sound bite. >> "the new york times" intimated in the op-ed congress yells a lot but does nothing. >> i couldn't agree more. >> because the lobbying. you guys lobby too. you lobby. is congress too close to the biotech and pharma industry? >> i think we need leadership in this country to make the tough changes. this isn't easy. if it was easy we wouldn't be sitting here. it's a complicated system and to get in and understand it takes time. as you know, many people don't have the time to take the time. our congress, our leaders in this country, need to get around the table and fix this. >> we know it's been a tough week for mylan, for you, for epipen parents, most of all, but we appreciate the time you've taken to come in to speak to us here on cnbc on this important topic. >> i appreciate you guys covering and listening to this side of the story and most
importantly, making sure that families out there know, that they have access to epipen and everyone who needs it will get one. >> i do know the story is not done, so hopefully we'll speak again. heather bresch, thank you very much for joining us first on cnbc. kayla? >> and brian, thank you for bringing us that interview this morning. when we return jim cramer will join us live from the new york stock exchange. "squawk box" will be right back. make healthcare more personal with patient-centric, digital innovations; from self-monitoring devices that can interpret personal data and enable targeted care, to cloud platforms that invite providers to collaborate with the patients they serve. that's why over 90% of the top 25 global pharmaceutical companies are turning to cognizant. our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way clinical research sites collaborate with pharmaceutical companies, and enhancing patient engagement
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let's get down to the new york stock exchange. jim cramer joins us now. mylan was up prior to the interview. it's up still a little. heather bresch prets good i thought an brian got a lot of the key points. i thought she handled herself pretty well. >> well, i'm proud of brian asking every touch question, obviously, and i just think that the system, well clearly the system is broken. i think that she's trying to do everything she can to make money for shareholders but sometimes there should be more compromise and wow, this is just -- i mean, i think i was just wrapped about it. on the one hand i wish mylan hadn't done what it did for the people who have to take these pe pens. i have one and i'm frankly lucky enough to be wealthy to have a bunch of them. you don't just need two.
wow. the system is crazed. >> but jim, people need to know we subsidize the rest of the world number one, because that's true, and innovation helps everyone. and 40% price increases on all pharmaceuticals over ten years, that's 3.4%. i think compounded. and again, that has something to do with subsidizing. we still have the r&d is the envy of the universe in terms of where we are. >> the shocker, the competition, there should be a bunch. i'm not saying it's not hard to make. it's the competition. should be someone with a better mouse trap. >> i don't think there's that much barrier to entry here. think if it was possible. >> there is barrier to entry because of the fda. >> that's not the company's fault. that again, is the fda's fault. >> it's not clear what piece of the pie the pharmacy benefit managers are taking of this. what do you want to know from express scripps. what's their responsibility? >> i think that everyone -- look
i have the other guy's pen. i think it's effective. i don't know why the fda pulled it and didn't work with them. the idea was, they jacked this up, get extra money before the big competition came in. where is the competition? why the one i got is supposed to be so bad because boy there was a lot of breakthroughs here and i wish this is where there was venture capital because the epipen ain't so hot. >> exactly. you need to be able to sell it in the system and get reimbursed for it and it has to be the same as what the doctor pribs, so there's -- you know what, there's regulations coming out of ying yang. >> products about to be crushed because of the competition. going to be crushed. >> yeah. >> and, you know, the fda should be saying listen we have to look at this competitor. >> what should the stock be at? >> i don't know. this is a good company. what can i tell you. they make a lot of money. >> we will see you in a couple minutes. i'm sure this conversation on mylan will continue. we have today's top stories, back in a moment.
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off about 3 points. thank kayla. >> she's here tomorrow. >> being here again tomorrow. >> yes. >> thanks for thanking me in advance and heather bresch, for that great -- >> that was good. >> with brian. join us tomorrow where kayla will be and -- >> i'll be here. >> and he will be here. >> chop tped liver. ♪ good thursday morning. welcome to "squawk on the street." david faber is off today. heaviest news flow of the week as we had key economic data to the earnings flow, durables rise for the first time in three months but futures are red. europe mostly negative, treasuries remain in the narrowest range for any month in about a decade. our road