tv Nightly Business Report PBS December 17, 2013 7:00pm-7:31pm PST
this is nightly business we port wi report with tyler mathisen and susie gharib. >> up to the stock market news and in depth aname sis. our kuwait raunlting service projikts up jiktive rating didly on over 4300 stocks. learn more at the street.com/nbr. not business as usual. glax so smith kline to quit two of the industries most common and controversial practices. the way it promotes products and compensates sales force. will rival company s follow? >> best medicine. why some are calling on consumers to pass vitamins. what does that mean for the companies that develop and sell supplements?
>> wasteful spending, $300 million on a blimp? hundreds of thousands on a cartoon. how congress is spending your money. that and more tonight on "nightly business report" for tuesday, december 17th. good evening everyone and welcome. major news affecting two facets of health care in america tonight, first, one of the world's biggest drug makers changes in a fundamental way how it's products are marketing and ends a decade's long practice in how it compensates its sales force, and second, president obama still trying to get the healthcare.gov website working right, calls in tech support, very expensive tech support. he met today at the white house with a executives in technology from apple, facebook and more to get their advice how to fix that problem plagued portal. well, rt big drug maker tyler just mentioned is glax so
smith kline. how transformational is this change and what does it mean for glaxco? >> reporter: glaxco is breaking the hold. it will stop paying doctors to promote drugs. the producer of top selling medications and tums and aquafresh is also changing how it pays sells representatives. it will now tie composition to the number of prescriptions doctors write. the company says it's been a competitive advantage because health care professionals appreciate the chance petranspa. the ceo says it will bring greater clarity and confidence when we talk to a doctor, nurse or prescriber, it will be patient's interest. >> there are good reasons the industry used physicians as their advocates when it's
connected with direct payment that's when you have conflict of interest. >> reporter: glaxco may be trying to repair it's reputation. in china it's accused of bribing hospitals, and officials and paid a 3 billion-dollar fine in the united states to settle acquisitions that marketed drugs for unapproved uses. in the past few years other drug companies like johnson & johnson, fazer and mekr paid big fines. one reason analysts say other companies will follow glaxco's lead. >> over the next two years, i think we're going to see the process by which pharmaceutical companies promote their products through medical education and with the input of physicians will change somewhat. >> reporter: one big reason, the affordable care act will require drug companies to disclose how much they are paying each year. this could push them to
accelerate changes. >> clinical meetings and boondoggles, those have really been cleaned up dramatically over the last, i would say, five years, and i think the industry is trying to gain the reputation that they should have, which is they provide tremendous value to society. glaxco is taking a big first step. they are waiting to see which companies will follow. for nightly business report, i'm sarah izen. >> our next guest has been critical of the drug companies, professor of medicine at harvard medical school. good to have you with us. do you think glaxco is doing what they are doing because they got religion or they got caught? >> well, it's very hard for me to know what their motivations were. it's a good step in the right direction for them to learn about drugs from an unbias
commercial source of information rather than a doctor being paid by the drug maker. as to why -- hard to know. not been a good year for glaxco as your report indicated and maybe they are trying to take the high ground to be in the media for something good instead of bad they did. >> dr. avorn, maybe it's not good to pay the doctors, maybe the business model market has changed, you can go direct to consumer. we see ads on tv promoting drugs. isn't it more they can go direct to the consumer? >> well, there is a lot of that going on and as you know, we're one of two countries on earth, the other being new zealand that allows direct to consumer ads of prescription drugs. these are issues that are too complicated to fit into a 30-second or one-minute commercial on tv, and to the extend they are doing that, that
may be a way to market the drugs. probably not the best way to market drugs. >> those ads of prescription drugs are mostly disclaimers it seems to me, unless the selling points. how many perspective on how this is likely to affect glaxco's sales, it's revenues? >> it will be interesting to see how it plays out in terms of sales because on the one hand you can probably sell more drug if you completely control the message, if the doctor giving the lecture or continuing education course is being paid by the company and often, a lot of people don't know, the slides and script and content of that talk is provided directly by the company, as well. if you're doing that, you can probably manage to make a better sales pitch than if you are having a doctor who may be independent and coming to this as an expert say what she or she thinks. it will be interesting to see what effect it has. >> doctor -- >> better for patients, though?
>> uh-huh. >> i was going to say it's better for patients. >> i was going to ask you, you know, you've made a career on educating doctors how best they can prescribe medications to their patients. what else would you like to see happen? other improvements would you like to see happen in terms of transparency and best practices for patients? >> well, i'd like to see doctors being able to get information about drugs primarily from sources that are not the drug makers. we certainly can afford that considering what we're paying for drugs in this country, which is way more per capita than any country, and it would be nice with groups like ours, which there are folks who are unbias able to go out and teach doctors about the evidence behind the drugs without any particular ax to grind. if that was a more wide spread practice instead of having to have doctors rely on company sales reps, whether folk whose
are sales representatives or doctors paid by the company, that's just not the most efficient way for people to learn about what works and what doesn't. so i'm hoping we'll see more of that going forward. >> where do we stand on the question of paid research? in other words, where doctors are paid where the research is funded by a pharmaceutical company, medical device company. where does the state play on that? >> i think it's important to make a big distinction between the good research funded by a company versus sales or infomercials or dinner events that are funded by a company. we have a model for better or worse that clinical trials are funded by companies and as long as they are well-done and rigorous and not set up to get a predetermined result, that can be useful. we need to make sure the studies are well done and not setup in a way that's a marketing exercise. >> thank you for being with us tonight. >> you're welcome.
>> professor of medicine at the harvard medical school. the problem-plagued healthcare.gov website is getting help. the obama administration named a top executive as a senior advisor to kathleen sebelius. delbene is charged with fixing the portal with less than a week to go before a deadline for buyers to lockdown insurance coverage that could begin on january 1. also today, the white house turned to the whose who of technology for some advice on how to repair its health insurance exchange website. most of that meeting turned out to be focused on the spying scandal and national security and overhauling the way the government conducts surveillance. eamon javers joins us more on the meeting, who was there and what, if anything, might have been accomplished. eamon, what did the ceo hope the
white house would do here? >> what they are telling us is what they would like to see is the white house and united states government allow them more transparency, tell their customers, facebook, twitter, google, to tell their customers exactly how often they are turning over information to the united states intelligence. right now, they are not allowed to reveal some details how often they cooperate. they feel like this would go a long way to alleviating concerns customers have in the wake of edward snowden disclosures. >> that's what the ceos looked for. did the president page any offer? >> this meeting, which was unusual, about two hours and 45 minutes long with the top figures in global technology at this meeting the president more or less took a listen and learn approach. he wanted to hear their ideas for what they would suggest that the white house do here. of course, the white house is wrapping up an overall review of the intelligence gathering capabilities and just figuring
out exactly what changes it wants to make, if any, in the way the nsa gathers information around the world. >> one thing that was confruiting, we thought this meeting would be about the health care website and it turned out they were talking mostly about this nsa stuff. so, you know, what was all that about? >> well, it was interesting. the white house sort of billed this as a healthcare.gov conversation with maybe other stuff tacked on at the bottom. in the end, this was very much an nsa conversation. the ceos came to the white house. they wanted to talk about spying by the united states government. the white house really wanted to frame this as a conversation about technology in a larger way. we're told the first 45 minutes of the conversation focused on healthcare.gov and the website and technical issues, but the president didn't come in until after that conversation was over and then two hours on the spying issue. >> thanks very much. on wall street, traders were in a holding pattern today with stocks trading in a narrow range
all session long and ending slightly lower ahead of the decision whether to taper stimulus measures. let's look how they faired today. the dow down nine and s&p and nasdaq both lower by five. more now on that fed meeting. fed chairman ben bernanke arrived in washington this morning for the start of the final policy meeting of the year. voting members will decide whether the time is right to begin winding down the fed's $85 billion and a month and how much tapering the markets can handle. the senate is closer to a budget deal, the proposal for a two-year federal budget that passed the house cleared a key procedural vote in the senate day, could be cleared in the upper chamber as early as tomorrow. 2013 was busy for wall street and a lucrative one. the security and exchange commission filed almost 700
enforcement actions through september of this year. that's a 7% fewer than the year before. as investigations from the financial crisis tail off. but sanctions and settlements from those actions totalled a staggering $3.5 billion, 10% more than last year. the housing market has seen remarkable gains this year but millions under water in real estate. real estate watcher core logic reports in the third quarter of this year there were nearly 6.3 million homes, 13% of all homes where the homeowner owes more than the home is worth. that was last year and core logic thinks the number will decline. home builders are more confident these days. a new survey shows sentiment kicked to a four-month high in december and that's thinks to a reisn't bump in new home sales. still ahead, why the best medicine may be ditching your vitamins and eating your peas. details on a new study and what
it could mean for companies that develop and sell nutritional supplements. amc entertainment is expected to price the ipo tonight and begin trading tomorrow. the company hopes to raise more than $350 million and trade on the new york stock exchange under the symbol amc. julia boorstin looks at what some investors might find appealing. >> movie fans flock to amc for popcorn and the latest flicks but will they want to buy a piece of the company? we'll see shares of amc 80%
owned by another group start trading wednesday morning. >> amc is the second largest operator in the united states for theaters and screens. it is -- it has been around for awhile, and has, you know, a solid large market presence. >> reporter: amc has advantages, it's good at getting movie goers to pay more with highest average ticket price and has more i max theaters than competitors. how did the financials stack up against the biggest rivals, lowest return on invested capital of the group. now amc is investing to make theaters more appealing with reclining seats, leg rests, dine in theaters with seat side food service, bars and lounges. >> these are investments regional and cinemark have been making. amc was left behind and haven't been able to have access to
capital the others have had. so they are starting their investment face right now. >> reporter: amc hopes customers will invest in the future inviting 2.5 million members of the ticket loyalty program to buy shares fee-free which gives individuals access to ipos. if customers become shareholders, that could give them reason to be loyal to amc rather than pick a screening based on schedule and location. i'm julia boorstin in los angeles. 3 m is buying back shares and increasing dividend by more than a third and that's where we begin market focus. the scotch tape and post it note maker will spanld the repurchase over the next five years and 3 m gave an outlook that surpasses estimates. shares rose 3% to $131.39.
microsoft won't bpick a new ceo until next year. they will announce the choice in 2014. steve balmer, ceo since 2000 is planning to retire next year. if you're a facebook user, video advertisements are set to start this week. facebook is rolling out ads that will play automatically on phones and computers. the move might help the social networking giant take part in the huge tv ad market. shares of facebook were up to $54.86. at&t is selling connecticut operations to frontier communications for $2 billion. the biggest phone company said the proceeds from the deal will help expand the 4 g network. it will help grow internet and video services. the deal won't go through. shares were down to 33.85 and
frontier sour to $4.78. higher chicken prices and lower chicken feed cost helped farms grow earnings. the profits more than quadrupled and that disappointed investors that sent shares to $68.38. shares of rock well medical plummeted after the pharmaceutical got a sell rating. the analyst doesn't expect rock well's new amean ya drug to be approved by the fda and said flat future growth is the reason. that will do it to you. shares plummeted to $10.80 the close there. target took a big hit today after the big drug developer said it would stop working on an experimental drug. the drug to treat schizophrenia and alzheimer's didn't meet the goals. the stock slumped 33.5% to just
3. 95. we have a recall to tell you about. the electric chargers for the hp chrome book. they can over heat and melt when plugged in. the manufacturers pulled them in november. if you're one of the millions of americans that take a visit mine every day, this could be a tough pill to swallow. vitamin pills may not have benefits and may pose risks. should we toss out the b 12? >> reporter: many americans take vitamin supplements to compensate for a poor diet and improve overall health, but a new study indicates that the theory may be wrong. >> i generally don't recommend
vitamins, healthy dietary patterns and regular exercise because it's unnecessary, and even in the setting of poor diet, it doesn't seem to have benefits. >> reporter: dr. miller, and other researchers co-wrote a bold editorial writing that supplementing a diet of well-nourished adults has no clear benefit and might be harm l. for example, the beta ker keen increased incidents of lung cancer with high hch risk patients. vitamins may not ward off chronic diseases. >> many people in their mind are thinking that it's an insurance policy against chronic disease, but this is what these studies are showing that it's not, so you can save your money and maybe buy more fruits, vegetables, low-fat dairy. >> reporter: the gnc holdings, herb life have exposure to the vitamin and supplement industry, which has been growing at a fast
rate. research firm eros star expects it to reach $28 billion in sales by 2017. analysts i spoke to don't see demand for vitamins decreasing any time soon. they wrote that supplements provide consumers a low-cost alternative to traditional health care and younger consumers will be a driving of future sales as this segment of the population is focused on their physique than in years past. for "nightly business report", i'm seema mody. coming up, 1 million for a bus stop and millions more for crystal steam ware, that's how congress is spending tax dollars and why one senator says enough is enough.
this weekend's massive storm that dumped ice and snow to main kepted millions of would be shoppers out of the malls. the shopper track reports the number of shoppers at the brick and mortar stores this past saturday, get this, plunged nearly 26% from the same day a year ago. nearly a third of all americans will be hitting the roads this holiday season. aaa predicts 95 million people will be traveling at least 50 miles from home between this coming saturday and new year's day. that's more than last year with nine out of ten travelers driving, the rest by air. this is something that should help out, gas prices are lower now than a year ago. one thing that never appears to head lower is wasteful government spending and there was plenty of it highlighted in one senator's report of federal
out lays called the waste book. hampton pearson has more. >> reporter: calling out congress for not making the tough choices when it comes to cutting federal spending, oklahoma senator's latest waste book highlights $30 billion worth of questionable government spending this year. >> my contention is had congress been focused on doing its job of setting priorities and oversighting and cutting waistful spending, we could avoid a government shutdown and the budget deal that we're considering, which actually grows the government and raises the burden on the american taxpayer. >> reporter: the headliner, the pentagon's decision to leave $7 billion worth of military equipment behind as troops pull out of afghanistan and the army's mega blimp, a 300 million dollar project halted intended for use in afghanistan but in
three years of development, it made one trip. another $390 million spend by the green anyone ya, a super hero created to motivate kids to take action regarding climate change in the same year the budget grounded flights. calls to nasa were not concerned but it's sate much of the questionable spending is tied to the availability of government contracto contractors. >> until they have capital put at risk, they know how to control cost but milk the system and now there's no penalty for milking the system and no reward for controlling cost. >> the senator unveiled this year's edition of the waste book after cutting off debate on the budget bill because he says congress simply doesn't have its eye on the ball. for "nightly business report",
i'm hampton pearson in washington. finally tonight, after 21 straight drawings without a winner, tonight's jackpot could set a u.s. record. officials say a last-mine buying frenzy could push the prize higher. we spoke to ticket buyers asking what they plan to do if they won? >> i want a chance just like everybody else. >> very blessed but money-wise, no. >> nothing like a dream. they say you got to be in it to win it, and i'm in it. >> now, if you're playing tonight's game, good luck. the drawing is at 11:00 eastern time. tyler, i know you haven't bought your ticket but the ads are in one and 259 million. good luck. >> i'll take those odds. >> that's "nightly business report" for tonight. i'm susie gharib thanks for joining us. >> i'm tyler mathisen. thanks from me as well v. a
great evening everybody. see you back here tomorrow night. "nightly business report" has been brought to you in part by. >> thestreet.com, up to the minute stock market news and in depth analysis. our quant rating service provides objective inden pendant ratings daily on over 4300 stocks. learn more at the street.com/nbr.
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