WEBVTT - The Price of Bank Runs and the Value of Twitter Blue 0:00:01.280 --> 0:00:05.280 You're listening to the Bloomberg Opinion podcast counts Saturdays at 0:00:05.280 --> 0:00:08.400 one in seven pm Eastern on Bloomberg dot Com, the 0:00:08.480 --> 0:00:11.600 iHeartRadio app, and the Bloomberg Business App, or listen on 0:00:11.680 --> 0:00:13.760 demand wherever you get your podcasts. 0:00:15.920 --> 0:00:19.279 Welcome to Bloomberg Opinion. I'm Amy Morris. This week we 0:00:19.360 --> 0:00:22.320 look at the booming weight loss drug market. You've heard 0:00:22.360 --> 0:00:25.720 of some drugs that are designed to treat diabetes, but 0:00:25.840 --> 0:00:30.160 they have a desirable side effect, significant weight loss. Now 0:00:30.200 --> 0:00:32.680 there are new drugs on the market, with more on 0:00:32.760 --> 0:00:36.840 the way. We'll talk with Bloomberg's Lisa Jarvis. Later. We'll 0:00:36.880 --> 0:00:40.280 look at the upcoming presidential election and what it means 0:00:40.360 --> 0:00:44.200 if it becomes another ballot box battle between President Biden 0:00:44.320 --> 0:00:48.239 and former President Trump. Bloomberg's Clive Crook explains why that 0:00:48.400 --> 0:00:52.879 scenario may prove to be bad for American democracy. And 0:00:52.960 --> 0:00:56.160 then a deeper dive into the little blue check mark. 0:00:56.400 --> 0:01:01.160 Bloomberg's Allison Schraeger explains that Twitter's blue chet, which meant 0:01:01.160 --> 0:01:04.920 that the user is authentic or verified, now might no 0:01:05.000 --> 0:01:08.640 longer be the coveted status it once was. We begin 0:01:08.720 --> 0:01:12.840 with the fed right hikes and banking turmoil this past week, 0:01:12.880 --> 0:01:16.640 fed share J. Powell said they're watching inflation, which has 0:01:16.720 --> 0:01:20.400 cooled somewhat, but not quite enough. Not yet. 0:01:20.560 --> 0:01:24.800 Inflation has moderated somewhat since the middle of last year. Nonetheless, 0:01:24.880 --> 0:01:28.360 inflation pressures continue to run high, and the process of 0:01:28.360 --> 0:01:31.560 getting inflation back down to two percent has a long 0:01:31.600 --> 0:01:32.039 way to go. 0:01:32.400 --> 0:01:35.840 And he touched on concerns over the banking turmoil, which 0:01:35.880 --> 0:01:39.360 regained some momentum after the takeover of First Republic Bank. 0:01:39.640 --> 0:01:43.479 I think that the resolution and sale of First Republic 0:01:43.640 --> 0:01:46.120 is an important step toward drawing a line under that 0:01:46.200 --> 0:01:47.760 period of severe stress. 0:01:47.760 --> 0:01:51.880 Bloomberg Opinion columnist Paul Davies covers banking and finance and 0:01:52.040 --> 0:01:55.640 joins me. Now, Paul, let's talk first about share Powell's 0:01:55.720 --> 0:01:59.320 opening remarks. If you saw them as less hawkish than 0:01:59.320 --> 0:02:00.240 we heard back in. 0:02:00.080 --> 0:02:01.520 March, Yeah, that's right. 0:02:01.560 --> 0:02:07.240 I think that you know, things have changed obviously compared 0:02:07.240 --> 0:02:09.000 to where we were in March. I mean, I think 0:02:09.120 --> 0:02:11.880 you know, inflation numbers are still high and employment is 0:02:11.919 --> 0:02:14.840 still very high, so that the kind of the main 0:02:14.880 --> 0:02:18.040 things that they're targeting aren't necessarily moving in the way 0:02:18.040 --> 0:02:20.440 that they would want them to. But we have had 0:02:20.560 --> 0:02:25.800 this banking turmoil since then, with several banks collapsing, first 0:02:25.800 --> 0:02:27.720 Republic Banks, in the Coon Valley Bank and so on, 0:02:28.400 --> 0:02:32.280 and that brings concerns that there will be a significant 0:02:32.800 --> 0:02:36.640 contraction in lending, in kind of credit provision to the economy. 0:02:36.680 --> 0:02:38.640 And that's kind of, I guess, one of the main 0:02:38.760 --> 0:02:42.560 ways in which sort of monetary policy ultimately feeds through 0:02:42.639 --> 0:02:47.480 into economic activity and employment levels, inflation and all. 0:02:47.360 --> 0:02:48.040 That sort of stuff. 0:02:48.080 --> 0:02:51.080 So, you know, he was expected to be a bit 0:02:51.200 --> 0:02:53.920 less hawkish certainly. I mean, some people might have been 0:02:53.919 --> 0:02:56.400 thinking he was going to be even less hawkish than 0:02:56.440 --> 0:02:58.320 he actually was in the end, really. 0:02:59.000 --> 0:03:01.880 And overall, US markets really want some clarity about what 0:03:02.000 --> 0:03:05.240 may be to come. But Powell gave those conditional answers. 0:03:05.240 --> 0:03:07.880 Who's very nuanced or more nuanced. 0:03:07.520 --> 0:03:10.400 Rather, Yeah, Well, it's a very we're at a very 0:03:10.440 --> 0:03:13.120 tricky point, I guess, in terms of judging what's going 0:03:13.200 --> 0:03:17.640 to happen next. As I say, these bank collapses have 0:03:17.800 --> 0:03:21.280 brought significant worries that will see a major credit crunch, 0:03:21.320 --> 0:03:23.440 and I kind of I wrote a piece back in 0:03:23.800 --> 0:03:27.799 March after Credits Sweet collapsed in Europe and after the 0:03:28.120 --> 0:03:32.560 first bank collapses in the US, where I was saying, essentially, 0:03:32.600 --> 0:03:34.320 you know when you when you put a bunch of 0:03:34.360 --> 0:03:37.120 interest rate rises through, nothing seems to happen for a 0:03:37.160 --> 0:03:39.640 long time, and then suddenly they all can hit at once. 0:03:39.800 --> 0:03:41.840 It's like it's like an elastic band, kind of like 0:03:41.920 --> 0:03:45.920 pinging back towards you. And that's because and what that 0:03:46.040 --> 0:03:49.080 means is you get a sudden kind of tightening of 0:03:49.120 --> 0:03:52.680 financial conditions, a sudden tightening of the amount of credit 0:03:52.720 --> 0:03:55.600 that's available, and that's going to have a big effect 0:03:55.720 --> 0:03:57.800 on what the concern is. That's going to have a 0:03:57.840 --> 0:04:00.360 big effect on demand in the economy. 0:04:00.680 --> 0:04:03.920 There was some conventional wisdom that regional banking turmoil would 0:04:03.960 --> 0:04:07.280 raise the possibility that the FED might pivot toward lower rates. 0:04:08.320 --> 0:04:11.680 Where do you sense that stands at this point? 0:04:12.560 --> 0:04:14.760 Well, I think what they're doing is I mean, he 0:04:15.000 --> 0:04:18.240 signaled a sort of a pause yesterday. He didn't signal 0:04:18.240 --> 0:04:22.960 a pause in quite as certain and as definite a 0:04:22.960 --> 0:04:26.279 way as markets might have wanted. But it's the right 0:04:26.520 --> 0:04:28.960 thing to do at this point, I think is to 0:04:30.360 --> 0:04:32.919 try and is to give yourself some space. 0:04:33.040 --> 0:04:35.080 Is the FED to give it self some space. 0:04:35.080 --> 0:04:38.440 To wait and see what happens with the banks from 0:04:38.480 --> 0:04:41.360 now on what happens with stability in the sector. I mean, 0:04:41.400 --> 0:04:44.359 he said several times that the sector is strong and 0:04:44.400 --> 0:04:48.480 stable and what have you, and sound and bank executives 0:04:48.520 --> 0:04:51.160 that have been reporting results, they have been saying much 0:04:51.200 --> 0:04:55.920 the same thing. Jamie Diamond when they took over. When 0:04:56.000 --> 0:05:00.919 JP Morgan which he runs, took over First Republic, was 0:05:01.000 --> 0:05:02.800 very clear in saying he thought this was the end 0:05:02.800 --> 0:05:04.120 of the banking turmoil. 0:05:04.520 --> 0:05:05.640 But we are still. 0:05:05.400 --> 0:05:10.040 Seeing some smaller banks suffer, you know, terribly in the market, 0:05:10.080 --> 0:05:14.240 and there may well be more you know, failures or 0:05:14.279 --> 0:05:17.320 more kind of takeovers of some kind that need to happen. 0:05:17.400 --> 0:05:20.800 So it's a kind of it's a moment where, like 0:05:20.880 --> 0:05:24.000 I say, inflation is still high, employment is still very high, 0:05:24.080 --> 0:05:27.040 the economy is strong enough, but all of this banking 0:05:27.040 --> 0:05:30.080 turmoil in the background is definitely due to higher rates, 0:05:30.120 --> 0:05:33.200 and it's just sort of trying to you know, it's 0:05:33.520 --> 0:05:36.480 impossible to say exactly how this is all going to unfold, 0:05:36.560 --> 0:05:38.559 and the only thing to do really for a central 0:05:38.600 --> 0:05:40.960 bank is to just kind of try and stand back 0:05:40.960 --> 0:05:43.600 for a bit and just sort of watch the numbers 0:05:43.600 --> 0:05:44.840 and sort of see what happens. 0:05:45.200 --> 0:05:48.159 Can I ask you a Layman's question with this, because 0:05:48.360 --> 0:05:51.880 it seems like throughout this entire process with the banking 0:05:51.880 --> 0:05:54.880 turmoil or regional banking turmoil, you know, we saw what 0:05:55.040 --> 0:05:57.640 happened with Silicon Valley Bank and we heard, oh, this 0:05:57.680 --> 0:06:00.120 is an isolated incident, this is within itself. And we 0:06:00.160 --> 0:06:02.840 saw something similar with Signature Bank and they said, oh no, no, no, 0:06:02.880 --> 0:06:06.200 that's because of something completely different, isolated incident. And then 0:06:06.240 --> 0:06:09.000 of course First Republic Bank, and we're not even talking 0:06:09.040 --> 0:06:12.920 about Credit Sue, but we're seeing all these little isolated 0:06:12.960 --> 0:06:18.160 incidents happening and throughout let's just say throughout the US definitely, 0:06:19.120 --> 0:06:21.360 and not exactly at the same time. But it seems 0:06:21.480 --> 0:06:25.719 domino like, how long before we finally start to connect 0:06:25.760 --> 0:06:27.720 these dots and say, you know what, maybe there's some 0:06:27.839 --> 0:06:28.320 there there. 0:06:29.720 --> 0:06:31.960 Yeah, well, that's a very good question. 0:06:32.160 --> 0:06:35.320 I mean, I think there is definitely a common thread 0:06:35.520 --> 0:06:39.000 to these banking issues, and it's all to do with 0:06:39.880 --> 0:06:44.960 higher rates depositors looking for more attractive returns elsewhere in 0:06:45.120 --> 0:06:47.719 money market funds and even sort of treasury bonds and 0:06:47.720 --> 0:06:52.080 this sort of thing, and the kinds of assets that 0:06:52.160 --> 0:06:54.240 a lot of these banks have invested in which aren't 0:06:54.279 --> 0:06:57.640 necessarily the same assets, but many of them behave the 0:06:57.680 --> 0:07:00.720 same way in the sense that they lose value when 0:07:00.839 --> 0:07:04.880 interest rates rise. So you know, there has been a 0:07:04.960 --> 0:07:08.719 theme to these collapses, and you know the current banks 0:07:08.720 --> 0:07:13.800 that are under pressure most pressure. Packwest for example, doesn't 0:07:13.880 --> 0:07:16.200 seem to have exactly the same sort of issues at all, 0:07:16.680 --> 0:07:17.240 certainly on. 0:07:17.200 --> 0:07:18.120 The asset side. 0:07:18.520 --> 0:07:21.600 But again, if it does get into trouble, and if 0:07:21.640 --> 0:07:23.920 we re look at all the bansheet and everything. 0:07:23.640 --> 0:07:27.600 Else after it, you know, is after it fails. 0:07:27.600 --> 0:07:30.360 If it does fail, then we may well kind of 0:07:31.000 --> 0:07:33.400 see how it fits into the same sort of narrative. 0:07:33.440 --> 0:07:38.680 After all, markets generally have a way of looking for 0:07:38.720 --> 0:07:41.880 the next weakest link in the chain whenever you get 0:07:41.880 --> 0:07:44.880 a series of problems and kind of going after that 0:07:44.920 --> 0:07:47.800 week link and seeing if it falls over. And I 0:07:47.840 --> 0:07:52.560 guess we won't know that this crisis is over until 0:07:53.280 --> 0:07:56.120 the last week link that the market goes after doesn't break. 0:07:57.120 --> 0:08:00.000 And we are talking to Bloomberg opinion columnist Paul Data 0:08:00.280 --> 0:08:03.400 about the FED rate hikes and banking turmoil. I want 0:08:03.440 --> 0:08:06.200 to build on something that you just said about being 0:08:06.240 --> 0:08:09.720 the weak link. Does that then indicate we may be 0:08:09.880 --> 0:08:13.480 bound to see more failures in the regional banking system. 0:08:13.920 --> 0:08:16.440 What sort of risks are we looking at and what 0:08:16.480 --> 0:08:17.520 are you looking for? 0:08:18.800 --> 0:08:21.800 So I guess we're looking for, you know, more deposit 0:08:21.880 --> 0:08:26.840 flight or continued deposit flights from smaller banks to larger banks. 0:08:26.960 --> 0:08:28.120 I guess you know. 0:08:28.080 --> 0:08:30.920 You'd also be looking for any of the smaller banks 0:08:30.920 --> 0:08:34.280 that have a very large share of uninsured deposits in 0:08:34.320 --> 0:08:36.960 the same way that some of these others have done. 0:08:37.559 --> 0:08:40.480 And then the other thing obviously that we will be 0:08:40.559 --> 0:08:43.320 watching and that you'll continue to watch, is you know, 0:08:43.720 --> 0:08:47.320 falling share prices, and you know, the extent to which 0:08:47.320 --> 0:08:49.960 some of these smaller banks have to compete for the 0:08:50.000 --> 0:08:53.240 funding that they get through deposits and other means, you know, 0:08:53.360 --> 0:08:55.000 they have to pay more money for that, and that 0:08:55.040 --> 0:08:58.440 has an impact on profitability, and this can become you know, 0:08:58.480 --> 0:09:01.240 for all of these banks, and especially for smaller banks 0:09:01.240 --> 0:09:03.880 that are less diversified, it can become a. 0:09:03.920 --> 0:09:06.640 Sort of a you know, a really difficult. 0:09:06.200 --> 0:09:09.880 Spiral to get out of, because you know, falling profitability 0:09:10.040 --> 0:09:13.880 leads to a collapsing share price, which worries you know, 0:09:13.960 --> 0:09:17.120 depositors because they see the market saying that their bank 0:09:17.160 --> 0:09:19.760 is weak, so maybe they start pulling their deposits out, 0:09:20.000 --> 0:09:24.000 which means even higher funding costs, which means even greater 0:09:24.040 --> 0:09:26.600 squeeze on profits, which means even more of a problem 0:09:26.600 --> 0:09:27.319 for the share price. 0:09:27.440 --> 0:09:29.439 And it's that kind of it's a circle that keeps. 0:09:29.240 --> 0:09:31.640 Going round around and can keep getting worse, and that 0:09:32.320 --> 0:09:34.880 might be what starts happening to some of these other 0:09:34.960 --> 0:09:39.280 smaller banks next that don't necessarily have exactly the same 0:09:39.320 --> 0:09:41.880 problems that you know, Silicon Valley Bank and First Republic 0:09:41.920 --> 0:09:44.640 Bank had, but can get into these sort of downward 0:09:44.720 --> 0:09:48.400 spirals because of that interaction of funding costs, profitability and 0:09:48.440 --> 0:09:49.280 share price balls. 0:09:49.480 --> 0:09:51.520 Okay, well, then let's put it all together and tie 0:09:51.520 --> 0:09:53.800 it up with a little bow. Any final thoughts on 0:09:53.840 --> 0:09:56.240 the economy, whether we're likely to see a slow down 0:09:56.320 --> 0:09:58.280 or something more substantial in the coming. 0:09:58.000 --> 0:10:02.000 Months, Well, I guess it. It's a very tense, tense 0:10:02.080 --> 0:10:06.960 and quite finely poised moment. In many ways, we just 0:10:07.040 --> 0:10:10.160 have to kind of like, you know, watch and see 0:10:10.160 --> 0:10:14.000 what happens. There's lots of talk about you know, stepping 0:10:14.000 --> 0:10:17.320 in and ensuring many more deposits, or ensuring all deposits, all. 0:10:17.200 --> 0:10:17.840 This sort of thing. 0:10:18.360 --> 0:10:20.200 I personally think that would be a mistake for reasons 0:10:20.200 --> 0:10:22.040 that are probably too lengthy to go into right now, 0:10:23.160 --> 0:10:26.040 and anyway, and if we were going to do something 0:10:26.080 --> 0:10:28.160 like that, it would probably be take too long to 0:10:29.320 --> 0:10:31.440 put it into place to kind of stop, you know, 0:10:31.800 --> 0:10:33.880 this minibanking crisis that we're currently having. 0:10:34.360 --> 0:10:34.800 Anyway. 0:10:35.040 --> 0:10:39.040 So yeah, it's a very tense and finally poised time, 0:10:39.280 --> 0:10:42.560 and it's really uncertain as to exactly how it's going 0:10:42.640 --> 0:10:43.160 to play out. 0:10:43.600 --> 0:10:45.640 Paul, thank you so much for taking the time with us. 0:10:45.720 --> 0:10:50.040 It is always a pleasure. Thank you, Bloomberg Opinion columnist 0:10:50.080 --> 0:10:52.800 Paul Davies. Just ahead, we take a look at one 0:10:52.880 --> 0:10:56.439 sector of the pharmaceutical industry that's got the market's attention, 0:10:56.640 --> 0:10:59.760 weight loss drugs. Bloomberg's Lisa Jarvis joins us. In just 0:10:59.800 --> 0:11:02.319 a few minutes. You're listening to Bloomberg Opinion. 0:11:10.800 --> 0:11:14.800 You're listening to the Bloomberg Opinion podcast Contest Saturdays at 0:11:14.800 --> 0:11:17.920 one and seven pm Eastern on Bloomberg dot Com, the 0:11:18.000 --> 0:11:21.120 iHeartRadio app, and the Bloomberg Business App, or listen on 0:11:21.200 --> 0:11:23.280 demand wherever you get your podcasts. 0:11:25.600 --> 0:11:28.360 You're listening to Bloomberg Opinion. I'm Amy Morris, and by 0:11:28.440 --> 0:11:31.280 now you've heard of these weight loss drugs, they weren't 0:11:31.280 --> 0:11:35.559 really intended to be weight loss drugs. Dominating the obesity market. 0:11:35.800 --> 0:11:39.400 The drug commonly known as ozempic, designed to treat diabetes, 0:11:39.679 --> 0:11:42.320 has become so popular for people trying to lose weight. 0:11:42.400 --> 0:11:44.800 It's getting harder for diabetics to get their hands on 0:11:44.840 --> 0:11:47.760 the drug. And now we're learning that Eli Lilly has 0:11:47.840 --> 0:11:51.840 another drug in the pipeline called Munjaro that helps people 0:11:51.840 --> 0:11:55.160 with diabetes lose a significant amount of weight. Let's get 0:11:55.160 --> 0:11:59.360 more on this. Bloomberg Opinion columnist Lisa Jarvis covers biotech, healthcare, 0:11:59.559 --> 0:12:02.199 and the far parmaceutical industry. She joins us now to 0:12:02.400 --> 0:12:05.440 sort of walk us through all of this. Lisa, always 0:12:05.440 --> 0:12:07.640 a pleasure. I want to thank you for joining us today. 0:12:08.400 --> 0:12:14.960 This drug not Ozambic, but Monjaro is currently marketed for diabetes. 0:12:15.080 --> 0:12:17.720 Is that right? Or is this specifically for weight loss? 0:12:19.080 --> 0:12:21.480 That's right, and thank you for having me Amy. It 0:12:21.559 --> 0:12:24.920 is currently marketed for diabetes. It was approved last summer. 0:12:25.960 --> 0:12:28.720 But we know that this class of drugs, which is 0:12:28.760 --> 0:12:32.640 called glp ones, they mimic hormones in our body and 0:12:33.520 --> 0:12:37.480 essentially make reduce your appetite. They have result in this 0:12:37.520 --> 0:12:39.920 feeling of safety and so people lose a lot of 0:12:39.960 --> 0:12:42.720 weight on them and so they have been developing it 0:12:42.760 --> 0:12:47.880 in tandem for diabetes and for weight loss. There was 0:12:47.920 --> 0:12:51.520 a lot of excitement starting last year in April, like 0:12:51.640 --> 0:12:53.920 Lily came out with a phase three trial in people 0:12:53.960 --> 0:12:56.800 with obesities showing that the drug could help them lose 0:12:56.920 --> 0:13:00.440 over twenty percent of their body weight, which was by 0:13:00.480 --> 0:13:03.319 far the highest we've seen any of weight loss drug 0:13:03.600 --> 0:13:06.440 kind of in history, and you know, is on par 0:13:06.760 --> 0:13:09.319 with bariatric surgery. And so that's one of the reasons 0:13:09.320 --> 0:13:12.280 that there's so much excitement around this class of drugs. 0:13:12.440 --> 0:13:15.400 So would they be willing to test it not only 0:13:15.400 --> 0:13:17.560 for diabetes, because as you say, it was already approved 0:13:17.559 --> 0:13:19.200 for that, but now they have to go through an 0:13:19.320 --> 0:13:22.480 entire new testing process to make sure it's safe for 0:13:22.559 --> 0:13:24.440 weight loss specifically. 0:13:24.640 --> 0:13:27.720 That's right. So they did diabetes first. I think that's 0:13:27.800 --> 0:13:31.760 like a well known FDA kind of trajectory. And in 0:13:31.800 --> 0:13:34.520 the diabetes trial, you know, a side effect is weight loss. 0:13:34.880 --> 0:13:37.560 And they've been running these very large trials, I mean 0:13:37.640 --> 0:13:42.840 thousands of people in weight loss because the market with 0:13:43.000 --> 0:13:45.840 drugs that actually work has the potential to be huge. 0:13:46.120 --> 0:13:51.240 I think some of the forecasts are pretty pretty mind boggling. 0:13:51.480 --> 0:13:55.000 Fifty four billion dollars by twenty thirty is what one 0:13:55.080 --> 0:13:57.760 analyst forecast to the weight loss drug market could be 0:13:57.840 --> 0:14:01.679 for this class. So they are expected to see approval 0:14:01.720 --> 0:14:04.120 by the end of this year for this drug and 0:14:05.000 --> 0:14:07.840 weight loss. There's already one other drug on the market, 0:14:07.960 --> 0:14:10.000 so we hear a lot about ozen Pic that's actually 0:14:10.000 --> 0:14:13.440 a diabetes drug. That same drug at a higher dose, 0:14:13.559 --> 0:14:15.960 the same ingredient in that drug is sold as we 0:14:16.040 --> 0:14:21.040 go Vy, and that has already been kind of going 0:14:21.120 --> 0:14:24.040 like gang busters. And so Eli Lely's drug will be 0:14:24.080 --> 0:14:26.400 formally approved, likely in weight loss, by the end of 0:14:26.400 --> 0:14:28.080 this year and go up against wegov. 0:14:28.560 --> 0:14:31.520 Are there any concerns for people who may be taking 0:14:31.560 --> 0:14:35.400 these drugs? I mean, they're tested, but they're they're also 0:14:35.600 --> 0:14:39.680 kind of untested, you know, out in the right I think. 0:14:39.840 --> 0:14:42.160 I mean, well, my main concern is that a lot 0:14:42.160 --> 0:14:44.200 of people are taking them off label, and by that 0:14:44.320 --> 0:14:47.480 I mean that right now, when they've been in shortage, 0:14:47.520 --> 0:14:50.040 there's this potential for you to go to a telehealth 0:14:50.720 --> 0:14:53.440 provider and get them prescribed to you. You may or 0:14:53.440 --> 0:14:57.040 may not actually fit into the kind of guidelines that 0:14:57.080 --> 0:15:00.960 the FDA has approved them under. Who knows how much 0:15:01.000 --> 0:15:03.640 actual guidance you're getting for how to take them. They 0:15:03.640 --> 0:15:06.960 have side effects, like some people can't tolerate them, and 0:15:07.000 --> 0:15:09.280 really you're supposed to ramp up on them very slowly. 0:15:09.680 --> 0:15:12.400 But you know, if you stop taking them, the weight 0:15:12.440 --> 0:15:14.440 we'll come back. And I think one of the concerns 0:15:14.520 --> 0:15:16.760 is like, you know, what do we know about long 0:15:16.880 --> 0:15:19.280 term use of this. There's been a lot of media 0:15:19.320 --> 0:15:21.640 attention on this class of drugs and what we do 0:15:21.680 --> 0:15:23.720 and do not know, and would really like to know 0:15:23.840 --> 0:15:25.720 if we're going to have people taking them for the 0:15:25.760 --> 0:15:26.400 long term. 0:15:26.520 --> 0:15:29.200 Okay, so then who are these drugs for? 0:15:29.840 --> 0:15:33.320 So right now, they're for people with a BMI above 0:15:33.360 --> 0:15:36.000 a certain level, or a BMI above a certain level 0:15:36.000 --> 0:15:38.440 who have another risk factor let's say they have high 0:15:38.480 --> 0:15:41.800 cholesterol or at risk of having diabetes or have diabetes. 0:15:43.000 --> 0:15:47.040 But I think that you know, we also know from 0:15:47.280 --> 0:15:51.000 TikTok and social media that celebrities are taking them as 0:15:51.040 --> 0:15:53.480 a quick fix. That's the rumor. At least I don't 0:15:53.480 --> 0:15:56.360 want that, but celebrities are supposedly taking them as a 0:15:56.440 --> 0:15:59.680 quick fix to lose weight. For you know, an event 0:15:59.680 --> 0:16:03.040 that they're going to, and I think the regular you know, 0:16:03.600 --> 0:16:06.440 public is interested in them for this type of purpose. 0:16:07.480 --> 0:16:10.120 That is making it hard for people with diabetes to 0:16:10.120 --> 0:16:13.040 get them, which is also a problem because I think 0:16:13.160 --> 0:16:16.960 the companies just didn't anticipate the swell of immediate demand 0:16:17.160 --> 0:16:20.560 and they just in the beginning couldn't make enough of them. 0:16:20.800 --> 0:16:23.520 Lisa, in your column on the Bloomberg Terminal, you talk 0:16:23.560 --> 0:16:27.160 a bit about the sales goals for these drugs. What 0:16:27.320 --> 0:16:29.600 will it take to achieve the goals that they have 0:16:29.680 --> 0:16:30.200 set forth? 0:16:30.680 --> 0:16:34.400 I think really two things. You know, one is convincing 0:16:34.480 --> 0:16:37.800 insurers to cover them. The drugs are not cheap right now. 0:16:37.920 --> 0:16:40.160 They cost over ten thousand dollars a year if you 0:16:40.200 --> 0:16:44.200 were to pay for them out of pocket, and amazingly 0:16:44.480 --> 0:16:46.360 some people are willing to pay that, but you know, 0:16:46.440 --> 0:16:50.880 it's not sustainable for most people, and so some private 0:16:50.880 --> 0:16:54.000 insurers will cover them. It can go take a battle. 0:16:54.080 --> 0:16:57.760 I know that some telehealth companies have emerged almost with 0:16:58.280 --> 0:17:00.720 the intent of being the person that goes to battle 0:17:00.760 --> 0:17:02.920 with your insurance company to try to get them covered 0:17:02.960 --> 0:17:06.080 for you. Right now, Medicare is not covering them at all, 0:17:07.320 --> 0:17:10.600 which there's a lot of you know, controversy over whether 0:17:10.640 --> 0:17:13.159 they should be covered. On the one hand, if it 0:17:13.200 --> 0:17:17.159 does improve health outcomes, that would save our healthcare system 0:17:17.200 --> 0:17:19.200 in the long run, and the other there have been 0:17:19.200 --> 0:17:22.800 some estimates about the incredible burden these trucks can have 0:17:22.880 --> 0:17:26.800 on our healthcare system if Medicare did cover them, stay Medicaid. 0:17:26.840 --> 0:17:31.000 It's been patchwork, and so there's a bill that the 0:17:31.080 --> 0:17:35.159 companies have been trying to put forward around getting these covered. 0:17:35.520 --> 0:17:37.679 But I think the other big thing is really proving 0:17:38.040 --> 0:17:42.080 that when you lose weight it improves your long term health. 0:17:42.160 --> 0:17:45.240 People have that people have fewer heart attacks and strokes 0:17:45.280 --> 0:17:47.960 and live longer, and that's the companies are running very 0:17:48.000 --> 0:17:50.040 big trials right now to try to show that. We 0:17:50.119 --> 0:17:54.080 won't know that answer to those questions for another you know, 0:17:54.119 --> 0:17:55.399 one to three years. 0:17:55.440 --> 0:17:58.600 Though, it seems like this has the potential and set 0:17:58.600 --> 0:18:00.760 me straight if I'm wrong, Lisa, this would have the 0:18:00.800 --> 0:18:06.840 potential for completely redesigning and forgive the term, but disrupting 0:18:06.920 --> 0:18:07.920 the weight loss. 0:18:07.680 --> 0:18:12.080 Market, oh for sure. And we saw that recently when 0:18:12.240 --> 0:18:16.800 we saw weight Watchers acquire a company Sequence that you 0:18:16.800 --> 0:18:19.640 know is a telehealth company that is prescribing these drugs. 0:18:19.680 --> 0:18:22.600 It was an admission for the first time that diet 0:18:22.760 --> 0:18:25.600 is probably diet alone is not enough for many people, 0:18:26.000 --> 0:18:30.040 and that these companies, these dinosaurs like weight watchers, are 0:18:30.160 --> 0:18:35.080 gonna die off if they don't adapt. And so, you know, 0:18:35.200 --> 0:18:37.639 I think it is changing the paradigm, good or bad. 0:18:37.880 --> 0:18:40.320 You know, there's lots of different opinions on whether that's 0:18:40.960 --> 0:18:42.919 you know, we all should be taking medicines or not 0:18:43.760 --> 0:18:45.000 for weight loss. 0:18:44.760 --> 0:18:44.920 But. 0:18:46.400 --> 0:18:50.000 You know it is, it is a sea change because 0:18:50.000 --> 0:18:53.440 we've never seen drugs the kind of closest I think 0:18:53.480 --> 0:18:56.440 are the drugs that could you know, people could lose 0:18:56.480 --> 0:18:59.159 five percent of body weight, which is much different. You know, 0:18:59.200 --> 0:19:02.040 that's a much small amounts. Those still could be an 0:19:02.080 --> 0:19:03.399 amount that could affect your health. 0:19:03.720 --> 0:19:05.719 And we're going to continue to watch it because we 0:19:05.760 --> 0:19:07.960 want to see how the people who are using it 0:19:08.480 --> 0:19:11.560 fair over the next five to ten years, the long gain, 0:19:11.680 --> 0:19:14.800 the long term use of this product. You know, how 0:19:15.160 --> 0:19:17.159 are how are how does their body handle it? 0:19:18.560 --> 0:19:21.720 That's right, I mean, and I think you know, another 0:19:22.160 --> 0:19:25.360 issue is that if you go off the drugs, you're 0:19:25.440 --> 0:19:27.159 likely to lose weight. There's a lot of things that 0:19:27.200 --> 0:19:29.280 are in development coming up behind them, and so I 0:19:29.280 --> 0:19:32.480 think there are questions can you take them less frequently? 0:19:32.680 --> 0:19:35.679 You know, what are ways that we can change, not 0:19:35.880 --> 0:19:38.240 just you know what we already have, but change the 0:19:38.320 --> 0:19:43.920 paradigm going forward so that it feels more accessible and 0:19:43.960 --> 0:19:46.040 more possible for people to be on these for the 0:19:46.080 --> 0:19:48.960 long term. So that's that's There's a lot more to come. 0:19:49.000 --> 0:19:52.160 This is a huge area of investment for pharma. Everyone's 0:19:52.160 --> 0:19:54.919 seeing what's happening with these two first drugs and trying 0:19:54.920 --> 0:19:57.639 to put their own stake in the ground. 0:19:58.040 --> 0:19:59.679 We're going to keep watching it with you. 0:19:59.760 --> 0:19:59.920 Lis. 0:20:00.200 --> 0:20:02.360 Thank you so much for following this, and we want 0:20:02.400 --> 0:20:05.000 to keep in touch with you as there are developments 0:20:05.040 --> 0:20:07.800 in this part of the industry. Thanks so much, Thank 0:20:07.840 --> 0:20:11.000 you for having me. Lisa Jarvis is a Bloomberg Opinion 0:20:11.040 --> 0:20:14.920 columnist who covers biotech, healthcare, and the pharmaceutical industry. Now 0:20:14.960 --> 0:20:17.560 stay with us. Coming up on Bloomberg Opinion, we'll take 0:20:17.560 --> 0:20:19.760 a closer look at how the twenty twenty four race 0:20:19.800 --> 0:20:22.520 for the White House is shaking out and what might 0:20:22.640 --> 0:20:26.680 signal some very real issues with American democracy. And don't 0:20:26.680 --> 0:20:29.720 forget We're available as a podcast on Apple, Spotify, or 0:20:29.760 --> 0:20:33.199 your favorite podcast platform. This is Bloomberg Opinion. 0:20:42.280 --> 0:20:46.119 You're listening to the Bloomberg Opinion podcast. Catch us Saturdays 0:20:46.119 --> 0:20:49.280 at one and seven pm Eastern on Bloomberg dot Com, 0:20:49.359 --> 0:20:52.480 the iHeartRadio app, and the Bloomberg Business App, or listen 0:20:52.560 --> 0:20:54.760 on demand wherever you get your podcasts. 0:20:57.240 --> 0:21:00.639 This is Bloomberg Opinion. I Amy Morris It. I feel 0:21:00.680 --> 0:21:03.480 like the twenty twenty four presidential election is right around 0:21:03.480 --> 0:21:06.199 the corner. But you know, a lot can happen between 0:21:06.320 --> 0:21:10.160 then and now. President Biden has continued to address concerns 0:21:10.280 --> 0:21:11.080 about his age. 0:21:11.320 --> 0:21:14.119 Every bloody running for reelection, and this time has been 0:21:14.160 --> 0:21:14.960 in the same position. 0:21:15.040 --> 0:21:16.080