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Taylor Swift: Live Nation exec will face lawmakers about concert tickets fiasco


New York
CNN
 — 

Lawmakers are set to grill top executives from the event ticketing industry on Tuesday after Ticketmaster’s inability to process orders for Taylor Swift’s upcoming tour left millions of fans unable to buy tickets or without their ticket even after purchase.

Joe Berchtold, the president and CFO of Ticketmaster parent company Live Nation Entertainment, is set to testify before a Senate committee on Tuesday, two months after the Swift ticketing fiasco reignited public scrutiny of the industry. Jack Groetzinger, CEO of ticketing platform SeatGeek, is also scheduled to testify at the hearing.

Tickets for Swift’s new five-month Eras Tour – which kicks off March 17 and will have 52 concerts in multiple stadiums across the United States – went on sale on Ticketmaster in mid November. Heavy demand snarled the ticketing site, infuriating fans who couldn’t snag tickets. Customers complained about Ticketmaster not loading, saying the platform didn’t allow them to access tickets, even if they had a pre-sale code for verified fans.

Unable to resolve the problems, Ticketmaster subsequently canceled Swift’s concert ticket sales to the general public, citing “extraordinarily high demands on ticketing systems and insufficient remaining ticket inventory to meet that demand.”

As fury grew among legions of hardcore Swifties, Swift herself weighed in on the fiasco. “It goes without saying that I’m extremely protective of my fans,” Swift wrote on Instagram in November. “It’s really difficult for me to trust an outside entity with these relationships and loyalties, and excruciating for me to just watch mistakes happen with no recourse.”

As a result, the US Senate Judiciary Committee has scheduled the hearing on Tuesday, titled “That’s The Ticket: Promoting Competition and Protecting Consumers in Live Entertainment” to examine the lack of competition in the ticketing industry.

“The issues within America’s ticketing industry were made painfully obvious when Ticketmaster’s website failed hundreds of thousands of fans hoping to purchase tickets for Taylor Swift’s new tour, but these problems are not new,” Sen. Amy Klobuchar, who sits on the committee, said in a statement about the hearing. “We will examine how consolidation in the live entertainment and ticketing industries harms customers and artists alike. Without competition to incentivize better services and fair prices, we all suffer the consequences.”

In his prepared opening remarks, Berchtold blamed “industrial scalpers” for recent online ticketing snafus and called for legislation to rein in those bad actors. Ticketmaster, he said, was “hit with three times the amount of bot traffic than we had ever experienced” amid the “unprecedented demand for Taylor Swift tickets.” The bot activity “required us to slow down and even pause our sales. This is what led to a terrible consumer experience that we deeply regret.”

“As we said after the onsale, and I reiterate today, we apologize to the many disappointed fans as well as to Ms. Swift,” he said in the opening remarks. Berchtold also noted some things the service could have done differently “in hindsight,” including “staggering the sales over a longer period of time and doing a better job setting fan expectations for getting tickets.”

In addition to the executives, the committee said witnesses at the hearing will include Jerry Mickelson, CEO of Jam Productions, one of the largest producers of live entertainment, and singer-songwriter Clyde Lawrence.

Lawrence, who has composed music for motion pictures including the Disney+ holiday comedy movie “Noelle,” wrote an opinion piece for The New York Times in December titled “Taylor Swift’s Live Nation Debacle Is Just the Beginning,” in which he criticized Live Nation for allegedly being a monopoly and detrimental to artists.

“Whether it meets the legal definition of a monopoly or not, Live Nation’s control of the live music ecosystem is staggering,” he wrote.

Criticism of Ticketmaster’s dominance dates back decades, but the Swift ticketing incident has once again turned that issue into a dinner table discussion at many households.

Concert promoter Live Nation and ticketing company Ticketmaster, two of the largest companies in the concert business, announced their merger in 2009. The deal at the time raised concerns, including from the US Department of Justice, that it would create a near-monopoly in the industry.

The Justice Department allowed the Live Nation-Ticketmaster merger to proceed despite a 2010 court filing in the case that raised objections to the merger. In the filing, the Justice Department said that Ticketmaster’s share among major concert venues exceeded 80%.

Ticketmaster disputes that market share estimate and says it holds at most just over 30% of the concert market, according to comments on NPR recently by Berchtold.

While irate fans were left scrambling to wade through the Swift ticket confusion, their collective anger caught lawmakers’ attention.

Members of Congress used the debacle to criticize Ticketmaster’s control of the live music industry, saying that because Ticketmaster dominates so heavily, it has no reason to make things better for the millions of customers who have no other choice.

“Ticketmaster’s power in the primary ticket market insulates it from the competitive pressures that typically push companies to innovate and improve their services,” Klobuchar, who chairs the antitrust subcommittee, wrote in an open letter to Ticketmaster’s CEO in November. “That can result in the types of dramatic service failures we saw this week, where consumers are the ones that pay the price.”

Senator Richard Blumenthal echoed Klobuchar’s concerns. He tweeted at the time that the tour “is a perfect example of how the Live Nation/Ticketmaster merger harms consumers by creating a near-monopoly.”

In December, lawmakers from the House Energy and Commerce Committee sent a letter to Live Nation CEO Michael Rapino, demanding a briefing on what went wrong and what steps the company is taking to fix the problems.

“The recent pre-sales ticketing process for Taylor Swift’s upcoming Eras tour – in which millions of fans endured delays, lockouts, and competition with aggressive scammers, scalpers and bots – raises concerns over the potential unfair and deceptive practices that face consumers and eventgoers,” the committee wrote in its letter.

The committee noted it had previously raised concerns about the industry’s business practices and said it wanted to meet with Rapino to discuss how the company processes tickets for concerts and major tours. It also wants answers about how Ticketmaster plans to improve in the future.

Brian A. Marks, a senior lecturer in the department of economics and business analytics at University of New Haven’s Pompea College of Business, said he would have liked Swift to make an appearance at the hearing.

“This hearing seems to be focused on Swift and what happened with the ticket sales. We also have to remember that Taylor Swift and her team negotiated a contract with Ticketmaster for sale of her concert ticket,” said Marks.

“Will Congress want to look at that contract? To me, what happened with the Swift concert tickets was not necessarily the result of Ticketmaster being the dominant player in the industry,” he said. Artists, and especially larger artists like Swift, “are free to elsewhere,” he said. “This point may get missed in tomorrow’s hearing.”

– CNN’s Frank Pallotta, Chris Isidore and David Goldman contributed to this story



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Indonesia: Warning issued over ‘dragon’s breath’ viral video trend



CNN
 — 

Indonesia is warning people against consuming liquid nitrogen after more than 20 children were harmed eating a street snack known as “dragon’s breath” that’s at the center of a dangerous new viral video trend.

The children suffered burns to their skin, severe stomach pains and food poisoning after consuming the colorful candies, according to Indonesia’s Ministry of Health, which is urging parents, teachers and local health authorities to be vigilant.

The candies are dipped in liquid nitrogen to create a vapor effect when eaten. They are popular with children, dozens of whom have uploaded clips to short-form video app TikTok showing them blowing the fumes out of their mouths, noses and ears. One video showing the preparation of the snack by a street vendor has been viewed close to 10 million times.

Around 25 children have been hurt consuming the candies, including two who were hospitalized, said the ministry’s director general Maxi Rein Rondonuwu. No deaths have been reported.

Using liquid nitrogen in food preparation is not illegal. Top chefs often use the vapors to create theatrical effects when serving dishes. It is clear, colorless and odorless, and commonly used in medical settings and as an ingredient to freeze food.

However, when not used properly, it can be hazardous.

”Liquid nitrogen is not only dangerous when consumed, it can cause severe breathing difficulties from nitrogen fumes that are inhaled over a long time,” Maxi said.

The first case was reported in July 2022, according to the ministry, when a child from a village in the Ponorogo Regency in East Java suffered cold burns on his skin after eating the snack.

More cases were reported in November and December, including a 4-year-old boy who was admitted to hospital in the capital Jakarta with severe stomach pain.

“Schools must educate children in the community about the dangers of liquid nitrogen in food (to) prevent more cases of severe food poisoning,” Maxi said.

– Source:
HLN
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New liquid nitrogen cereal sparks controversy

In 2018, the US Food and Drug Administration (FDA) issued safety alerts warning that serious injury could result from eating foods like ice cream, cereal or cocktails prepared with liquid nitrogen.

“Injuries have occurred from handling or eating products prepared by adding liquid nitrogen immediately before consumption, even after the liquid nitrogen has fully evaporated due to the extremely low temperature of the food,” the FDA said.

“This is a hazardous chemical compound,” said Clarence Yeo, a Singapore-based doctor. “It irritates the stomach and can cause burns in the mouth and esophagus. Children would be especially sensitive to (its effects) if it is eaten in large amounts.”

Yeo warned he “wouldn’t advise anyone to eat it.”

“You could end up in hospital and the worst case scenario could be organ damage,” he said.

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The steep plunge in used car prices — what it means, and what’s ahead


New York
CNN
 — 

Tracking used car prices is enough to give anyone whiplash.

Since the start of the pandemic and the resulting disruptions to new car supply chains first sent prices soaring, used car prices posted their largest annual increase on record – up 45% in the 12 months ending in June 2021, according to the Consumer Price Index – before swinging to a 12-month drop of 8.8% in the most recent reading for December.

That was the biggest 12-month plunge in prices for used cars since June 2009, when General Motors and Chrysler were both in bankruptcy proceedings and the economy was hemorrhaging a half-million jobs a month.

“It was a completely wild ride,” said Ivan Drury, director of insights at Edmunds.com Inc., an online resources for inventory and information on cars.

Data from Edmunds shows the average price of a used car purchase in December at $29,533, down nearly $1,600 from the record high of $31,095 reached in April 2022. Today’s average used car price is about the same as the average new car price as recently as 2010.

While the prices of late model used cars are down only 5% off their peak according according to Edmunds, the price of older used cars, those five years or older, have fallen 15% or more from their peaks early in 2022.

Experts say reasons for the decline include higher interest rates that make it more expensive to finance a car purchase, limiting demand. CarMax

(KMX), the nation’s largest pure used car dealer, has warned that the combination of high prices and high interest rates is creating an affordability problem for many buyers, hurting overall demand.

But the leading reason for the drop in used car prices is the increased supply of new cars.

It was the lack of new car inventory that drove up prices. Parts shortages, especially for computer chips, had choked off production of new cars in much of 2022, causing the lowest level of full-year US new car sales since 2011.

The low supply of new cars caused an even bigger jump in the average price of used cars, as buyers who would otherwise buy new vehicles turned to the used car market.

“At one point it seemed that everyone who was going to buy new ended up buying used,” said Greg Markus, executive vice president of AutoLenders, parent company of New Jersey’s largest used car dealership chain.

That included rental car companies, which before the pandemic normally bought about 10% or more new cars per year. With limited inventory of cars to sell, automakers essentially stopped making lower-priced fleet sales, and even rental car companies were forced to turn to the used car market.

All that has started to change in recent months. Automakers are reporting more supplies of the chips they need, and are producing and selling more cars, including a return of fleet sales. Overall, sales were up 9% in the fourth quarter compared to a year ago, and nearly 6% higher than in the third quarter, according to Cox Automotive. And with more buyers finding the new cars they want, that means lower demand for used cars.

Experts say part of the decline in used car prices is that the price increases were not sustainable and were partly driven by buyers at used car auctions overpaying for the limited supply of used vehicles.

“There was nowhere for these prices to go but down,” said Markus.

There could be more declines in used car prices in the months ahead, as new car inventories continue to build. One thing that could put a floor under the used car prices: late model used cars will likely be in short supply given the reduced new car production over the last three years.

“The supply issue is still grim,” said Markus. Because of that, “I don’t think we’re getting down to 2019 levels,” he added.

The run-up in used car prices was a major driver in the nation’s overall inflation rate, adding about a full percentage point to the overall increase in consumer prices from April of 2021 through May of 2022. Now it’s a factor helping to bring down the pace of inflation, shaving more than a third of a point off the overall rate in December.

This is obviously good news for those wanting or needing to buy a used car, though it can have a negative effect on car buyers by reducing the value of vehicle they hope to trade in. Edmunds shows the average trade-in value in December down nearly $3,000, or 11%, to $22,605, from the record high hit in June of 2022.

That drop in the value of trade-ins could also be a headwind on car prices by reducing what buyers are able to pay.

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Twitter’s laid-off workers cannot pursue claims via class-action lawsuit, judge says

Twitter

(TWTR) has secured a ruling allowing the social media company to force several laid-off workers suing over their termination to pursue their claims via individual arbitration rather than a class-action lawsuit.

US District Judge James Donato on Friday ruled that five former Twitter employees pursuing a proposed class action accusing the company of failing to give adequate notice before laying them off after its acquisition by Elon Musk must pursue their claims in private arbitration.

Donato granted Twitter’s request to force the five ex-employees to pursue their claims individually, citing agreements they signed with the company.

Twitter did not immediately respond to a request for comment.

The San Francisco judge left for another day “as warranted by developments in the case” whether the entire class action lawsuit must be dismissed, though, as he noted three other former Twitter employees who alleged they had opted out of the company’s arbitration agreement have joined the lawsuit after it was first filed.

The lawyer who represents the plaintiffs, Shannon Liss-Riordan, said on Monday that she had already filed 300 demands for arbitration on behalf of former Twitter employees and would likely file hundreds more.

Those workers all claim they have not received the full severance package promised by Twitter before Musk took over. Some have also alleged sex or disability discrimination.

Last year, Donato had ruled that Twitter must notify the thousands of workers who were laid off after its acquisition by Musk following a proposed class action accusing the company of failing to give adequate notice before terminating them.

The judge said that before asking workers to sign severance agreements waiving their ability to sue the company, Twitter must give them “a succinct and plainly worded notice.”

Twitter laid off roughly 3,700 employees in early November in a cost-cutting measure by Musk, and hundreds more subsequently resigned.

In December last year, Twitter was also accused by dozens of former employees of various legal violations stemming from Musk’s takeover of the company, including targeting women for layoffs and failing to pay promised severance.

Twitter is also facing at least three complaints filed with a US labor board claiming workers were fired for criticizing the company, attempting to organize a strike, and other conduct protected by federal labor law.

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Fisher-Price reminds consumers of 2019 recall of Rock ‘n Play Sleepers after more deaths


New York
CNN
 — 

Fisher-Price for a second time recalled its Rock ‘n Play Sleepers on Monday after at least eight infant deaths occurred after the initial 2019 recall, according to the Consumer Product Safety Commission.

“On April 12, 2019, at the time the original recall was announced, over 30 fatalities were reported to have occurred in the Rock ‘n Play Sleepers after the infants rolled from their back to their stomach or side while unrestrained, or under other circumstances,” the commission said in a statement. “Since the recall, approximately 70 additional fatalities have been reported, which includes at least 8 fatalities that were reported to have occurred after the initial recall announcement.”

“Approximately 100 deaths have reportedly occurred while infants were in the products,” the CPSC indicated. “Fisher-Price notes that in some of the reports, it has been unable to confirm the circumstances of the incidents or that the product was a Rock ‘n Play Sleeper.”

The CPSC indicated that “consumers should stop using the Rock ‘n Play immediately and contact Fisher-Price for a refund or voucher. It is illegal to sell or distribute the recalled sleepers.”

The initial 2019 recall affected about 4.7 million sleepers. The sleepers were sold at stores such as Walmart, Target and Amazon from September 2009 to April 2019.

At the time of the initial recall, Chuck Scothon, general manager at Fisher-Price, said the company considered the recall the “best course of action” and would continue to stand by the safety of all its products.

“With these actions, we want parents around the world to know that safety will always be a cornerstone of our mission, that we are committed to these values, and will continue to prioritize the health, safety and well-being of the infants and preschoolers who utilize our products,” Scothon said during the initial recall.

– CNN’s Nicole Chavez contributed to this report

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A US federal agency is considering a ban on gas stoves


New York
CNN
 — 

A federal agency is considering a ban on gas stoves as concerns about indoor pollution linked to childhood asthma rise, Bloomberg first reported.

A US Consumer Product Safety commissioner told Bloomberg gas stove usage is a “hidden hazard.”

“Any option is on the table. Products that can’t be made safe can be banned,” agency commissioner Richard Trumka Jr. said in a Bloomberg interview. The report said the agency plans “to take action” to address the indoor pollution caused by stoves. CNN has reached out to the CPSC for comment.

The CPSC has been considering action on gas stoves for months.Trumka recommended in October that the CPSC seek public comment on the hazards associated with gas stoves. The pollutants have been linked to asthma and worsening respiratory conditions.

A December 2022 study in the International Journal of Environmental Research and Public Health found that indoor gas stove usage is associated with an increased risk of current asthma among children. The study found that almost 13% of current childhood asthma in the US is attributable to gas stove use.

Trumka told Bloomberg the agency plans to open public comment on gas stove hazards. Options besides a ban include “setting standards on emissions from the appliances.”

Thirty-five percent of households in the United States use a gas stove, and the number approaches 70% in some states like California and New Jersey. Other studies have found these stoves emit significant levels of nitrogen dioxide, carbon monoxide and fine particulate matter – which without proper ventilation can raise the levels of indoor concentration levels to unsafe levels as deemed by the EPA.

“Short-term exposure to NO2 is linked to worsening asthma in children, and long-term exposure has been determined to likely cause the development of asthma,” a group of lawmakers said in a letter to chair Alexander Hoehn-Saric, adding it can also exacerbate cardiovascular illnesses.

The letter – Sen. Corey Booker and Sen. Elizabeth Warren among its signers – argued that Black, Latino and low-income households are more likely to be affected by these adverse reactions, because they are either more likely to live near a waste incinerator or coal ash site or are in a home with poor ventilation.

In a statement to CNN, the CPSC said the agency has not proposed any regulatory action on gas stoves at this time, and any regulatory action would “involve a lengthy process.”

“Agency staff plans to start gathering data and perspectives from the public on potential hazards associated with gas stoves, and proposed solutions to those hazards later this year,” the commission said in a statement. “Commission staff also continues to work with voluntary standards organizations to examine gas stove emissions and address potential hazards.”

Some cities across the US banned natural gas hookups in all new building construction to reduce greenhouse emissions – Berkeley in 2019, San Francisco in 2020, New York City in 2021. But as of last February, 20 states with GOP-controlled legislatures have passed so-called “preemption laws” that prohibit cities from banning natural gas.

“To me that’s what’s interesting about this new trend, it seems like states are trying to eliminate the possibility before cities try to catch onto this,” Sarah Fox, an associate law professor at Northern Illinois University School of Law, told CNN last year. “The natural gas industry… has been very aggressive in getting this passed.”

In a statement to CNN Business, the Association of Home Appliance Manufacturers said an improvement in ventilation is the solution to preventing indoor air pollution while cooking.

“A ban on gas cooking appliances would remove an affordable and preferred technology used in more than 40% of home across the country,” Jill Notini, industry spokesperson, said in a statement. ” A ban of gas cooking would fail to address the overall concern of indoor air quality while cooking, because all forms of cooking, regardless of heat source, generate air pollutants, especially at high temperatures.”

The American Gas Association pushed back against a natural gas ban in a blog post in December, saying it makes housing more expensive as “electric homes require expensive retrofits.”

However, Biden’s landmark Inflation Reduction Act includes a rebate of up to $840 for an electric stove or other electric appliances, and up to an $500 to help cover the costs of converting to electric from gas.

– CNN’s Ella Nilsen contributed to this report.

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Alzheimer’s drug lecanemab receives accelerated FDA approval amid safety concerns



CNN
 — 

The US Food and Drug Administration granted accelerated approval Friday for the Alzheimer’s disease drug lecanemab, one of the first experimental dementia drugs to appear to slow the progression of cognitive decline.

“Alzheimer’s disease immeasurably incapacitates the lives of those who suffer from it and has devastating effects on their loved ones,” Dr. Billy Dunn, director of the Office of Neuroscience in the FDA’s Center for Drug Evaluation and Research, said in a statement. “This treatment option is the latest therapy to target and affect the underlying disease process of Alzheimer’s, instead of only treating the symptoms of the disease.”

Lecanemab will be marketed as Leqembi, the FDA statement said. It has shown “potential” as an Alzheimer’s disease treatment by appearing to slow progression, according to Phase 3 trial results, but it has raised safety concerns due to its association with certain serious adverse events, including brain swelling and bleeding.

In July, the FDA accepted Eisai’s Biologics License Application for lecanemab under the accelerated approval pathway and granted the drug priority review, according to the company. The accelerated approval program allows for earlier approval of medications that treat serious conditions and “fill an unmet medical need” while the drugs continue to be studied in larger and longer trials.

If those trials confirm that the drug provides a clinical benefit, the FDA could grant traditional approval. But if the confirmatory trial does not show benefit, the FDA has the regulatory procedures that could lead to taking the drug off the market.

Lecanemab, a monoclonal antibody, is not a cure but works by binding to amyloid beta, a hallmark of Alzheimer’s disease. In late November, results from an 18-month Phase 3 clinical trial published in The New England Journal of Medicine showed that lecanemab “reduced markers of amyloid in early Alzheimer’s disease and resulted in moderately less decline on measures of cognition and function than placebo at 18 months but was associated with adverse events.”

The results also showed that about 6.9% of the trial participants given lecanemab, as an intravenous infusion, discontinued the trial due to adverse events, compared with 2.9% of those given a placebo. Overall, there were serious adverse events in 14% of the lecanemab group and 11.3% of the placebo group.

The most common adverse events in the lecanemab group were reactions to the intravenous infusions and abnormalities on their MRIs, such as brain swelling and bleeding called amyloid-related imaging abnormalities, or ARIA, which can become life-threatening.

Some people who get ARIA may not have symptoms, but it can occasionally lead to hospitalization or lasting impairment. And the frequency of ARIA appeared to be higher in people who had a gene called APOE4, which can raise the risk of Alzheimer’s disease or other dementias. ARIA “were numerically less common” among APOE4 noncarriers, the study showed.

The drug’s prescribing information carries a warning about ARIA, the FDA says.

The trial results also showed that about 0.7% of participants in the lecanemab group and 0.8% of those in the placebo group died, corresponding to six deaths in the lecanemab group and seven in the placebo group.

The Alzheimer’s Association welcomed Friday’s decision.

“By slowing progression of the disease when taken in the early stages of Alzheimer’s, individuals will have more time to participate in daily life and live independently,” President and CEO Joanne Pike said. “This could mean more months of recognizing their spouse, children and grandchildren. This could also mean more time for a person to drive safely, accurately and promptly take care of family finances, and participate fully in hobbies and interests.”

More than 6.5 million people in the United States live with Alzheimer’s disease, according to the Alzheimer’s Association, and that number is expected to grow to 13.8 million by 2060.

Lecanemab will carry a wholesale price of $26,500 per patient per year, the drug’s manufacturers announced Friday.

Biogen and Eisai have listed the drug slightly below the reduced price of the Alzheimer’s medication Aduhelm, which now costs an average patient about $28,200. The companies had to lower the cost of Aduhelm – originally set at $56,000 per patient per year – after insurers balked at covering it.

In justifying the cost of Leqembi, the companies said in a news release that based on the estimated quality of life gained by people who take it, the value of the medication to society is around $37,000 a year, but they chose to go lower “aiming to promote broader patient access, reduce overall financial burden, and support health system sustainability.”

The wholesale cost of a drug is akin to a car’s sticker price. It isn’t necessarily what patients will pay after insurance or other discounts are factored in.

Insurance coverage for this medication is not a given, however. Medicare restricted its coverage of lecanemab’s sister drug, Aduhelm, after clinical trials showed questionable benefits to patients. The agency agreed to cover the drug only for people enrolled in registered clinical trials, which limited access to the medication.

Center for Medicare and Medicaid Services Administrator Chiquita Brooks-LaSure said after the FDA’s decision Friday that her office would quickly review Leqembi, but for now, because of its accelerated approval, it will be covered the same way Aduhelm is covered.

“At CMS, we will continue to expeditiously review the data on these products as they become available and are committed to timely access to treatments, including drugs, that improve clinically meaningful outcomes,” Brooks-LaSure said in a statement.

Last month, the Alzheimer’s Association filed a formal request asking CMS to provide “full and unrestricted coverage” Alzheimer’s treatments approved by the FDA.

“What the FDA did today in granting accelerated approval to Leqembi was the right decision. But what CMS is doing by severely restricting coverage for approved treatments is unprecedented and wrong,” Pike said in a statement Friday.

“The FDA carefully reviewed the evidence for Leqembi before granting approval. CMS, in sharp contrast, denied coverage for Leqembi months ago before it had even reviewed this drug’s evidence. CMS has never done this before for any drug, and it is clearly harmful and unfair to those with Alzheimer’s. Without access to and coverage of this treatment and others in its class, people are losing days, weeks, months – memories, skills and independence. They’re losing time.”

CMS told CNN that it will review and respond to the association’s request. The agency also noted that it continues to stay informed about ongoing clinical trials, including the most recent lecanemab results published in the New England Journal of Medicine. Also, it has met with drugmakers to learn about their efforts since CMS’s coverage decision was announced.

The FDA approved Aduhelm for early phases of Alzheimer’s disease in 2021 – but that decision has been shrouded in controversy as a congressional investigation found last week that the FDA’s “atypical collaboration” to approve the high-priced drug was “rife with irregularities.”

Before Aduhelm, the FDA had not approved a novel therapy for the condition since 2003.

Aduhelm’s FDA approval and initial hefty price tag hit Medicare’s Part B premiums, driving up the 2022 standard monthly payments by 14.5% to $170.10.

About $10 of the premium spike – or just under half the amount – was due to Aduhelm, a CMS official told CNN in late 2021.

The premium increase was set before Medicare announced its limited coverage of the drug, but its actuaries had to make sure that the program had sufficient funding in case Aduhelm was covered.

Medicare’s decision, as well as Biogen’s slashing of the drug’s cost, prompted a decline in monthly premiums for 2023 to $164.90.

The FDA’s accelerated approval of lecanemab was expected, said Dr. Richard Isaacson, director of the Alzheimer’s Prevention Clinic in the Center for Brain Health at Florida Atlantic University’s Schmidt College of Medicine.

Isaacson said lecanemab can be “another tool” in his toolbox to fight Alzheimer’s disease.

“I will prescribe this drug in the right person, at the right dose and in a very carefully monitored way, but this drug is not for everyone,” he said.

“I would do genetic testing for APOE4 first. I would have a frank discussion with my patients,” he said. “If someone is having side effects, if someone is on a blood-thinning medication, if someone has a problem, they need to discuss this with the treating physician, and they need to seek medical attention immediately.”

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PCE, the Fed’s preferred inflation gauge, shows prices cooling


Minneapolis
CNN
 — 

The trend is clear: Inflation is cooling off in America.

The Federal Reserve’s preferred measurement of inflation showed price increases continued to moderate in November, providing yet another welcome indication that the period of painfully high prices has peaked.

The Personal Consumption Expenditures price index, or PCE, rose 5.5% in November from a year earlier, the Commerce Department reported Friday. That’s lower than in October, when prices rose 6.1% annually.

In November alone, prices rose just 0.1% from October.

Core PCE, which excludes the volatile food and energy categories, was up 4.7% annually and 0.2% on a monthly basis, matching expectations of economists polled by Refinitiv.

The annual increases for both PCE inflation indexes hit their lowest levels since October 2021 and follows continued declines in other inflation gauges, such as the Consumer Price Index and Producer Price Index.

PCE, specifically the core measurement, is the Fed’s favored inflation gauge, since it provides a more complete picture of costs for consumers.

Friday’s report also showed that spending continued to rise in November, but at a much slower pace than in previous months. Spending was up 0.1% in November as compared to 0.8% the month before. Personal income increased by 0.4% in November, down from 0.7% in October.

The November PCE report, the last major inflation gauge released in 2022, provided a snapshot of an economy in transition. Tasked with reining in the highest inflation since the early 1980s, the Fed has undertaken a series of blockbuster interest rate hikes to squelch demand.

In its seven meetings starting in March, the central bank’s policymaking arm raised its benchmark interest rate by a cumulative 4.25 percentage points. The sharp hike in rates has started to filter through the economy, its effects showing up first in areas such as real estate, where mortgage rates were 6.27% this week, more than double the rate seen last year at this time, according to Freddie Mac data.

“The economy is moving in the right direction from the Federal Reserve’s perspective at the end of 2022, but not quickly enough,” Gus Faucher, chief economist for PNC Financial Services, said in a statement. “Higher interest rates are weighing on consumer spending, particularly for durable goods, and inflation is slowing.”

Inflation has moderated in recent months, especially on items like goods as supply chain bottlenecks have eased and consumers focused more spending in areas like leisure and hospitality.

However, inflation within the services sector has been a little “sticky,” and not abating as quickly. Friday’s PCE report showed the services index posted a monthly increase of 0.4% – unchanged from October’s rate – and a year-over-year increase of more than 11%, Faucher noted.

While much of the services inflation is due to housing costs, which are rapidly reversing, the Fed is concerned that strong wage growth could fuel persistent increases in services prices and overall inflation, he added.

“The Federal Open Market Committee will continue to increase the fed funds rate in early 2023 until it becomes more apparent that the job market is cooling, and wage growth and services inflation are slowing to more sustainable paces,” he added.

The Fed’s latest economic projections that were released last week showed that board members were expecting inflation to remain slightly higher for longer than previously forecast. Fed board members now expect PCE inflation to end 2023 at 3.1% and core PCE to finish next year at 3.5%, above the central bank’s target rate of 2%.

A separate Commerce Department report released Friday showed that new orders for manufactured goods tumbled 2.1% in November, the biggest monthly drop since the onset of the pandemic.

Transportation equipment, specifically new orders for non-defense aircraft and parts, drove the decline, according to the report. Excluding transportation, new orders increase 0.2%.

Shipments increased 0.2% in November, which followed a 0.4% increase in October.

“Core durable goods orders slowed but did not contract, reflecting growing unease about the economy,” Diane Swonk, chief economist for KPMG, tweeted Friday after the report’s release. “Manufacturing activity has begun to contract and prelim reading for December suggests it will contract further at year end. A cold winter expected for the manufacturing sector.

Inflation’s slow march downward has been welcome news to consumers as well, helping to perk up their economic sentiments during December, according to new data released Friday by the University of Michigan.

The final December reading for the index of consumer sentiment came in at 59.7 in December, up slightly from a preliminary measurement of 59.1 and November’s final reading of 56.8, according to data from the university’s Surveys of Consumers.

“Consumers clearly welcomed the recent easing of inflation,” Joanne Hsu, director of the Surveys of Consumers, said in a statement. “While sentiment appears to have turned a corner from its all-time low from June, consumers have reserved judgment about whether the trends will continue.”

She added: “Their outlook for the economy may have improved, but it remains relatively weak. The sustainability of robust consumer spending is contingent on continued strength in incomes and labor markets in the quarters ahead.”

The report showed the biggest improvement in sentiment about business conditions, while inflation expectations also improved by falling to 4.4% in December, the lowest reading in 18 months, according to the university. This is a key data point for the Federal Reserve. If consumers believe prices will remain high, that could factor into increased wage demands, which could cause businesses to raise prices.

Earlier this week, the Conference Board’s consumer confidence index – another measure of how consumers are feeling about the economy – landed at its highest measurement since April 2022.



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Key inflation measure shows price pressures cooled off in November, but remain high


New York
CNN
 — 

Another key inflation measure shows price pressures cooled off but remained stubbornly high in November, despite the Federal Reserve’s monthslong efforts to fight inflation through higher interest rates.

The Producer Price Index, which measures prices paid for goods and services by businesses before they reach consumers, rose 7.4% in November compared to a year earlier, the Bureau of Labor Statistics reported Friday. That’s down from the revised 8.1% gain reported for October.

US stocks fell immediately after the report, as economists surveyed by Refinitiv had expected wholesales prices to have risen just 7.2%, annually. The higher-than-expected inflation readings raised concerns about whether the Fed will be able to slow the pace of rate hikes.

But futures for the Fed funds rate still show a strong likelihood of a half-point increase at the central bank’s policymaking meeting next week, rather than the three-quarter point hike instituted at the last four meetings.

The PPI report generally gets less attention that the corresponding Consumer Price Index, which measures prices paid by US consumers for goods and services. But this is a rare month in which the PPI report came out before the CPI report, which is due out Tuesday.

That and the Fed meeting scheduled for Tuesday and Wednesday next week is making this inflation report of particular importance to investors.

“Next Tuesday’s CPI release will be more important than today’s data, but with traders on edge, any indication that prices remain elevated and that inflation is more sticky than currently believed is a negative for markets,” said Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance.

Overall prices rose a seasonally adjusted 0.3% compared to October — the same monthly increase as was reported in both September and October — but were slightly higher than the 0.2% rise forecast by economists.

Stripping out volatile food and energy prices, core PPI rose 6.2% for the year ending in November, down from the revised 6.8% increase the previous month. Economists had forecast only a 5.9% increase.

Core PPI posted a 0.4% increase from October, a far bigger rise than the revised 0.1% month-over-month rise in that previous month, and twice as big as the 0.2% rise forecast by economists.

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In wake of baby formula crisis, critical report recommends major food safety changes at FDA



CNN
 — 

To help prevent outbreaks of food-related illness and problems like the formula shortage that left many parents in the US without adequate access to food for their babies, the US Food and Drug Administration needs a clearer mission and a different kind of leadership, and it has to act with more urgency, according to a highly critical new report.

After the agency faced serious criticism for its handling of the formula shortage, FDA Commissioner Dr. Robert Califf commissioned the review of the Human Foods Program in July from the Reagan-Udall Foundation, an independent group of experts.

The need for a review was considered so urgent that Califf asked the group to submit the report in 60 business days – lightning speed for government-focused reports. It was submitted to the FDA on Tuesday.

About 48 million Americans get some kind of foodborne illness every year, according to the US Centers for Disease Control and Prevention. Of those, 128,000 are hospitalized, and 3,000 die. Produce alone in 2019 was responsible for 46% of foodborne illness outbreaks, according to the US Department of Agriculture.

The FDA oversees the safety of 78% of the US human food supply.

It enforces food safety regulations, works with local governments on food safety information, promotes dietary guidelines, and develops food safety information and education, as well as overseeing nutrition labels on most food and being responsible for promoting good nutrition practices to the US public.

The US food supply is generally recognized as safe, the Reagan-Udall Foundation’s report said, but the FDA needs to be much more proactive in dealing with foodborne pathogens in order to protect Americans.

“An approach that is primarily focused on identifying and reacting to acute outbreaks of foodborne illness and death is unacceptable,” the report says.

Americans’ nutrition can also improve, the report says. Most people don’t follow the US dietary recommendations, and more than a million die of diseases that can be linked to diet such as heart disease, type 2 diabetes and cancer each year, according to the FDA

“Relying solely on food labeling and consumer education to drive the needed changes in the food supply is also an unacceptable strategy for reducing diet-related chronic diseases,” the new report says.

The report suggests that the agency needs major reform in order to do a better job managing food in the US. Some of the proposed changes would require congressional approval.

The report has several suggestions for ways to reach these goals. One would create a separate Center for Nutrition within the US Department of Health and Human Services. Another would have the FDA develop a strategy to increase funding for the Human Foods Program, with help from Congress. The agency could also connect its technology systems so they better communicate with each other.

The FDA could seek to amend the Federal Food, Drug, and Cosmetic Act to allow the disclosure of more information to local agencies. Or it could get regulatory authority to request records from food manufacturers in advance or in lieu of inspection.

The report recommends that the FDA explore applying its authority to require infant formula manufacturers, for instance, to keep microbiological testing records that are available on request so there is real-time disclosure of results.

It also suggests that the FDA use its mandatory recall authority more often and that there should be a process by which accommodations are made for products that are considered life-sustaining, like formula. At the moment, food recalls are usually voluntarily initiated by a manufacturer or food distributor.

The report also notes that the food program is run under the leadership of several managers. This “lack of a single, clearly identified person” to lead the program has led to a culture of “constant turmoil” and “indecisiveness and inaction” that has created “disincentives for collaboration,” according to the report.

That turmoil was partly to blame for the agency’s problematic handling of the formula shortage, the report says.

Experts have said the agency failed to act quickly enough on sanitation complaints at an Abbott Nutrition formula manufacturing facility in Michigan, and because of a lack of communication across departments, it didn’t circumvent what became a massive shortage of formula after the plant shut down.

“A review of events indicates that lack of communication and engagement across the Agency accounted, in part, for missteps,” the new report says. “There was little motivation, and apparently no requirement, to share information and interact across the Agency to facilitate critical thinking and proactive decision-making.

“This is especially problematic in a crisis, where decisions should be made quickly and be vetted properly.”

The report suggests that the FDA create a new structure with clear roles and leaders. It also encourages development of a culture that is more transparent, that acts quickly and collaborates.

“The current culture of the FDA Human Foods Program is inhibiting its ability to effectively accomplish this goal” of protecting public health,” the report says.

Califf said Tuesday that the agency has not had the opportunity to review the report in depth but that the report provides “significant observations” and options to consider.

“The work of these independent evaluators will help to inform a new vision for the FDA Human Foods Program,” Califf said in a news release.

Some critics have suggested that food safety takes a back seat to the FDA’s regulations of drugs and medical devices. Califf acknowledged that food policy was important to the agency, citing the decline in life expectancy in the US largely due to chronic diseases that can be improved with good nutrition.

“The Human Foods Program is a top priority for the agency. America’s food supply is as safe as it’s ever been,” he said. “That said, over the past several years, the program has been stressed by the increasing diversity and complexity of the nation’s food systems and supply chain, the ongoing impacts associated with climate change and rapid advances in the science underlying many of the foods we eat today.”

The FDA will inform the public about how it is moving forward on the panel’s suggestions by the end of January and will provide additional updates at the end of February, including on any structural or procedural changes it will make, Califf said.

He said he’s putting together a group of leaders at the FDA that will advise him on how to “operationalize these findings,” and he expects these leaders to be “bold and focused on the transformative opportunities ahead for the FDA’s food program.”

In April, a coalition of 30 organizations that represent industry, local regulators and consumers sent a letter to the FDA asking for the creation of a deputy commissioner for foods with direct line authority over all the agency’s food components.

One of the organizations, Consumer Reports, has called for months for more accountability and focused leadership from the FDA.

“We need strengthened leadership and accountability at the FDA to implement a culture of prevention, respond more quickly to problems as they arise, and take timely action on proposed food safety rules and initiatives,” Brian Ronholm, Consumer Reports’ director of food policy, said Tuesday.

Ronholm called the new report a “very encouraging first step.”

“We cannot afford to tolerate the status quo and let this moment go by without adopting fundamental changes to improve the FDA’s ability to protect the public and ensure our food is safe,” he said in a statement.

The Consumer Brands Association, a trade association for food manufacturers that also signed the April letter, said Tuesday that the lack of a single leader on food policy leads to “a lot of inefficiencies.”

“A siloed approach across FDA makes it harder for industry to engage,” said Sarah Gallo, the organization’s vice president for product policy. “It is just really complicated when you don’t have somebody looking over the different parts of the agency that have some form of jurisdiction over all those things.

“We can’t ignore what happened with the formula crisis,” Gallo added, a tangible example of what can happen when the FDA is not functioning at its best.

Roberta Wagner, vice president of regulatory and technical affairs for the Consumer Brands Association, agreed that if there were one person in charge, they could make sure the inspection and policy parts of the FDA would work together.

Wagner added that the food industry has embraced a more prevention-oriented kind of philosophy when it comes to safety. “Quite frankly, the problem is, FDA’s inspection force has not modernized itself or its approaches to basically mirror that prevention-oriented system and philosophy,” Wagner said.

The FDA food division has its work cut out for it, though, added Wagner, who worked with the agency in several capacities before joining the association.

“Think about it: The FDA has to keep up with hundreds of thousands of farms and facilities,” she said. “If you have these siloed operations, you’re not having these really critical conversations about where we should be and what should we be doing out there.

“We all want an FDA with a strong foods program. We want consumers not to worry about what they’re eating or whether they’re going to be able to get that certain needed food product,” Wagner added.

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