Tag Archives: Healthcare

Elon Musk Says Twitter Has Had Massive Revenue Drop as Layoffs Begin

Twitter Inc. has suffered “a massive drop in revenue” because of advertisers cutting back on using the social-media platform, new owner

Elon Musk

said Friday, as the company started sweeping layoffs just over a week after the billionaire took it over.

Mr. Musk, in a tweet Friday, blamed the cutback in advertising on “activist groups pressuring advertisers.” He said that the company hadn’t changed content moderation and had tried to address activists’ concerns. “Extremely messed up!” he said, casting the pullback as an assault on free speech.

Mr. Musk’s remarks came after several big-name advertisers, including food company

General Mills Inc.,

GIS -0.63%

Oreo maker

Mondelez International Inc.,

MDLZ 0.44%

and

Pfizer Inc.

PFE 0.74%

and others have temporarily paused their Twitter advertising in the wake of the takeover of the company by Mr. Musk, The Wall Street Journal has reported. German car-making giant

Volkswagen AG

said it had recommended to its various brands they pause advertising on Twitter to assess any revisions the company makes to its brand safety guidelines.

Mr. Musk’s tweet comes after Twitter, in a message sent to staff Thursday, said staffers would be notified by 9 a.m. Friday if they had lost their position or were still employed, the Journal reported.

Twitter by early Friday began notifying employees who had been laid off, according to documents viewed by the Journal.

Roughly 50% of Twitter’s workforce has been hit with layoffs, according to an email sent overnight to one of those affected in the U.S. that was viewed by the Journal. It didn’t specify what departments the terminated employees worked in.

Twitter had more than 7,500 employees at the start of this year, according to a regulatory filing.

The staff reductions were intended “to place Twitter on a healthy path,” according to the company’s Thursday email. “We recognize that this will impact a number of individuals who have made valuable contributions to Twitter, but this action is unfortunately necessary to ensure the company’s success moving forward,” the company added.

In the layoff emails, Twitter said employees assigned “nonworking” status would continue to receive compensation and benefits through a separation date, which for one person was designated as early February and for another early January. It said to expect to receive one month’s base pay in severance approximately 45 days after the termination date, in addition to providing instructions for returning company property such as laptops.

Twitter didn’t say whether employees should expect to receive year-end bonuses, which historically have been based on individual and company performance. The company also didn’t mention whether employees would receive equity payments during the nonworking period.

Some employees said they had lost access to Twitter communication tools overnight. An email sent to an employee in Canada and seen by the Journal said that suspended access to the company’s systems didn’t mean the person’s employment has been terminated.

The layoffs cap a tumultuous period for Twitter staff that began in April, when the company disclosed Mr. Musk had become its largest individual shareholder. Mr. Musk then agreed to join Twitter’s board, before deciding not to. He launched a bid for the company that Twitter eventually accepted. Weeks later Mr. Musk raised questions about the deal, then tried to abandon it, before reversing course again last month and saying he would go ahead with the transaction. Along the way, he at times criticized the company and its executives.

The Thursday email said Twitter’s offices would be temporarily closed to ensure the safety of employees, the company’s systems and customer data. Employees who were in an office or on their way to one were asked to go home, according to the email.

Twitter employees have been bracing for job cuts. The Journal previously reported that the company was drafting plans for broad layoffs, with one investor saying up to 50% of staff could be cut and that employees would be evaluated to determine the scope of the firings.

Elon Musk has purchased Twitter, ending a monthslong saga over whether or not he would go through with his offer to acquire the social media platform. WSJ takes an inside look at the tweets, texts and filings to see exactly how the battle played out. Illustration: Jordan Kranse

Signs of pushback against Twitter’s actions emerged in the wake of the apparent dismissals. In a federal lawsuit dated Thursday, a handful of Twitter employees accused the company of violating federal and California law in failing to provide enough warning of a mass layoff.

The lawsuit, filed in California federal court by five former employees of Twitter who said they were terminated this week, said the company’s layoffs violated the federal Worker Adjustment and Retraining Notification Act and its California equivalent, which require giving 60 days of advance written warning of dismissing a large number of employees of a company at once. The lawsuit asked the court to issue an order blocking Twitter from its alleged violations of the acts. Twitter didn’t immediately respond to a request for comment.

In April, as Mr. Musk was moving to buy Twitter, entrepreneur

Jason Calacanis,

a close ally, suggested cutting the number of Twitter employees to roughly 3,000, according to messages between the two, which were released as part of litigation around the transaction.

A staff of 3,000 would represent the lowest level since 2013, the year Twitter went public, when the platform had about 2,700 employees and its revenue was roughly 13% of its level last year.

Twitter’s employee numbers began climbing in 2019, after ranging between approximately 3,000 and 4,000 for several years. Twitter has said that the increase in recent years was driven by investments in engineering, product, design and research.

Even before officially taking control at Twitter, Mr. Musk had indicated that he was concerned about the company’s expenses. Twitter has posted a loss in eight of its past 10 fiscal years, according to FactSet.

Mr. Musk moved quickly to make personnel changes at the top of the company. Last week, on the same day he closed the deal, he fired Twitter Chief Executive

Parag Agrawal

and three other top executives. Mr. Musk fired the executives for cause and is saying he isn’t required to pay them multimillion-dollar severance packages, the Journal reported. Other executives have departed since.

Mr. Musk has leveraged other parts of his business empire to try to put his imprint on Twitter. He brought in some

Tesla

engineers to begin working on reshaping the social-media platform, the Journal reported. Also added to an internal company directory were some people who appeared to work for the Boring Co., a tunneling business Mr. Musk founded.

Broadly, the social-media industry is struggling with weaker revenue from digital advertisers. Such advertising has slowed due to several factors, including rising inflation, the war in Ukraine, and

Apple

privacy changes that have made it harder to track the performance of ads. Twitter rival Snap Inc. this year said it was letting 20% of staff go.

Facebook

parent Meta Platforms Inc. also has indicated it was trimming ranks.

Tech companies beyond social media also have embarked on belt tightening that is leading to job losses and hiring freezes. On Thursday, ride-hailing company

Lyft Inc.

and payments company Stripe Inc. announced major layoffs, and

Amazon.com Inc.

said it would freeze corporate hiring for months.

Write to Sarah E. Needleman at sarah.needleman@wsj.com and Alexa Corse at alexa.corse@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Americans Take Ketamine at Home for Depression With Little Oversight

Startups are prescribing ketamine online to treat serious mental-health conditions, raising concern among psychiatrists about the safety of taking the mind-altering anesthetic without medical supervision, sometimes at high doses that raise risks of side effects.

Ketamine is approved by the Food and Drug Administration to anesthetize people and animals and has been used safely in hospitals for decades. The out-of-body, hallucinogenic sensations it produces made it popular as a party drug known as Special K. Some doctors prescribe ketamine off-label to treat patients with conditions including severe depression, suicidal thoughts and post-traumatic stress disorder.

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Generic ketamine isn’t approved for those conditions. Studies have shown it can rapidly alleviate symptoms of severe depression when other treatments have failed.

There is less data on ketamine’s effectiveness for other conditions including anxiety and PTSD, and little data on its long-term use.

The FDA has approved a chemically related version of the drug, called esketamine, from

Johnson & Johnson

for treatment-resistant depression with suicidal thoughts.

Clinics that are certified to administer J&J’s nasal spray must monitor patients for two hours afterward.

People taking generic ketamine at home aren’t subject to the same oversight.

Clinics specializing in ketamine treatment for depression and other mood disorders have popped up across the U.S. in recent years. WSJ visits a clinic to learn why some entrepreneurs are betting that demand for ketamine will continue to rise. Photo illustration: Laura Kammermann

Mindbloom Inc., Nue Life Health PBC and Wondermed LLC are among around a dozen companies now selling ketamine tablets or lozenges online, making use of relaxed restrictions on the prescription of controlled substances during the pandemic.

The companies work with clinicians who prescribe ketamine to patients based on a questionnaire and virtual evaluation. The generic ketamine pills or lozenges are mailed to patients’ homes. The companies say they instruct people to take the medication with someone nearby, among other safety measures.

Taking ketamine at home without medical supervision increases risks of patients falling and hurting themselves or taking more of the drug than prescribed, doctors said. Ketamine can be addictive, and patients might not get the help they need if they have a distressing experience while taking the drug, psychiatrists said.

“Places that are doing virtual ketamine are negotiating a compromise between accessibility and safety,” said Dr.

Benjamin Yudkoff,

medical director of the ketamine and esketamine program at Brigham and Women’s Faulkner Hospital in Boston.

Ketamine increases heart rate and blood pressure, raising the risk of rare complications including stroke or heart attack at the higher doses that some telehealth patients have been prescribed, medical experts said.

“Giving any drug like that has the potential to cause general anesthesia at home in a completely unmonitored environment,” said Dr.

Michael Champeau,

president of the American Society of Anesthesiologists.

The companies said prescribing ketamine-assisted therapy at home can help fill a need for people who don’t respond to existing medications or can’t reach or afford treatment in person. Ketamine blocks a receptor in brain cells important for brain adaptability, which researchers say might help facilitate changes in mood and mind-set.

Ketamine was prescribed for Leon New Valentine, who said it alleviated symptoms of treatment-resistant depression and PTSD.



Photo:

Tara Pixley for The Wall Street Journal

Mindbloom and Nue Life cited peer-reviewed research they published suggesting that many patients reported feeling better after taking ketamine and that few reported problems related to taking the drug.

Mindbloom, Nue Life and Wondermed said they decline to treat people who have symptoms that are too severe or histories of conditions such as substance-use disorder, psychosis or uncontrolled hypertension. Nue Life said it sometimes consults with a patient’s doctor before prescribing ketamine, and Mindbloom said it often asks for medical records. Wondermed said patients can choose to have their doctors work with the company during treatment.

‘Places that are doing virtual ketamine are negotiating a compromise between accessibility and safety.’


— Dr. Benjamin Yudkoff, Brigham and Women’s Faulkner Hospital

Nue Life said it starts patients at around 125 milligrams and prescribes at most 750 milligrams for a dose. Wondermed said it prescribes patients between 100 milligrams and 400 milligrams for a dose. Mindbloom said that it starts patients at around 400 milligrams and that some patients graduate to doses of around 1,000 milligrams.

Doses of around 1,000 milligrams heighten risks for severe side effects including rare seizures, hemorrhages or strokes, said

Ari Aal,

a psychiatrist in Boulder, Colo., who prescribes ketamine at lower doses to patients who take it under supervision at his clinic.

“That’s way too much of a dose to be doing at home and probably at all, and way too much without a practitioner watching you,” Dr. Aal said.

Mindbloom and Wondermed said they provide blood-pressure monitors for patients to use before and during treatment. Nue Life said it instructs patients with controlled hypertension to monitor their blood pressure.

A ketamine kit provided by Mindbloom for Courtney Gable.



Photo:

Courtney Gable

Timothy Mitchell,

a 40-year-old patient advocate from Ballston Lake, N.Y., said Mindbloom started him on an 800-milligram dose last year. He said he is undergoing his third course of a six-dose regimen with Mindbloom at 1,200 milligrams a dose. The treatment helped quiet suicidal thoughts, he said.

Wondermed said it charges $399 for a month of ketamine tablets or lozenges and telemedicine treatment. Mindbloom said it charges around $1,000 for around three months of ketamine and telemedicine care. Nue Life said it charges as much as $2,999 for ketamine tablets and telemedicine treatment over four months. Health insurers usually don’t reimburse people for the off-label treatments.

Amanda Itzkoff,

a psychiatrist and chief executive of Curated Mental Health, which administers ketamine in clinics, said she declined to be on Mindbloom’s advisory board in part because she was concerned that at-home use might not include enough patient supervision.

Making a comparison with a crackdown on psychedelic-drug research decades ago, she said that if companies recklessly prescribe ketamine for home use, they could set back adoption of a valuable treatment. “We could blow it again,” Dr. Itzkoff said.

A spokesman said that Mindbloom ended its relationship with Dr. Itzkoff and that she didn’t raise safety concerns. Mindbloom’s medical director, Dr.

Leonardo Vando,

said striking the right balance between expanding access to ketamine and safe prescribing practices is critical to Mindbloom.

Courtney Gable,

47, said her husband checked on her when she took ketamine that Mindbloom prescribed for her this year to treat chronic pain and depression. The 400-milligram dose was higher than initial doses prescribed at a clinic where she works in Philadelphia, she said.

“There’s a safety net, but the spaces between the net are a little wider,” Ms. Gable said.

Leon New Valentine,

a 32-year-old actor and videogame model in Los Angeles, was prescribed 100 milligrams of ketamine online last year by Peak Health Global Inc., and took the medication with someone nearby. Mx. Valentine, who uses they as a pronoun, said they graduated to 150-milligram doses and took that alone. Ketamine alleviated symptoms of treatment-resistant depression and PTSD, Mx. Valentine said.

“Things are joyful again even though I’m in pain,” Mx. Valentine said. Peak said it would close in November because it expects rules allowing controlled substances to be prescribed remotely to be tightened soon.

Write to Brianna Abbott at brianna.abbott@wsj.com and Daniela Hernandez at daniela.hernandez@wsj.com

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Biden Administration Pares Back Covid Fight as Funding Push Falls Short

The Biden administration has stopped paying to mail out free Covid-19 tests and expects to end free vaccines for Americans after Congress dropped billions of dollars for such efforts from a government funding bill last month.

People familiar with the matter said the administration’s Covid-19 task force will remain in place ahead of an expected uptick in cases in the coming winter months. But the team will shift focus from emergency response to longer-term issues, such as boosting domestic manufacturing of personal protective equipment, researching long Covid and supporting genomic sequencing to identify variants, the people said.

The shift means that health insurers and employers will likely pay for Covid-19 vaccines, drugs and tests, as they do for most medical products and services.

The administration on Tuesday released updates to the national biodefense strategy that it said would strengthen surveillance for risky pathogens and preparedness for future outbreaks or biowarfare attacks. Some of the planning is under way, officials said, and other aspects are dependent on $88 billion in funding for pandemic preparedness and biodefense the administration has requested from Congress.

Changes in the administration’s pandemic strategy come as Covid-19 cases are climbing in Europe, which is often a precursor to rising case numbers in the U.S. And the arsenal of available treatments for people infected with Covid-19 has dipped as mutations allow variants to evade them.

The White House had sought $22.4 billion from Congress for more Covid tests, vaccines and treatments.



Photo:

Kyle Mazza/Zuma Press

“Just because we’ve ended the emergency phase of the pandemic doesn’t mean Covid is over,” said

Eric Topol,

executive vice president of Scripps Research, a medical-research facility.

After the coronavirus hit, the federal government funded development of some Covid-19 vaccines and took control of the purchase and distribution of the shots, tests and other products to guarantee sufficient supplies and make sure they went where needed.

Federal officials planned to relinquish their control to the private sector after the emergency subsided.

Eli Lilly

& Co. said in August it planned to start selling its Covid-19 antibody drug after federal supplies ran out and without new appropriations from Congress.

The federal government has also wound down its program of providing free Covid-19 tests to people who ordered them online, though it is still distributing free tests in other locations, such as long-term-care facilities and rural health clinics.

The issue is tricky for the Biden administration. President Biden had campaigned on a promise to get the pandemic under control, and the White House has sought to show progress in combating the virus. Yet many Americans have stopped masking and taking other precautions, which administration officials worry will put them at risk if a new wave emerges during the winter.

The administration had sought $22.4 billion for the Covid-19 response from Congress, and it recently extended the pandemic’s status as a public-health emergency. The White House said the money was needed to pay for more tests, vaccines—including development of new, next-generation vaccines—and treatments.

The money wasn’t included in a must-pass government-funding bill last month.

To build support for new funding, Biden administration officials have been warning about the risks to people if cases surge in the cold-weather months and there aren’t sufficient supplies of Covid-19 products because the federal government lacks the money to buy them.

“We are going into this fall and winter without adequate tests because of congressional inaction,”

Ashish Jha,

the White House Covid-19 coordinator, said recently. “You can’t fight a deadly virus without resources.”

The new bivalent vaccine might be the first step in developing annual Covid shots, which could follow a similar process to the one used to update flu vaccines every year. Here’s what that process looks like, and why applying it to Covid could be challenging. Illustration: Ryan Trefes

Republicans, who opposed including the Covid funds in the spending bill, said there had not been a thorough accounting of how pandemic-relief funds had been spent. Congress had allocated about $4.6 trillion as of August, according to USASpending.gov, which tracks federal-spending information.

“You have been given astonishing amounts of money,” Sen.

Richard Burr

(R., N.C.) said at a recent congressional hearing.

Without a new appropriation, funds for the federal government to buy and supply Covid-19 vaccines are expected to run out by early next year. The administration now is looking into ways to guarantee that about 30 million uninsured people can access future boosters, treatments and vaccines. Foundations, companies and other groups have paid for non-pandemic medicines for some people who don’t have insurance.

The administration is also in talks with various stakeholders such as vaccine makers about how to transition from the government procuring vaccines to more traditional models, such as insurance coverage of shots or treatments.

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Is Congress allocating enough money to fight Covid-19? Why or why not? Join the conversation below.

The administration is also figuring out how to move forward with efforts to develop a more durable, next-generation Covid-19 vaccine without the boost in funds. Without a vaccine that blocks both infection and transmission, the virus has been able to continue mutating to evade immunity. Members of the White House Covid-19 task force have said a nasal vaccine could be more effective because it targets immune responses where the virus first enters the body, though developing such a shot poses scientific challenges.

Anthony Fauci,

the president’s chief medical adviser, said the National Institutes of Health is giving grants totaling more than $60 million over three years to academic institutions for development of a broad coronavirus vaccine. But more funding will be necessary to finish that work, said Dr. Fauci, who leads the NIH’s National Institute of Allergy and Infectious Diseases.

Some public-health leaders and federal officials say the U.S. is falling behind countries such as China, which has introduced a vaccine that is inhaled through the nose and mouth.

“It’s a national-security risk,” said

Jennifer Nuzzo,

a professor of epidemiology and director of the pandemic center at the Brown University School of Public Health in Rhode Island. “Other countries have looked at how the U.S. is struggling.”

—Michael R. Gordon contributed to this article.

Write to Stephanie Armour at Stephanie.Armour@wsj.com

Corrections & Amplifications
The White House wants to show progress in combating the coronavirus. An earlier version of this article incorrectly said the White House wants to show progress in combating the vaccine. (Corrected on Oct. 18)

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Humana, CVS Circle Cano Health as Potential Buyers

Humana Inc.

HUM 0.67%

and

CVS Health Corp.

CVS 0.06%

are circling

Cano Health Inc.,

CANO 32.17%

according to people familiar with the situation, as healthcare heavyweights scramble to snap up primary-care providers.

The talks are serious and a deal to purchase Cano could be struck in the next several weeks, assuming the negotiations don’t fall apart, some of the people said. Cano shares, which had been down nearly 7%, turned positive and closed up 32% after The Wall Street Journal reported on the talks with Humana and other unnamed parties, giving the company a market value of roughly $4 billion.

Bloomberg subsequently reported CVS’s interest.

It couldn’t be learned which other potential buyers might be in the mix, but Cano could be Humana’s to lose as the health insurer has a right of first refusal on any sale, part of an agreement that was originally struck in 2019.

Miami-based Cano operates primary-care centers in California, Florida, Nevada, New Mexico, Texas, Illinois, New York, New Jersey and Puerto Rico, according to documentation from the company. It mainly serves Medicare Advantage members, a private-sector alternative to Medicare for seniors.

Ties between the companies run deep: Cano was Humana’s biggest independent primary-care provider in Florida, serving over 68,000 of its Medicare Advantage members at the end of last year, according to a securities filing. Cano also operated 11 medical centers in Texas and Nevada for which Humana is the exclusive health plan for Medicare Advantage, the filing added.

Humana has already established a footprint in primary care, which it continues to expand. Earlier this year, its CenterWell Senior Primary Care business joined with private-equity firm Welsh, Carson, Anderson & Stowe to open about 100 new senior-focused primary-care clinics between 2023 and 2025, building on an earlier, similar partnership.

At its investor day last week, Humana’s chief executive,

Bruce Broussard,

said that the company sees a total addressable market of over $700 billion in “value-based” primary care for seniors. He noted that Humana has accelerated its investment in the sector over the past five years, becoming the nation’s largest senior-focused primary-care provider.

There has been a frenzy of deal making involving large companies scooping up primary-care assets as a means of getting closer to patients and providing them more personal service.

Amazon.com Inc.

agreed to purchase the parent of primary-care clinic operator One Medical for about $3.9 billion in July, while CVS Health Corp. agreed to buy

Signify Health Inc.

for $8 billion earlier this month.

Cano went public in 2020 through a special-purpose acquisition vehicle backed by real-estate investor

Barry Sternlicht,

who sits on its board. The deal valued the company at $4.4 billion.

Cano has been the target of two shareholder activists this year, both of which independently pushed for its sale.

Dan Loeb’s

Third Point LLC currently has a roughly 5% stake in the healthcare company. In March, he pointed to the market’s unfavorable view of companies that went public through SPACs as a reason to explore strategic alternatives.

Then in late August, Owl Creek Asset Management LP sent a letter to Cano’s board stating that it had amassed a roughly 4% stake and urged the company to hire investment bankers to explore a sale to a strategic buyer.

Cano has been backed by health-care-focused private-equity firm InTandem Capital Partners since 2016. The firm mainly makes investments in small-to-midsize companies.

Write to Laura Cooper at laura.cooper@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the September 23, 2022, print edition as ‘Humana, CVS Target Cano Health.’

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Worker shortages in education, healthcare and rail jobs are fueling labor crises

Exhausted workers in education, healthcare and the railroad industry are pushing back after months of staffing shortfalls

Striking nurses demonstrate for better working conditions on the public sidewalks outside Riverside Hospital on Sept. 13 in Minneapolis. (Annabelle Marcovici for The Washington Post)

The U.S. economy came within hours of shutting down because of a standoff between unions and railroad carriers over sick pay and scheduling, highlighting just how dramatically staffing shortages have reshaped American workplaces and driven exhausted workers to push back.

With more than 11 million job openings and only 6 million unemployed workers, employers have struggled for more than a year to hire enough people to fill their ranks. That mismatch has left employees frustrated and burnt out, and is fueling a new round of power struggles on the job.

While the railway dispute, which the White House helped resolve early Thursday, has garnered the most attention, a number of other strikes are spreading across the United States. Some 15,000 nurses walked out of the job in Minnesota this week, and health-care workers in Michigan and Oregon have recently authorized strikes. Seattle teachers called off a week-long strike, delaying the start of the school year.

At the center of each of these challenges are widespread labor shortages that have caused deteriorating working conditions. Staffing shortfalls in key industries, such as health care, hospitality and education, have put unprecedented pressure on millions of workers, igniting a wave of labor disputes as well as new efforts to organize nationwide.

Everything you need to know about the averted rail strike

Too many industries are still struggling to find workers. The share of working-age Americans who have a job or are looking for one is at 62.4 percent, a full percentage point lower than it was in February 2020, according to Labor Department data.

The reasons are complex and broad. Early retirements, a massive slowdown in immigration that began during the Trump administration, as well as ongoing child care and elder care challenges combined with covid-related illnesses and deaths have all cut into the number of available workers.

“We have approximately 2.5 million fewer people in the labor force than we were on track to have with pre-pandemic trends,” said Wendy Edelberg, director of the Hamilton Project at the Brookings Institution. “That’s a big number, and it means that people who are still there, who are still working these jobs, are having to do even more.”

The stress of working at a job that’s understaffed is playing a big role in workers’ demands, which often revolve around staffing — or lack of it. Seattle teachers wanted better special education teacher-to-student ratios. Railroad conductors and engineers were asking for sick leave. And the nurses who stopped work in Minnesota said they’re looking for more flexible schedules and protections against retaliation for reporting instances of understaffing.

“If you look at sectors like nursing homes, local schools, railroads — employment has fallen like a stone,” said Lisa Lynch, an economics professor at Brandeis University and former Labor Department chief economist. “And with that, you see a marked increase in labor action and strike activity. People are tired and overworked.”

Biden scores deal on rail strike, but worker discontent emerges

Although the U.S. economy has officially recouped the 20 million jobs it lost at the beginning of the pandemic, the gains have been uneven. Major shortfalls remain, particularly in low-wage industries that have lost workers to higher-paying opportunities in warehousing, construction, and professional and business services. The hospitality and leisure industry is still down 1.2 million jobs from February 2020. Public schools are missing nearly 360,000 workers and health care has yet to recover 37,000 positions. Rail transportation, meanwhile, is down 12,500 jobs.

After months of juggling extra duties, Sabrina Montijo quit her $19-an-hour teacher’s aide job in the Bay Area in August. She now cares for her two young children full-time and says she isn’t sure when she’ll return to the workforce.

“Ever since the pandemic started, we were incredibly short-staffed,” Montijo, 33, said. “I had to work off-the-clock because there was nobody there. We couldn’t find staff and if we did, we were constantly having to train someone, always having to start over.”

Between the added pressure at work and trouble finding affordable child care, she says it just made sense to leave. Managing on just one income from her husband’s job as a butcher at Safeway hasn’t been easy, but Montijo says it’s better than the alternative.

“It got to the point where I didn’t feel like I had a choice,” she said. “I was having to set up arts and crafts, do science projects, make phone calls and talk to parents — all at the same time. There’s only so much one person can do.”

America faces catastrophic teacher shortage

Worker burnout has become a persistent problem across the economy, though labor economists say it is especially pronounced in industries with acute labor shortages. Many front-line workers in retail, restaurants, education and health care who worked throughout the pandemic — often putting their health and well-being at risk — say their jobs are becoming even tougher as vacancies pile up.

Although employers across the economy say they’re struggling to find and keep workers, labor shortages are most pronounced in retail (where roughly 70 percent of job openings remain unfilled), manufacturing (about 55 percent) and leisure and hospitality (45 percent), according to a U.S. Chamber of Commerce analysis of Labor Department data.

“When you look at the jobs that are having trouble hiring, it’s the ones with really long hours, inflexible schedules, not great pay and limited benefits,” said Paige Ouimet, a professor at the University of North Carolina’s Kenan-Flagler Business School who focuses on finance and labor economics. “Running your workers like this — asking them to do 20, 30 percent more because you’re short staffed — it’s very much a short-term strategy. You’re going to keep losing people.”

In many cases, employers have begun raising wages in hopes of attracting new workers. The highest wages gains have been in the lowest-paying industries, like hospitality, where average hourly earnings are up 8.6 percent from a year ago. (That’s compared to an increase of 5.2 percent for all workers.)

But while those pay increases may not be going far enough in attracting or keeping workers, economists say they are contributing to inflation. Restaurants, airlines, health-care companies and transportation providers are all charging more, in part, they say, because of rising labor costs.

Aveanna Healthcare, which provides home health care and hospice services, is collaborating with the Medicaid programs it works with to increase reimbursement rates to offset higher pay for nurses.

“Inflation has driven our workforce to seek employment that can and will pay higher wages,” Tony Strange, the company’s chief executive, said in an earnings call last month. “We need to increase caregiver wages on average 15 percent to 25 percent in certain markets that we serve. We will systematically go through state by state and contract by contract and adjust reimbursement rates.”

As covid persists, nurses are leaving staff jobs — and tripling their salaries as travelers

New inflation data released this week showed that prices remained stubbornly high, in large part because of rising costs for services including health care and transportation. Unlike prices for TVs and furniture, which are largely dependent on the cost of materials and shipping, economists say service inflation tends to be closely linked to workers’ wages.

“It is clear that the tight labor market is leading to wage growth, which is leading to price growth,” said Jason Furman, an economics professor at Harvard University. “Inflation in services tends to be much more persistent and it’s much harder to bring down. Gasoline prices are very volatile. Goods prices are somewhat volatile. But in services, if prices are high one month, they’re probably going to remain high next month.”

It’s unclear whether — or when — many of the people who left the workforce during the pandemic will return. That’s particularly true for workers 55 and older, who have stopped working at higher rates. The job market is still short more than 500,000 workers from that age group.

“There’s been a very significant and persistent decline in labor force participation among workers over 55,” said Edelberg of the Brookings Institution. “The pandemic has been a moment of introspection and reevaluation, and it has led a lot of people to step out of the labor force.”

Joseph White, who lives in Nashville, lost his job at Guitar Center six months into the pandemic. But he says he’d had enough: The store was constantly short-staffed and customers were intractable. In one instance, a shopper pulled a gun on him for trying to enforce the company’s mask mandate.

“I’m tired, I’m broken down, worn out and old,” the 62-year-old said. “I was worked to death for so long that finally, I said, there’s no way I’m going back.”

He’s begun drawing on Social Security payments to make ends meet, and helps his wife run her small shop, Black Dog Beads. But White says he has no intention of joining the labor force again.

“Our quality of life is far better even though we have less income,” he said. “I got tired of being a commodity.”

Lauren Kaori Gurley and Jeff Stein contributed to this report.

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Alphabet’s Verily raises $1 billion as tech giants enter red hot healthcare sector • TechCrunch

Verily, the life sciences business under Alphabet, said Friday that it has raised $1 billion, capital that will be used to expand its data-driven healthcare products tailored to individuals.

The round was led by Alphabet, the company said in its announcement.

Verily also announced changes to its executive team that will go into effect January 2023. The company’s founder Andy Conrad will become executive chairman of the Verily board. Stephen Gillett, who is president of the company, will be promoted to CEO. Gillett initially joined Verily as an operational advisor and to lead the company’s cybersecurity efforts. At the time, he was co-founder and CEO of Chronicle, an Alphabet cybersecurity company that is now part of Google Cloud.

Deepak Ahuja is leaving the CFO spot by the end of the month. Ahuja, the former and first CFO at Tesla, has been hired as the first chief financial and business officer at drone delivery and logistics startup Zipline. Ahuja will remain an advisor, the company said, adding that a search for a new CFO will begin immediately.

The influx of capital and executive shuffling come as Verily readies itself for a new phase of growth in a red hot healthcare sector that has attracted tech giants like Amazon and Apple. Earlier this year, Amazon acquired One Medical, a primary care provider that leverages in-person, digital and virtual interactions in its services, in a deal valued at $3.9 billion.

Verily is particularly interested in “precision health,” a term meant to describe combining research, clinical and non-clinical data and computing power to provide healthcare customized to a person’s specific needs. In other words, Verily — which was born out of Google X in 2015 — aims to use technology to provide medical care for individuals instead of everyone.

Verily said the funds may also be used to invest in strategic partnerships, global business development and potential acquisitions. The company has already landed a several partnerships and completed at least one acquisition. In 2021, the company bought research software developer SignalPath to expand its clinical trial system. It also has partnered with Lumea, L’Oreal, the Mayo Clinic and Microsoft.

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Theranos Founder Elizabeth Holmes Seeks New Trial, Citing Fresh Evidence

Elizabeth Holmes,

founder of defunct blood-testing startup Theranos Inc. who was convicted of fraud, has asked a federal judge for a new trial after she said one of the prosecution’s star witnesses visited her house to express regret for his role in her trial, according to a new court filing.

Ms. Holmes said in a filing Tuesday that

Adam Rosendorff,

a former Theranos lab director who testified for five days in her criminal-fraud trial, showed up unannounced at her home Aug. 8. During his visit, Dr. Rosendorff spoke to Ms. Holmes’s partner and said that the government had twisted his testimony that Theranos was “working so hard to do something good and meaningful,” and that he felt guilty “to the point where he had difficulty sleeping,” according to the court filing.

Ms. Holmes is arguing that Dr. Rosendorff’s alleged statements to her partner qualifies her for a new trial or a hearing to discuss the evidence.

A federal jury convicted Theranos founder Elizabeth Holmes on four of 11 charges. Each count carries a maximum prison sentence of 20 years. WSJ’s Sara Randazzo shares highlights from Ms. Holmes’s testimony. Photo: Josh Edelson for The Wall Street Journal

Dr. Rosendorff declined to comment when reached by phone Tuesday. A spokesman for the U.S. attorney’s office for the Northern District of California declined to comment.

The filing is the latest twist in a spectacle-laden criminal-fraud saga that began to play out in court a year ago and became one of the most closely watched white-collar cases in Silicon Valley history. Ms. Holmes in January was convicted on four counts of criminal fraud for deceiving investors while running a yearslong scheme at Theranos, where she was chief executive. Her one-time business and romantic partner, former Theranos president Ramesh “Sunny” Balwani, was convicted of 12 fraud counts in July.

Ms. Holmes last week requested an acquittal, and during the hearing, her legal team said they had newly discovered information that would help her case but didn’t provide further details. On Tuesday, U.S. District Judge Edward Davila denied the motion for an acquittal. Ms. Holmes is scheduled to be sentenced in October, while Mr. Balwani is set to be sentenced the following month.

At his Aug. 8 visit, Dr. Rosendorff didn’t speak directly to Ms. Holmes but to her partner, Billy Evans, who answered the door, according to Mr. Evans’s account of the exchange, which was filed into court record. Dr. Rosendorff looked disheveled, and his voice trembled as he explained that “he feels guilty,” according to the account. “He said he is hurting,” according to Mr. Evans. Dr. Rosendorff explained that he “tried to answer the questions honestly” during the trial but that the government made things sound worse than they were when he was up on the stand during his testimony. He said he felt as though he had done something wrong, according to the account.

Ms. Holmes is arguing that if Dr. Rosendorff had made such statements in court, it would have significantly bolstered her defense and could have swayed a jury.

The government called 29 witnesses, including other former Theranos lab personnel who testified against Ms. Holmes.

Dr. Rosendorff, a central government witness in Ms. Holmes’s trial, testified on concerns he brought directly to her about Theranos’s technology and his efforts to delay the use of the company’s blood-testing equipment on real patients. As lab director from 2013 to 2014, he told the court that he was responsible for helping respond to doctor and patient complaints about Theranos’s inaccurate lab tests and that he was pressured to find excuses for the erroneous results that deflected the responsibility from Theranos.

On his LinkedIn page, Dr. Rosendorff included a link to a news article from the South African Jewish Report that called him the “medic who helped expose Theranos.”

Dr. Rosendorff revealed during the trial that he was a source for The Wall Street Journal’s reporting on Theranos in 2015 before the paper published a series of articles revealing that Theranos’s finger-stick lab tests were unreliable and that the company often relied on commercial machines instead, but even those test results could be wrong.

One of Ms. Holmes’s attorneys,

Lance Wade,

questioned Dr. Rosendorff in often hostile exchanges for nearly four days, much longer than the government questioned him. Tuesday’s court filing said that Dr. Rosendorff on Aug. 8 left a voicemail with Mr. Wade, asking for a meeting with Ms. Holmes. Mr. Wade didn’t respond before Dr. Rosendorff drove to her house anyway, the court filing said.

Write to Heather Somerville at heather.somerville@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the September 7, 2022, print edition as ‘Theranos’s Holmes Seeks New Trial, Cites Witness Take.’

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FTC Investigating Amazon Deal to Buy One Medical Network of Health Clinics

WASHINGTON—The Federal Trade Commission is investigating

Amazon.com Inc.’s

AMZN -0.24%

$3.9 billion deal to buy

1Life Healthcare Inc.,

ONEM 0.35%

which operates One Medical primary care clinics in 25 U.S. markets.

1Life, which went public in 2020, disclosed the investigation in a securities filing. The disclosure says One Medical and

Amazon

AMZN -0.24%

each received a request on Friday for additional information about the deal from the FTC.

Amazon’s

AMZN -0.24%

bid for One Medical added momentum to the push by technology and retail giants to make inroads into the nation’s $4 trillion healthcare economy. The deal was the first major acquisition announced during the tenure of Chief Executive

Andy Jassy,

for whom expansion into healthcare is a priority.

The FTC’s move to investigate the deal could delay its completion as federal competition investigations often take months to finish. Significant U.S. antitrust probes on average take about 11 months, according to data compiled by law firm Dechert LLP.

FTC Chairwoman Lina Khan is a critic of Amazon, having written a 2017 law review article that argued Amazon’s conglomerate-like structure shouldn’t have escaped antitrust scrutiny. Ms. Khan said Amazon’s entry into businesses beyond its e-commerce platform allowed it to gather data it could use to undercut other companies.

The FTC is investigating Amazon’s Prime membership program, according to a legal petition Amazon filed last month. The company argued that FTC staff had made excessive demands on founder

Jeff Bezos

and other company executives and asked officials to quash the subpoenas.

An Amazon spokeswoman declined to comment.

Mr. Jassy is focused on healthcare as an industry in which Amazon could find significant growth opportunities. The company recently revealed that it plans to shut down a healthcare unit it launched in 2019 called Amazon Care after it announced the One Medical deal.

The transaction would give Amazon more than 180 clinics with employed physicians across roughly two dozen U.S. markets. One Medical Chief Executive

Amir Dan Rubin

is expected to remain as CEO once the deal closes.

The line between Amazon and Walmart is becoming increasingly blurred, as the two companies seek to maintain their slice of the estimated $5 trillion retail market while chipping away at the other’s share, often by borrowing the other’s ideas. Photos: Amazon/Walmart

As Amazon seeks to grow in healthcare, the company faces added challenges from competitors such as

UnitedHealth Group Inc.’s

Optum health-services arm and

CVS Health Corp.

, in addition to hospital systems.

In a memo to employees,

Neil Lindsay,

senior vice president of Amazon Health Services, said the healthcare industry continues to be an important arena for innovation.

“As we take our learnings from Amazon Care, we will continue to invent, learn from our customers and industry partners, and hold ourselves to the highest standards as we further help reimagine the future of health care,” Mr. Lindsay wrote.

Write to Dave Michaels at dave.michaels@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the September 3, 2022, print edition as ‘FTC Probes Amazon Deal for One Medical.’

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Illumina Wins Case Against FTC on Grail Acquisition

Illumina said the judge rejected the FTC’s position that the deal would hurt competition in the market for multicancer early-detection tests.

“As we’ve stated from the outset, this transaction is procompetitive, will advance innovation, lower healthcare costs and save lives,” said Charles Dadswell, general counsel of Illumina.

The decision, which the FTC staff can appeal, suggests the agency could face hurdles as it tries to push into newer theories of harm that can result from unchecked merger activity. The FTC alleged Illumina’s purchase of Grail could diminish innovation—a concern that goes beyond antitrust’s traditional focus on price levels and output.

In a statement, FTC Bureau of Competition Director Holly Vedova said the agency’s staff is disappointed with the decision and believes it mounted a strong case. “We are reviewing the opinion and evaluating our options,” Ms. Vedova said.

San Diego-based Illumina, which makes genetic-sequencing products, agreed in 2020 to acquire Grail, which is developing blood tests for early cancer detection. Illumina founded Grail and had spun it off in 2017, retaining a minority ownership stake. The 2020 deal was to acquire the part of Grail that it didn’t already own.

But in 2021, the FTC moved to block the deal, claiming that it would harm competition in an emerging field of tests for early-stage detection of multiple types of cancers.

The FTC said Grail and other developers of early-stage cancer tests all rely on Illumina’s DNA-sequencing platform. “If the acquisition is consummated, Illumina will gain the incentive to foreclose or disadvantage firms that pose a significant competitive threat to Grail,” the FTC wrote in its complaint last year. Illumina countered that it has made an open offer to provide continued access to its DNA sequencing to any Grail competitors.

Illumina closed its acquisition of Grail in 2021, despite the pending legal challenges.

The case isn’t the first time that Chief Administrative Law Judge D.

Michael Chappell

has ruled against the FTC on one of its lawsuits. Earlier this year, he rejected the FTC’s challenge of

Altria Group Inc.’s

purchase of a large stake in e-cigarette maker Juul Labs Inc. The FTC’s staff appealed that decision. The case is now pending before the commissioners.

Judge Chappell also ruled against the FTC in a data-security case in 2015.

The FTC under Chair Lina Khan has investigated more proposed mergers and vowed to take a stronger position against deals that could threaten competition. Ms. Khan has said antitrust enforcers need to be more forward-looking, prioritizing concerns such as preserving incentives for innovation, protecting workers and buttressing small businesses.

Illumina’s deal was an example of vertical merger, a type of transaction that integrates complementary instead of competing companies, allowing the combined firm to expand into new or related businesses or lower its input costs. Vertical deals have often been viewed with far less skepticism, but the FTC last year withdrew guidelines for reviewing them, indicating enforcers planned to apply tougher scrutiny to them.

“This case was always something of a stretch,” said

Stephen Calkins,

a law professor at Wayne State University. “It was a vertical case, which is a challenging area of law, and the law judge conspicuously noted during the oral arguments that there were very high stakes in terms of healthcare innovation.”

Illumina’s legal challenges aren’t over, as the FTC’s staff could appeal Judge Chappell’s decision to the agency’s commission. The commission authorized the legal challenge to the deal in March 2021 on a bipartisan vote. If the commission overruled Judge Chappell, the companies could take their case to a federal appeals court.

The FTC had initially sought a federal court injunction that would have blocked the closing of the acquisition, but it backed off because Illumina and Grail were facing antitrust scrutiny in Europe.

Instead, the FTC proceeded with an administrative complaint over the deal, resulting in a trial before an administrative law judge in August and September of 2021. The new ruling arises from that trial and post-trial briefs filed by Illumina and the FTC.

In July, a European Union court ruled that the EU’s competition regulator has jurisdiction to review the Illumina-Grail deal under European merger regulations. Illumina said it intends to appeal that decision. The European Commission said in July that Illumina’s decision to complete the Grail deal breached European regulations.

Illumina is keeping the Grail business separate from the rest of its business while these legal challenges play out.

For Illumina, full control of Grail would give it a solid position in what analysts estimate could be a $50 billion market for tests that can detect multiple cancers early.

Last year, Grail introduced Galleri, a test designed to detect more than 50 types of cancer. The test is intended for people with elevated risk of cancer, such as adults 50 and older, and as a complement to standard single-cancer screening tests. Galleri costs about $950 per test and generally isn’t covered by insurers.

But Galleri sales to date have been lower than expected, as some health systems have taken a measured approach toward using the test.

“We believe it’s a fantastic test,” Illumina Chief Executive Francis deSouza said in an interview. “We believe that in Illumina’s hands, we can make this test available to more people, more affordably and more quickly than in Grail’s hands.” He added that it could save many lives and healthcare costs.

Illumina shares declined 0.5% to $200.62 Thursday. SVB Securities analysts said in a research note that despite the win, there continues to be regulatory uncertainty around the deal, delaying Illumina’s full integration of Grail and its benefits.

Write to Peter Loftus at peter.loftus@wsj.com and Dave Michaels at dave.michaels@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Latest Covid Boosters Are Set to Roll Out Before Human Testing Is Completed

The Food and Drug Administration is expected to authorize new Covid-19 booster shots this week without a staple of its normal decision-making process: data from a study showing whether the shots were safe and worked in humans.

Instead, the agency plans to assess the shots using data from other sources such as research in mice, the profiles of the original vaccines and the performance of earlier iterations of boosters targeting older forms of Omicron.

“Real world evidence from the current mRNA Covid-19 vaccines, which have been administered to millions of individuals, show us that the vaccines are safe,” FDA Commissioner

Robert Califf

said in a recent tweet. The FDA pointed to Dr. Califf’s tweets when asked for comment.

Clearance of the doses, without data from human testing known as clinical trials, is similar to the approach the FDA takes with flu shots, which are updated annually to keep up with mutating flu viruses.

Some vaccine experts have urged the agency to wait before clearing the new Covid-19 booster doses.



Photo:

EMILY ELCONIN/REUTERS

The approach has raised concerns, however, among some vaccine experts who have urged the agency to wait.

“I’m uncomfortable that we would move forward—that we would give millions or tens of millions of doses to people—based on mouse data,” said

Paul Offit,

an FDA adviser and director of the Vaccine Education Center at Children’s Hospital of Philadelphia.

The comparison with flu vaccines isn’t sound, Dr. Offit said, because flu viruses mutate so rapidly that shots from one year don’t offer protection for the next, while currently available Covid-19 shots continue to keep people out of the hospital.

In addition to evaluating the boosters without clinical-trial data, the FDA won’t convene another element from its earlier Covid-19 vaccine reviews: a meeting of advisers who make recommendations whether the agency should authorize a shot.

Retooled Covid-19 boosters are similar to the original shots, including Moderna’s Covid-19 vaccines, seen last year, but have been customized to fight the latest variants.



Photo:

andrew caballero-reynolds/Agence France-Presse/Getty Images

The FDA scrapped the meeting, Dr. Califf said in his tweets on the subject, because the committee discussed the matter in June, and the agency doesn’t have new questions warranting its input.

The Covid-19 vaccines available in the U.S., which were first authorized for use in December 2020, haven’t been modified until now, though the virus they were designed to target has evolved.

The shots held up well against earlier strains, researchers found, but weren’t as effective against the newest Omicron subvariants like BA.5.

In planning for a fall booster campaign, federal health authorities in late June directed

Pfizer Inc.

and its partner

BioNTech SE,

and

Moderna Inc.

to update their shots to target BA.5, an Omicron subvariant called BA.4 and the original strain of the virus.

“We’ve validated the process several times over and continue to produce safe and effective vaccines against Covid-19,” a Pfizer spokeswoman said. Moderna said all current data indicates its shots are safe and effective.

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Human trials for Moderna’s vaccine targeting the subvariants have started, and for the Pfizer-BioNTech vaccine are expected to start this month, the companies have said. Results won’t be available, however, before the U.S. government’s planned fall booster campaign.

“If we waited for clinical-trial results, thank you very much, we’d get them in the spring. It takes time to do clinical trials,” said

William Schaffner,

professor of medicine at Vanderbilt University Medical Center and a nonvoting liaison to the Centers for Disease Control and Prevention committee that will decide whether to recommend the shots, should the FDA sign off. “This is just an updating of the previous vaccine that we used.”

The retooled shots are similar to the original shots, but customized to fight the latest variants, much like keys that are nearly identical but have slightly different ridges and valleys, said

John Grabenstein,

director of scientific communications for Immunize.org, a nonprofit that seeks to boost immunization rates.

With each mutation, the Covid-19 virus is becoming more transmissible. WSJ’s Daniela Hernandez breaks down the science of how Covid variants are getting better at infecting and spreading. Illustration: Rami Abukalam

The similarities make it very reasonable for regulators to weigh the overwhelmingly safe track record of the original series when considering the new shots, he said.

The FDA has reviewed test results from a shot that Moderna modified to target an early version of Omicron as well as the ancestral strain of the coronavirus. The study found the shot generated a significant amount of antibodies in humans compared with the company’s currently available booster shot. That shot is now approved in the U.K.

The agency also looked at human data from Pfizer and BioNTech finding that their experimental shots, updated to target an earlier form of Omicron, also boosted antibody levels significantly. The companies have submitted one of those shots to the U.K., EU and Canada for authorization, Pfizer has said.

Such findings give the FDA confidence that the newest modified shots will also work well, said a person familiar with the agency’s deliberations.

“As we know from prior experience, strain changes can be made without affecting safety,” Dr. Califf said in a tweet.

Dr. Offit, however, said he would like to wait for clinical-trial data showing the shots are effective before asking people to take them.

“If you have some evidence that this is likely to be of value, sure,” he said. “But if you don’t have evidence, and you know that the current vaccine does offer protection against severe disease, I don’t think it’s fair to ask people to take risks.”

Write to Liz Essley Whyte at liz.whyte@wsj.com

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