🌊 Sho-me the Money

Plus: Shohei Ohtani’s translator charged with allegedly stealing $16M from him

America the Beueautiful?

In 2019, before the US' most misspelled word became "quarantine" (no, "corn-teen" isn't right), the US had a beautiful problem. As in, we couldn't spell it. The leading "how to spell" Google searches in California, Texas, and Florida were all "beautiful." Puzzlingly, Hawaii's top one was… "Hawaii."

In today's edition:

US Coast Guard rescues castaways

🏝 Beer Can Island for sale for... how much?

💊 Why are drug prices so high: Part 2

–Max, Max, Jen, and Alex

KEY STORY

Ohtani’s Translator Charged

Federal authorities accused Shohei Ohtani’s translator of stealing $16M from the superstar

  • Last month, Ohtani’s translator, Ippei Mizuhara, was accused of stealing millions of dollars from Ohtani, an MLB superstar, to pay off gambling debts. At the time, reports claimed at least $4.5M had been stolen

  • On Thursday, federal authorities accused Mizuhara of stealing $16M “without [Ohtani’s] knowledge or permission.” They charged him with bank fraud, which carries a maximum prison sentence of 30 years. He is reportedly in negotiations with prosecutors to plead guilty

Dig Deeper

  • Per an affidavit, in 2018, Mizuhara accompanied Ohtani to a bank to help him set up an account. Three years later, Mizuhara began losing “substantial sums of money” gambling and, around that time, the contact information on Ohtani’s bank account was changed

  • Prosecutors claim the changed contact information routed to Mizuhara’s phone and email. At one point, Mizuhara allegedly falsely identified himself as Ohtani to authorize illegal wire transfers

KEY STORY

Iran Attack Imminent?

The US’ seniormost official in the Middle East is expected to travel to Israel amid fears of an imminent Iranian attack

  • Last week, an Israeli strike on Iran’s embassy complex in Syria’s capital killed a top Iranian general, prompting Iranian officials to vow retaliation

  • On Wednesday, Iran’s leader suggested that Iran may strike Israel directly; in response, Israel said it would respond to any Iranian attack from its soil with an attack on Iranian targets

  • On Thursday, the US and its allies stepped up their efforts to dissuade Iran from attacking Israel, citing the risk of escalation

Dig Deeper

  • An Iranian news outlet wrote on Wednesday that “the time is ripe to punish Israel.” Another with close ties to Iran’s military wrote that the Iranian response would be “heavy”

  • The foreign ministers of Saudi Arabia, Germany, Qatar, Iraq, and other countries reportedly spoke with their Iranian counterpart on Thursday, urging restraint. Several of those foreign ministers did so at the urging of prominent US officials, Axios reported

KEY STORY

US Rescues Castaways

The US Coast Guard (USCG) rescued three men stranded on a remote Pacific island who had spelled “HELP” on a beach with palm fronds

  • On Easter Sunday, three men set off on a 20-foot boat to Pikelot, a small, uninhabited island in Micronesia. Their boat got damaged, though, stranding them on the island, and the battery in their only radio was dead

  • Days later, US authorities received a call from a woman who said her uncles hadn’t returned from Pikelot. A US Navy plane spotted the word “HELP” on the island, and a USCG ship then rescued the trio

Dig Deeper

  • This wasn’t the first rescue operation centered around Pikelot: In 2020, Australian and US authorities rescued three Micronesians from the island who had written “SOS” on a beach with palm fronds

KEY STORY

Gun Loophole Closed

The Biden administration introduced new rules intended to close the “gun show loophole”

  • Currently, every licensed gun vendor is required to conduct background checks on buyers. However, those who only make part of their living off selling guns – such as those who sell them at gun shows or online – haven’t had to conduct background checks

  • On Thursday, the Biden admin unveiled new rules to close that “gun show loophole.” The rules define as gun dealers anybody who “devote[s] time, attention, and labor to dealing in firearms” to “earn a profit.” The administration said the rules will require those who sell guns online or at gun shows to register as federally licensed firearms dealers, meaning they have to conduct background checks

  • Biden admin officials said they believe the rules will hold up to legal challenges, although Republicans have called them unconstitutional and said they will try to force the federal government to undo them

Dig Deeper

  • Federal data currently show that 22% of Americans obtained their firearm without a background check, although it’s unclear how many of them bought their weapon online or at a gun show

  • The new rules will force ~20,000 firearms dealers who currently do not have to perform background checks to begin doing so

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RUNDOWN
Some Quick Stories for the Office

🧤 OJ Simpson, an NFL star running back and later accused murderer, died on Thursday after a battle with cancer. He was 76. OJ was accused of murdering his wife, Nicole Brown, and her friend in 1994. He was later acquitted in what was one of the US’ most high-profile trials ever

🇻🇳 Vietnam sentenced a prominent billionaire to death for embezzling $12.5B. The billionaire and others are also accused of giving a $5.2M bribe to try to hide their crimes, the largest in Vietnam’s recorded history

🔗 A judge denied a request for release from a woman convicted of stabbing a friend to gain favor with the fictional character Slenderman 

🇵🇸 Samantha Power, the director of the US Agency for International Development, said famine has already begun in Gaza, making her the first prominent US official to make that claim

🎲 Margot Robbie, Lionsgate, and Hasbro Entertainment will produce a live-action feature film based on the Monopoly board game 

🎒 Harvard said it will reinstate its standardized testing requirement beginning with the Class of 2029

COMMUNITY

We have been humbled by the feedback to our new podcast We the 66. We wanted to share some of Roca’s replies below. We are so grateful for your support — and more motivated than ever to continue these conversations with people Big News doesn’t want you to hear.

“I love the new podcast! As a 19 year old New Yorker and student at Syracuse University, it’s often extremely difficult to inform myself in a nonbiased way. As I’m sure you know, big news and people outside of it are always trying to pull your opinion one way or another. I hope to someday join the fight against big news myself!”

“I just finished watching the interview with Dr. Martin Kulldorff. I found the entire discussion to be a breath of fresh air (to steal your words). I thought, finally some people who are willing to talk about the things nobody talks about. Or maybe they were talking about it all along but it never reached my ears... I appreciate the way you as hosts bring a relatable feeling to the room”

“Grateful to have a source I trust exploring the issues that have been (likely deliberately) too confusing to get to the bottom of and further causing me a lot of anxiety these days. Let’s get to it!!!! Proud of the growth and direction you’ve taken and can’t wait for more.”

Yesterday’s Poll:

Which celebrity’s opinion matters the most to you?
Kim Kardashian: 2%
Tom Hanks: 20%
Nicolas Cage: 15%
Rihanna: 7%
Elon Musk: 56%

POPCORN
Some Quick Stories for Happy Hour

🚔 Ocean’s E-Lego: In a series of raids in Southern California, police seized $300,000 worth of Legos stolen from Target, Home Depot, and Lowe's

🏝 My name is Florida, and I like to party: An island in Florida nicknamed “Beer Can Island” is listed for over $14M. One campaign is underway to buy it via $1,000 shares to people who like to party there

🚽 Turd burglar: Police arrested a 22-year-old Ontario woman for a break-in during which she allegedly left “a large bowel movement” in the victims’ toilet

 Unholy ad: Italy’s advertising agency banned a potato chip commercial that Catholic groups deemed blasphemous. It shows nuns receiving snacks as communion

RIP, skiing daredevil: A 21-year-old skier died from injuries sustained while performing a stunt on a highway near Colorado’s Berthoud Pass, a popular spot for backcountry skiers

🔫 At least they’re off TikTok! Police in Chicago suburbs are warning their communities about a water gun game called “Senior Assassins” that high school seniors play. In one town, seniors played it in ski masks

ROCA WRAP
Why Keeps Drug Prices So High? Part 2

While the US government doesn’t directly negotiate private market drug prices, its policies are intimately linked with drug costs.

As mentioned in yesterday’s installment, roughly one in ten drugs make it to market. Those that do cost over $1B to get there.

Drug companies often blame those costs on the Food and Drug Administration (FDA), which they accuse of making the drug approval process unnecessarily costly and difficult.

On the other hand, though, studies have found a “revolving door” between the FDA and pharmaceutical companies. A 2016 study found that 57% of FDA drug reviewers in the hematology-oncology field later worked or consulted for the pharma industry.

Robert Califf – the current FDA commissioner – formerly consulted for Merck, Johnson & Johnson, GlaxoSmithKline, and AstraZeneca; Scott Gottlieb, Donald Trump’s FDA commissioner for two years, joined Pfizer’s board three months after leaving government. Some people cite such trends to claim that pharma companies have “captured” the FDA.

While pharma companies complain about the barriers to bringing drugs to market, those barriers also help them profit off the drugs they make.

For example, high drug costs justify patent protections: To protect drug developers, the government grants drug companies patents, typically for a period of 20 years. The US also grants “exclusivity” rights, or periods during which certain brand name drugs are protected from competition. Patents and exclusivity are different but work toward the same outcome: Limiting the ability of other companies to compete with new drugs, helping drug developers set their own prices.

Patents protect intellectual property, thereby protecting pharma companies’ profits and encouraging them to develop new drugs.

But Daniel Aaron, a law professor at the University of Utah, told Roca that such systems are rife with abuse. “Pharmaceutical companies have used an array of tactics involving the patent system, contract law, FDA, and lawsuits to ensure that pharmaceutical prices remain high,” he said.

One such tactic is a patent thicket, wherein companies secure a series of overlapping patents for a single drug, increasing barriers against competition and extending patent life.

Stanford professor Michelle Mello has attributed high drug prices in part to perverse incentives, which pit “players – for example, patients and their health plans – against one another.” For example, some Medicare rules pay doctors more for prescribing more expensive drugs, and PBMs, which negotiate drug prices, make more off drugs with higher list prices. That means that companies aren’t incentivized to offer patients cheaper drugs.

To get a seat at the table in Washington, DC, pharmaceutical companies lobby.

According to Open Secrets, the industry spent $381M+ on lobbying in 2023 – the most of any industry and 58% more than the next-closest industry.

“A bunch of money is being thrown at key officials,” OJ Wouters, an assistant professor at the London School of Economics, told Roca. The money often targets “the chair or the ranking member of [Congressional] committees,” although he couldn’t gauge its specific effects. He said the strategy “suggests they are trying to gain preferential access to these legislators.”

For years, the political left in the US has been critical of alleged greed by the pharma industry.

Meanwhile, pharma companies often direct blame at PBMs, which they accuse of not handing down savings to consumers. A representative for PhRMA, the leading pharma industry group, told Roca that PBMs “have enormous control over what medicines people can get and what they pay out of pocket at the pharmacy,” which, he said, is why PBMs are now the target of “lawsuits, investigations, and regulation.”

Many on the right, meanwhile, criticize other countries for allowing American prices to subsidize their drug costs. Donald Trump summarized that viewpoint in a 2020 executive order: “Other countries’ governments regulate drug prices by negotiating with drug manufacturers to secure bargain prices, leaving Americans to make up the difference – effectively subsidizing innovation and lower-cost drugs for the rest of the world.”

He enacted a rule that would have restricted government reimbursements to European prices for 50 drugs, only to have a court side with a lawsuit filed by the pharma industry and block it.

In 2022, President Biden signed the Inflation Reduction Act (IRA), which allowed Medicare to directly negotiate the prices of some prescription drugs for the first time. Drug companies can counter or refuse Medicare’s offer, but if they don’t reach a deal, they may face substantial taxes and penalties.

While pharma companies have since sued over that law, claiming it amounts to extortion and will block innovation, Biden has declared victory over high drug prices, saying this week, “We beat Big Pharma.”

Yet can any one law shake up such a powerful and complicated industry?

Reply to this email to let us know what you think!

COMMUNITY
20 Questions

As is Roca tradition, every Friday we ask our readers 20 questions or polls and include the answers the following Friday. Let us know your thoughts!

20 questions logo

Ladies and gentlemen, the Weeknd. For 20 Questions this week, we bring back a 20 Questions prompt: This or that, Regional Slang edition. We give you 2 options ("soda" or "pop") and let you decide which is better. Also, we apologize if the options are too limited for some of these. I know our Georgia readers would love to write in "coke," for example...

Here’s the link! Have a wonderful weekend.

Last Week’s 20 Questions:

Last week we announced our new podcast and dedicated 20 questions to crowd sourcing interviews and topics from you. We’re excited to bring you some of those requests in the coming weeks!

EDITOR’S NOTE
Final Thoughts

What a week for Roca! A new pod, a revised premium newsletter, and a growing community of folks who are in the same fight against biased Big News.

Have a great weekend, Roca — and see you on Monday!

— Max, Max, Alex and Jen