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Three decades ago, Congress listened to the plight of Americans sick with diseases so rare many people had never heard of them. They were victims of a pharmaceutical market failure — “orphans” ignored by drug companies because, the thinking went, tiny groups of patients would lead to trifling sales.

Questions:
1. What is the Orphan Drug Act and what was it meant to do?
2. How has the situation changed since the passing of this law in 1983?
3. Why do critics and healthcare professionals think that this law has backfired? What is your opinion?
4. If reality is detached from a law’s original rationale, what should be done? Is this a common course of action? Give an example.
5. What other industries other than the pharmaceutical industry would be affected and why?
6. Would you consider some companies to be price gouging as a result? Why or why not?

Source:
Johnson, C. (2016). High prices make once-neglected ‘orphan’ drugs a booming business. The Washington Post, August 4 (Retrievable online at https://www.washingtonpost.com/business/economy/high-prices-make-once-neglected-orphan-drugs-a-booming-business/2016/08/04/539d0968-1e10-11e6-9c81-4be1c14fb8c8_story.html?tid=a_inl)

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Aetna announced this week that it pull a majority of its participation in the insurance exchanges set up under the Affordable Care Act. Critics see this as payback to the Obama administration for blocking its proposed merger with Humana. This comes after Aetna CEO, Mark Bertoilini is on record as saying that selling insurance in the exchanges is a good investment.

Questions:
1. What do you see as the most contradicting evidence regarding Aetna’s participation in the exchanges? Discuss. What is your opinion about Aetna’s decision in this story? Political or not?
2. Which U.S. Senators have been vocal about Aetna’s decision to pull out of the exchanges? Could anything have been done to the Act when passed to prevent this? Discuss.
3. Other than accept Aetna’s decision or reverse the position regarding the Humana merger, does the government have any other options? Discuss.
4. Which states will be affected?
5. Have there been any other companies pulling out of the exchanges? Discuss.

Source:
Johnson, C. (2016). Aetna warned it would drop out of Obamacare exchanges if its merger was blocked. The Washington Post, August 17 (Retrievable online at https://www.washingtonpost.com/news/wonk/wp/2016/08/17/aetna-warned-it-would-drop-out-of-obamacare-exchanges-if-its-merger-was-blocked/)

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A Manhattan federal jury rejected claims by a former high-flying Wall Street executive that he was in the dark about his dad’s illegal trading of several health care mergers the banker son was privy to.

Questions:
1. What is the maximum sentence that Sean Stewart faces? What is the likely sentence?
2. What amount of money did Robert Stewart (Sean’s dad) make from the insider trades?
3. What evidence did the government counter with after Sean took the stand and told the jury that his father used him, resulting in the loss of his career and reputation?” What piece of evidence was probably most likely to have the entire jury find Sean guilty?
4. What was Robert Stewart’s (Sean’s dad) sentence? What was Robert’s role in Sean’s trial?

Source:
Whitehouse, K. (2016). Blaming dad didn’t help ex-banker accused of insider trading. The New York Post, August 17 (Retrievable online at http://nypost.com/2016/08/17/blaming-dad-didnt-help-ex-banker-accused-of-insider-trading/)
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Unilever is paying $1 billion for Dollar Shave Club, a five-year-old start-up that sells razors and other personal products for men.

Questions:
1. Why does the author of this article say that all companies should be very afraid of this deal?
2. After Michael Dubin’s YouTube ad premiered, what happened in terms of orders and financial changes for the company?
3. What types of changes in technology allowed this company’s distribution apparatus to shift to a nontraditional model and how did these work to propel the firm?

Source:
Solomon, Steven D. (2016). $1 Billion for Dollar Shave Club: Why Every Company Should Worry. The New York Times, July 26 (Retrievable online at http://www.nytimes.com/2016/07/27/business/dealbook/1-billion-for-dollar-shave-club-why-every-company-should-worry.html)

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Yahoo announced, finally, that its core internet business would be sold to Verizon for $4.83 billion in cash.

Questions:
1. What was Yahoo valued at in 2000?
2. Explain some of the forces that led to the end of Yahoo as we know it.
3. Who is the chief executive of Yahoo and how long was this person there?

Source:
Tam, Pui-Wing. (2016).What Goes Up Must Come Down: The End of Yahoo as We Know It. The New York Times, July 26 (Retrievable online at http://www.nytimes.com/2016/07/27/technology/what-goes-up-must-come-down-the-end-of-yahoo-as-we-know-it.html).

Yahoo

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Ray Dalio, billionaire founder of the world’s largest hedge fund, Bridgewater Associates, claims that one of his firm’s core operating principles is “radical transparency, regarding employee grievances and concerns. However, according to Stevenson and Goldstein in this New York Times article, at least one Bridgewater employee sees the firm as a “cauldron of fear and intimidation.”

Questions:
1. The employee mentioned in the article filed a complaint against Bridgewater. Who was it filed with?
2. Because secrecy at Bridgewater is so tight, what are employees in some units required to do each morning?
3. Who is James Comey and what is his connection to this story?

Source:
Stevenson, A. and M. Goldstein. At World’s Largest Hedge Fund, Sex, Fear and Video Surveillance. The New York Times, July 26, 2016 (Retrievable online at http://www.nytimes.com/2016/07/27/business/dealbook/bridgewater-associates-hedge-fund-culture-ray-dalio.html).

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In a memorable episode of Seinfeld, two characters hatch a plot: instead of returning bottles in New York for a 5-cent refund, they round up a load of containers and run them to Michigan, where the return is double, at 10 cents each. Now Brian Everidge is accused of attempting to “return” more than 10,000 bottles from other states.

Questions:

1. Did Brian Everidge’s conduct go far enough to say he “attempted the crime, rather than was he just thinking about it?”
2. How is the deposit cost paid for in Michigan?
3. What happens if the deposit is not claimed?
4. Why was Kramer right that the Cost/Benefit just doesn’t add up? Explain.
5. Explain the illegality of this scam.

Source:
Felton, R. (2016). Man faces prison after allegedly trying to deposit 10,000 bottles in Michigan. The Guardian, July 24 (Retrievable online at https://www.theguardian.com/us-news/2016/jul/24/michigan-bottle-deposit-recycling-seinfeld)

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While strict rules require account holders to affirmatively opt into banking overdraft protection plans, a U.S. subsidiary of the Spanish banking giant, Santander Bank, which acquired Boston-based Sovereign Bank in 2009, crossed the line.

Questions:
1. Briefly summarize what the bank did?
2. Who is the Consumer Financial Protection Bureau and what was their role in this issue?
3. Briefly summarize how each vendor transcript violated deceptive practices.
4. If Santander realized that its telemarketers were being overly aggressive early in the relationship, what should they have done?
5. Do you think that the penalty for unlawful practices is reasonable?

Source:

Zeitlin, M. (2016). How One Bank Tricked Customers Into Paying Overdraft Fees. BuzzFeed.com, July 15 (Retrievable online at https://www.buzzfeed.com/matthewzeitlin/how-one-bank-tricked-customers-into-paying-overdraft-fees?utm_term=.ohqDKbG7K#.tyrpgmB2g)

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Netflix’s growth in the U.S. has slowed dramatically, and the company is adding new international users slower than expected. Statistically, the company added 1.7 million new subscribers in the last three months, which is less than the 2.5 million the company predicted. Just 160,000 of them were in the U.S.

Questions:
1. Netflix is available in every country in the world except which one?
2. After the last quarterly earnings were released, what happened to the stock price? Why?
3. What are Netflix’s plans for its subscription prices?

Source:
Zeitlin, M. (2016). The Great American Netflix Boom Is Slowing Down. BuzzFeed.com, July 18 (Retrievable online at https://www.buzzfeed.com/matthewzeitlin/the-great-american-netflix-boom-is-slowing-down?utm_term=.euqaBMdXB#.pk51WrLyW)

Netflix

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Belkin Antonio Hernandez-Vargas was desperate to see his wife and get out of U.S. custody, so he turned to one of the biggest names in the business of helping immigrant detainees secure bail bonds. As a result, the company Libre by Nexus helped Belkin, an El Salvadorian secure an $8,000 bond after he was able to come up with 20%, or $1,600. In exchange, he agreed to pay $420 a month to wear a GPS tracker on his ankle.

Questions:

1. If Libre by Nexus isn’t licensed to issue bonds, how does this arrangement work?
2. When signing the contract, what are these immigrants agreeing to and how does this lead to so much debt?
3. What is the reason why critics are concerned that pro bono attorneys may drag out immigration cases?
4. In your opinion, what needs to be done about Libre by Nexus and why?
5. What types of bonds are these?
6. According to the article, “unlike criminal bonds, the immigration equivalents — typically in the $7,500 to $15,000 range — require 100% collateral, such as a house or credit card, in addition to a nonrefundable payment of 15% to 20% of the total amount.” Based on this information, what Libre accounts will be affected by these transactions?

Source:
Flores, A. (2016). Immigrants Desperate To Get Out Of US Detention Can Get Trapped By Debt. Buzzfeed News.com, July 23 (Retrievable online at https://www.buzzfeed.com/adolfoflores/immigrant-detainees-and-bail-bond-terms?utm_term=.fw6pVxzQV#.tiDo7PAG7)

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