Episode 841: The Land Of Duty Free

A good haul.

Sergei Bobylev/Sergei Bobylev/TASS

In the 1940s, if you were flying from New York City to London or Paris you would find yourself making a pit stop for fuel on the western coast of Ireland. The Shannon airport at the time wasn’t much to look at, but the passengers arriving there were movie stars and celebrities, basically the super rich. And the people of Shannon realized pretty quickly that they needed to upgrade the local amenities for their wealthy clientele. They hired a man named Brendan O’Regan to make it happen.

Being the quick-thinking entrepreneur that he was, O’Regan convinced the Irish government to create a tax loophole. And thus, duty free stores were born. Today on the show, we follow the surprising origin of duty free, and try to answer the question: Are they really saving you any money?

Music: “Chu Chu” and “Lady Surfing.”

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Pompeo To Kim: Denuclearize And Enjoy 'Future Brimming With Peace And Prosperity'

South Korean Foreign Minister Kang Kyung-wha (left) speaks during a press conference with Secretary of State Mike Pompeo, at the State Department on Friday.

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Secretary of State Mike Pompeo was reluctant to share details of his whirlwind meeting with North Korean leader Kim Jong Un at a joint press conference with South Korean Foreign Minister Kang Kyung-wha on Friday — a day after Pompeo returned from Pyongyang.

But he did expound on the economic benefits North Korea and its people would enjoy if Kim got rid of his country’s nuclear weapons.

“If Chairman Kim chooses the right path there is a future brimming with peace and prosperity for the North Korean people,” Pompeo said.

“If North Korea takes bold action to quickly denuclearize, the United States is prepared to work with North Korea to achieve prosperity on the par with our South Korean friends,” Pompeo added standing beside Kang.

Finally, Pompeo said he and Kim “talked about the fact that America has often had adversaries who we are now close partners with.”

The U.S. and North and South Korean governments are preparing for a historic meeting to address North Korea’s denuclearization on June 12. The summit between Kim and President Trump will be held in Singapore.

Pushed to divulge specifics about the tone of talks with Kim, Pompeo described them as “warm” and said, he is confident the two countries have a “shared understanding of the outcome our leaders want” as well as a “shared vision for what we hope for when this process is completed of what the Korean Peninsula looks like.”

Kang praised recent diplomatic negotiations between the U.S. and North Korea that ended in the release Thursday by North Korea of three Korean-Americans. She called it a “promising signal” for the upcoming summit. But she warned, the next few weeks will be critical, “requiring airtight coordination between” the two countries.

Kang also emphasized that there has been no discussion about reducing U.S. forces in Korea and said it is not up for negotiation. She called it a matter between the U.S. and the South Korea.

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Trump Drug Pricing 'Blueprint' Could Take Years To Build

In a speech Friday, President Trump announced a plan that lists dozens of “potential” steps his team may take to lower drug prices, along with many others that were included in his budget proposal and will require Congressional action.

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President Trump presented a broad-brush outline of how his administration hopes to stem the decades-long increase in prescription drug prices and spending, in a speech Friday in the Rose Garden at the White House.

The administration also released a 39-page document describing a variety of proposals it is either considering or studying in an effort to lower costs to individuals, corporations the government and the economy as a whole.

There were few concrete actions taken today. The plan mostly lists dozens of “potential” steps the administration may take, along with many others that were included in the president’s budget proposal and will require Congressional action. Several options are “requests for information.”

Nevertheless, the President characterized the proposal as “the most sweeping action in history to lower the price of prescription drugs for the American people.”

“We will have tougher negotiations, more competition and much lower prices at the pharmacy counter and it will start to take effect very soon,” Trump said.

The president was accompanied by Health and Human Services Secretary Alex Azar who played a major role in developing the plan.

Trump said he wants to eliminate “middlemen” in the drug industry – which include pharmacy benefit managers and wholesalers — and he criticized industry lobbyists for making a fortune at the expense of taxpayers and patients.

U.S. patients spent nearly $329 billion on prescription drugs in 2016, according to the National Health Expenditures Survey. That’s an increase of about $100 billion in the last 10 years.

Many researchers say the biggest reason behind the rising spending is high prices for prescription drugs. Often, companies are rewarded for setting a high retail price because insurers negotiate discounts off that initial price.

The blueprint released Friday reiterates proposals that were included in the White House budget proposal. Those include, allowing Medicare’s prescription drug plans to slim down the number of drugs they pay for to spark price competition among pharmaceutical companies, and capping how much money Medicare patients themselves can spend on drugs each year.

“On the positive side, I will say that HHS does seem to be paying close attention to this issue, given all the issues they bring up in the blueprint document,” says Walid Gellad, director of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh. “

“On the negative side, it’s a bunch of questions, not a specific plan for how to proceed.”

Azar, in a briefing following the Rose Garden ceremony, acknowledged the plan is sweeping and would take years to implement. He said the administration would pursue those ideas it can get done.

“This is a major restructuring of a huge portion of the U.S. economy. One doesn’t do that lightly,” he said.

The plan, like the budget, also proposes limiting price increases Medicare would pay to the rate of inflation, and changing some rules around generic drug approvals to prevent companies from blocking new generic competition.

Many of those ideas would require legislation and Congressional approval.

Azar, in his briefing, emphasized his desire to change how pharmacy benefit managers operate — specifically a system where they negotiate rebates off high drug prices.

“We are calling into question today the entire structure of using rebates in the pharmacy channel,” he said.

The president also wants to take steps to ensure foreign governments don’t get lower prices for drugs than U.S. taxpayers – which he referred to as “global freeloading.”

“It’s unfair, it’s ridiculous, and it’s not going to happen any longer,” he said.

Critics say that proposal is unlikely to help lower prices here in the U.S.

“Lifesaving medicines aren’t more expensive here because they cost less elsewhere,” Jason Cone, executive director of Doctors Without Borders USA, wrote in an article published in The Hill. “They’re priced out of reach everywhere because pharmaceutical corporations are charging exorbitant prices simply because they can—and the U.S. government lets them.”

One thing Trump did not propose was to allow Medicare, the government health care program for the elderly, to directly negotiate lower drug prices for its beneficiaries. That’s a change from his rhetoric during his campaign and transition.

“We’re the largest buyer of drugs in the world and yet we don’t bid properly,” he said at a news conference in early January 2017. “We’re going to start bidding and we’re going to save billions of dollars over a period of time.”

But shortly after he moved into the oval office Trump wavered on that commitment, first saying that he didn’t want Medicare to engage in what he called “price fixing” and then, through his former spokesman Sean Spicer, saying once again he favored allowing the federal government program to deal with drugmakers to get lower prices.

Medicare accounts for about one-third of U.S. prescription drug spending. Current U.S. law prohibits Medicare officials from interfering in the negotiations between drugmakers and the insurance companies that administer Medicare’s prescription drug plans.

The only government report that looks at the issue is a 2007 Congressional Budget Office study that concluded that it would have a “negligible effect” on prices.

But Gellad says that report was limited, because it only looked at the effect if Medicare were not allowed to exclude drugs from its coverage list.

“There is no evidence that allowing Medicare to negotiate doesn’t help,” says Gellad. “In fact, the CBO said that in certain circumstances, with the right formulary, this type of negotiation could help.”

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In Vino, Veritas by Numbers

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The wine scoring system was popularized by Robert Parker in the 70s. It has numerous critics. But whatever the system’s merits, the scores themselves do make a big difference for a winery business. Today, we explore the weird world of wine ratings and test the system for ourselves.

Music by Drop Electric. Find us: Twitter/ Facebook.

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