Marketplace - Who can get Ozempic?

Episode Date: September 3, 2024

Nearly a quarter of overweight or obese adults in the U.S. have taken a GLP-1 — a class of weight loss drugs that includes Ozempic. But in some states, Medicaid doesn’t cover GLP-1s, though low-income Americans are more likely to be overweight or obese. In this episode: Who can access or afford this new medicine? Plus, striking hotel workers want higher pay and a return to pre-pandemic norms, the Federal Trade Commission is making it easier to cancel unwanted subscriptions, and the manufacturing sector is in a rut.

What a cooling economy it looks like from the factory floor. Plus, how well all those Russian sanctions are really working. From American public media, this is Marketplace. In Washington, I'm Kimberly Adams in for Kyra's Doll. It's Tuesday, September 3rd. Good to have you with us. It's the beginning of the month, which means we're getting lots of data drops. Today we're starting with the manufacturing sector.

Forecasters expected the news to be bad. And guess what? According to two different reports that came out today, the news was bad, actually worse than expected. The economy might still be growing, but manufacturing is not. It contracted again this month, this time with some of the worst indicators we've seen all year. Marketplace's Kaylee Wells explains. Production is down, new orders are down, sector employment is down, export orders are down.

The one thing that's up is inventory, according to S&P. Although that's bad too. There's just this growing pessimism about the economic outlook globally that's causing this lack of investment, a lack of spending. Chris Williamson is the chief business economist at S&P Global Market Intelligence, which released one of the reports this morning. He's most worried about the decrease in demand and all the inventory piling up that companies will want to sell off before manufacturing again.

Production cuts are going to deepen because you've got your warehouses filling up and you've got a lack of orders coming in. So where's this going to go? He says all that creates the gloomiest production outlook in a year and a half. The biggest villain here is uncertainty. Joseph Sarkis is a professor of supply chain management at Worcester Polytechnic Institute, who says the biggest question consumers are asking right now is who will be president next year. Let me hold off on the purchasing until I know who's going to be running the country.

In my opinion, it doesn't matter who wins. It's just they just want certainty afterwards. Plus there's a possible incentive to pick up production coming later this month. The other uncertainty broadly and economically that we're facing is what is the Federal Reserve going to do with the interest rates. But there's still optimism coming from manufacturers. That's what Ben Goodeman is hearing. He's VP of sales for Mitsubishi HC Capital America. Some of the vendors that we work with are looking forward to kind of the end of the

year and what 2025 will bring from what they're hearing from their customers. That's also how long it'll take for the current uncertainty to resolve. By then, we'll have a new president and likely an interest rate cut. I'm Kaylee Wells for Marketplace. Wall Street today, a rough start to the month for traders. We'll have the details when we do the numbers. When it comes to the economic outlook, you've got manufacturing, jobs, but also geopolitics, which can affect supply chains and energy prices. We've seen this play out in real time with the ongoing fallout of the war between Russia and Ukraine.

Since Russia's invasion in February of 2022, the U.S. and our allies have issued thousands of sanctions on the country, waging an economic war on a greater scale than any other in history. Stephanie Baker is an investigative reporter at Bloomberg News and wrote about this for her forthcoming book, Punishing Putin, Inside the Global Economic War to Bring Down Russia. Stephanie, it's good to talk to you. Thanks for having me. So let's sort of lay the groundwork first. You write that following Russia's invasion of Ukraine, there were something like 18,000 sanctions and other actions placed on Russia. Where do all those sanctions stand now?

Right now, there are closer to 20,000 sanctions against individuals and companies. So the economic war has ramped up beyond anyone's imagination over the past two and a half years. And while I was writing this book, I got a lot of people telling me, oh, the sanctions aren't working, so why are we bothering? And my response has always been, well, define what quote unquote working means. If working means do they force Putin to withdraw his troops from Ukraine, then clearly they haven't worked yet. But if working means

have the sanctions imposed meaningful costs on the Putin regime and its abilities to sustain the war, then clearly they have been working. Now, there's no question that the sanctions can be tightened to be more effective, but saying that the West shouldn't bother because they haven't ended the war is kind of straight out of Putin's propaganda book. You said something key there that the West is engaging in these sanctions because you point out in your book that countries making up half of the global economy are sanctioning Russia, but countries making up two thirds of the global population are not. So how has that affected the effectiveness of the sanctions? In a major way. Obviously, the biggest economies in the world, part of the Group of Seven,

the US, Europe, the UK, and Japan have embarked on these sanctions. But obviously the world's population is outside of those countries and Russia's routes to evasion have gone through some of those countries. In particular, former Soviet republics on Russia's borders have been used to shift everything from Coca-Cola, which stopped doing business in Russia, to Apple iPhones, to semiconductors that Russian defense factories desperately need to produce precision guided missiles. And one of the arguments I made in the book is that if they want sanctions to be more effective, they need to broaden that coalition and encourage more countries to join through positive inducements, things like debt relief or infrastructure investment

to make those countries see that it's worthwhile. And big players in this would be China and India that have kind of taken a little, we're not getting involved in your fight over sanctions move. Exactly. China has become, in some ways, kind of like a super store for Russia. Instead of Russia getting a lot of its imports from Europe, it is now pivoted. And in particular, it's relying on middlemen in China and Hong Kong to provide semiconductors. And you see Washington threatening to impose sanctions on financial institutions who

are facilitating that trade. And that has actually had some effect. China wants to do business with the world. China's banks don't want to be cut off from the US dollar. The business with Russia is, in the greater scheme of things, relatively small. But I think if the US really wants to go the next step, they would actually sanction and impose sanctions on a Chinese bank as a kind of demonstration to scare some of the other banks away from doing that business.

One of the key targets for a lot of these sanctions against Russia have been Russia's energy industry. And you write that those sanctions really haven't worked as well as intended. Why is that? Right. Well, oil is the linchpin of the Russian economy and always has been going back decades. When Putin launched the full scale invasion in 2022, he actually benefited from oil prices spiking because of concern over Russian supply.

And the G7, the Washington, London, and Brussels scrambled to figure out a way to try to limit his oil revenues and came up with this policy called the oil price cap. And initially that policy worked quite well, but then Russia quickly came up with an alternative. It figured out a way around it by building the shadow fleet of tankers that could transport Russian oil outside of Western services. Overall, I think the price cap has cost Russia something like

$80 billion, so it hasn't totally been a failure, but it could work much more effectively. The big risk and the big concern was that cutting Russia oil out of the global market would cause energy prices to spike and a global recession to follow. What do you think this experience of trying to cut Russia's economy off from the rest of the world and things going the way they have been with some successes, some not, what do you think the Biden administration

and other officials have learned from this and what does it mean for future global conflicts moving forward? Yeah, it's a great question. Part of the reason why I wanted to write this book was because I saw it as such a grand experiment. Never before has an economy as big as Russia or as integrated in the global financial system

been targeted by sanctions. So there were a lot of lessons learned. And I think the biggest one is that this is really hard, especially against a country, an economy that is such a major player in the global financial system. Stephanie Baker is an investigative reporter at Bloomberg News. Her new book is Punishing Putin Inside the Global Economic War to Bring Down Russia. Thank you very much. Thank you for having me. While many folks were relaxing over the Labor Day weekend, more than 10,000 hotel workers were on strike.

Housekeepers, servers, and front desk agents walked off the job at about two dozen Hyatt, Hilton and Marriott properties around the country. The union that represents those workers say members want better pay and a restoration of services that hotels either stopped offering or cut back on during the pandemic. Marketplace's Stephanie Hughes looks at how staying in a hotel now is different than it was pre-pandemic and what that means for the people who work there. One big change for workers and guests, daily hotel room cleaning isn't a given. Some will do it every second or third night.

Some will do it only upon request. David Sherwin is with Cornell School of Hotel Administration and he's provided legal expertise to Hilton, Hyatt and Marriott in the past. He also says some hotels are cutting back on room service, partly because visitors are using their phones instead. You can have Shake Shack delivered to your room, and even with the added costs of the delivery and so on, it's cheaper than in-room dining would have been to the guest. Sherwin says some service changes began with people not wanting to be around other people during the pandemic, as well as labor shortages. Now they've become part of the way some hotels

do business. Carlos Aramayo is president of the Boston chapter of the Hotel Workers Union that's been striking. He says cleaning a room less often means it's harder for housekeepers, and also they don't get as much work. If there are fewer rooms to clean and fewer people being put on the schedule, folks are scrambling to be able to get to their 40 hours in a given week. But some guests have gotten used to making their own beds and meals and cleaning up after booking accommodations through apps like Verbo and Airbnb," says Sean Hennessey, a professor at NYU's Tisch Center of Hospitality.

I think Airbnb has trained guests to expect fewer services, and the industry itself has reflected that. Another drawback for hotels that don't clean as often? They start to show some wear. Say a guest drops a chicken wing on the floor. You better get used to that stain because it's there. Cornell's David Sherwin says even if these hotels start to deteriorate faster, he doesn't yet know if they would opt to pay staff to clean more often or just replace the rugs. I'm Stephanie Hughes from Marketplace. Coming up...

We've had this long relationship that I didn't even know about. Doesn't sound like a healthy relationship to me, but first let's do the numbers. Yeah, I saw that coming. The Dow Jones Industrial Average lost 626 points, 1.5% to close at 40,936. The Nasdaq dropped 577 points, 3. tenths percent, to finish at 17,136. And the S&P 500 fell 119 points, 2 10th percent, to end at 55 28. Kayleigh Wells mentioned manufacturing fell in July, well so did construction spending, according to census data.

In that industry, Caterpillar crawled back almost 4.5%. Vulcan Materials lost 2.5%. Stephanie Hughes was telling us about those striking hotel workers. Marriott was down 1.7%. Hyatt and Hilton Worldwide both dropped 1.8%. Bonds rose. The yield on the 10-year T-note fell to 3.83%. And you're listening to Marketplace. and non-climate change. And I love the growth agnostic stories about drivers of our economy other than consumption. Join me in supporting Marketplace with a gift today. Go to marketplace.org slash donate.

This is Marketplace, I'm Kimberly Adams. Weight loss drugs like Wigovia and Zepbond are extremely popular and expensive, but the benefits of the active ingredient in the drugs, samaglutide, seem to keep stacking up. A new study in the Journal of American College of Cardiology finds it may reduce adverse effects of COVID-19, including deaths.

Already, nearly a quarter of overweight and obese Americans, that's 70% of us, have tried the GLP-1 drugs, according to health policy nonprofit KFF, but there are major disparities in who can get them. Medicare, the federal insurance for adults 65 and up, only covers these drugs for diabetes, heart disease, and stroke, not for obesity. And with Medicaid, which serves low-income people,

a majority of states administering the program won't cover these weight loss drugs. Marketplace's Samantha Fields reports. Ever since she was a kid, Karen Butcher has struggled with her weight. Growing up, I was always a chubby kid. Butcher is 31 now and lives in upstate New York, and she's tried all sorts of things to lose weight. The keto diet, slim fast shakes, eating just one meal a day, none of it has made much difference. I have seven kids and it seemed like every time I had a baby I'd put on, you know, another 40, 50 pounds.

And now here I am at almost 400 pounds. Her weight affects almost every aspect of her life. I struggle to work, I struggle to be active. Like there's times that I don't even want to get up. Like I just want to sit there because I physically feel like I cannot breathe. Or, you know, I go to stand up and my legs hurt too much and I just have to sit back down. She's also pre-diabetic.

Because of that, her doctor recently recommended she try a GLP-1 drug to lose weight. But when she went to pick up the prescription, she learned Medicaid in New York won't pay for it. Coverage of weight loss drugs in Medicaid is pretty limited. Liz Williams at the health policy nonprofit KFF says states can choose whether to cover weight loss drugs for people on Medicaid, and most don't. As of last summer, Medicaid, and most don't. As of last summer, 16 state Medicaid programs reported covering at least one weight loss medication for the treatment of obesity. Which is why so few people on Medicaid have been able to get these drugs, even though

they are more likely than people with private health insurance to be overweight or obese. Dr. Chris Gunnell, one of the lead researchers on the JAMA study, says Medicaid does cover drugs like ozempic for other conditions, like diabetes and heart disease, just not for weight loss. You basically have to become sick enough in order to then qualify for the medication. A big part of the issue is cost. Some private insurers aren't even covering these drugs because they're expensive. But Cody Kinsley, North Carolina's Secretary of Health and Human Services, says it's not

just about money. We only have conversations about not covering certain drugs when they're related to stigmatized illnesses. Like HIV, opioid addiction, or obesity. The most expensive drug for me in my program is primarily prescribed for eczema. And the cost for that will be almost twice what I will pay for weight loss. And nobody is complaining about the cost of eczema. The Medicaid program in North Carolina just started covering weight loss drugs last month.

Kinsley says to him, it was a no-brainer for a state where nearly half of residents are obese and heart disease and diabetes are common. Fighting obesity is a smart way to go after those problems now. And so financially, it's a good investment. But most importantly, morally, it is just the right thing to do. But even in states that do cover these drugs for weight loss, it can still be hard for people to actually get them. They often have to be obese, not just overweight, and have tried other drugs first. The reality is very few patients can make it through the gauntlet.

Dr. Shantanu Nandy is a physician at Neighborhood Health, a community clinic in Northern Virginia. Most of his patients are uninsured or on Medicaid, and the majority are overweight or obese. As he goes from exam room to exam room... I always have this sense of dread when I see them because I'm basically seeing a continuum of all the conditions that crop up. Because of obesity. I have the 40-something year old who's heading down the path of knee surgery. I have the 50 year old who I'm talking to them about starting them on insulin. I have the 60 year old who's going into liver failure.

And Dr. Nundi says he's never had any real tools to offer until now. When these weight loss drugs first started taking off, he was skeptical until he really looked at the data. There was almost this exuberance that, wow, we have something. And now I think we're back to the status quo and the despair of something that we can't control. For Karen Butcher in New York, it's almost more frustrating to know that these drugs are out there, but she can't get them. When her doctor first offered to prescribe a weight loss drug. I was pretty optimistic.

You know, I thought, well, maybe this will help me get a little bit healthier. And I was actually pretty upset when I learned that I didn't qualify. The only option for her on Medicaid in New York is weight loss surgery. But as is often the case, she's been told she'd have to lose a bunch of weight first to qualify. I'm Samantha Fields for Marketplace. Speaking of products rising in popularity, subscriptions for products and services are spreading to new sectors. Stuff we used to buy one unit at a time, from pet food to video games, even meals at Taco

Bell, are now available via automatically renewing subscriptions. Pretty convenient, sure, until we don't need those subscriptions anymore, or forget about them altogether, which is what a lot of companies seem to be banking on. Some even make canceling a chore. But proposed Biden administration rules would crack down on those tactics and make it harder for companies

to profit from consumer forgetfulness. Marketplace's Savannah Marr has more. SONIA DARA In the early days of the pandemic, Florencia Morata-Wurgler was missing her gym time. FLORENCIA MORATA I have three kids at home. I need to just channel my energy in some way. And so I signed up for some different exercise classes. SONIA DARA A virtual sampler of cardio workout trial subscriptions that started out free, then automatically renewed and kept billing Marata Wurgler's credit

card long after she'd forgotten. I canceled the peskiest one just two weeks ago. We've had this long relationship that I didn't even know about. Marata Wurgler is an expert on fine print. She studies internet contracts at the NYU School of Law, and she still falls victim to this kind of stuff. In so many ways and so many times. So she says the rest of us don't stand a chance, especially when companies make it frictionless to sign up for subscriptions but cumbersome to cancel.

You have to go through many different pages, try to get a human on the loop. There are many different stages where you're being asked whether you're sure. These are all tactics that prevent consumers from making choices that cost firms money. Economists have a name for those of us who keep our finances on autopilot. Ben Klopak is a professor at Texas A&M. He co-authored research finding that companies that use a subscription model can count on as much as a 200% revenue boost from this kind of consumer spaciness. And it helps if customers have to jump through hoops once they do remember to cancel. Maybe it took you six months to even remember that you had subscribed to something.

So if companies can put off that cancellation decision, you might forget for another six months and continue paying for that product. Well, that's not a really good way of doing business, quite honestly. Teresa Murray is with the U.S. Public Interest Research Group. She says the Biden Federal Trade Commission's click-to-cancel rule would require companies to make ending a recurring subscription no harder than signing up. So if you can enroll online in three steps, you should be able to opt out online in three steps. And in some cases, companies would have to remind subscribers before automatically renewing. Murray expects the proposed rule to be finalized in the coming weeks, but already...

Companies are trying to get out in front of it because they probably know that the roles are going to change or it just is good PR for them. And as companies make those changes, which are popular with consumers, Murray says competitors are pressured to fall in line. Still, she says the best way to limit unwanted charges is to steer clear of subscriptions to begin with. Easier said than done, with so many temptations out there. Like, you sign up for a service to watch one movie or read one article, and you mean to cancel afterward. It's embarrassing. I wanted to make a meme, and so I signed up for a meme-making platform, and it's now like three months later and I've to cancel afterward. It's embarrassing. I wanted to make a meme, and so I signed up for a meme making platform, and it's now like three months later,

and I've made one meme. Yaya Moctrazada founded Truebill, now called Rocket Money, an app that promises to help with forgotten subscriptions. Users hand over their credit card information, and the service tracks down recurring charges. That initial aha moment, when they first get the app and they see their dashboard for the first time

and they're just shocked at how much they're paying for it. That dashboard report is free. You can get Rocket Money to brave the cancellation hotline for you for a minimum of $6 a month, automatically renewing, of course. When you put it that way, it does sound funny. A subscription management app that's a subscription, right? But Moctrazada says it comes with lots of other features like a

budgeting tool and you can try it out first with a seven day free trial. Maybe just set yourself a reminder to cancel it. I'm Savannah Marr for Marketplace. please. This final note on the way out today, a bit of a longer term outlook on the labor market. Just before the holiday weekend, the Bureau of Labor Statistics gave us its take on what the job market will look like in the coming years. For the decade between 2023 and 2033, BLS estimates the US will add 6.7 million jobs, nearly 5 million fewer jobs added than the previous decade. A lot of that has to do with population decline and folks aging out of the workforce, which explains

why the top area for growth in the years to come, according to the agency, healthcare and social assistance. Our digital and on-demand team includes Carrie Bar come, according to the agency, health care and social assistance. Our digital and on-demand team includes Carrie Barber, Jordan Manji, Dylan Mietinen, Janet Nguyen, Olga Oxman, Ellen Rolfus, Virginia K. Smith, and Tony Wagner. Francesca Levy is the executive director of digital and on-demand. I'm Kimberly Adams.

We'll be back tomorrow. This is APM. Understanding personal finance can feel like an impossible task, but it doesn't have to be that way. I'm Janelia Espinal, and on Financially Inclined, I'll guide you through simple money lessons that will change your financial future. Learn about credit scores, how to avoid scams, and why you need a savings account. Plus, we explore the brain science behind FOMO and what you can do to make smarter money

decisions. Listen to Financially Inclined wherever you get your podcasts.