The Philip DeFranco Show - PDS 7.18 Chappell Roan Taylor Swift Stalker Problems, NYC Politician Bites Cop, Secret Service Backlash Grows

Episode Date: July 18, 2024

Go to http://www.vessi.com/defranco  for up to 15% off your 1st order.  Go to http://zbiotics.com/DEFRANCO and use code DEFRANCO at checkout to get up to 15% off your first order. ==== ✩ TODAY’S STORIES ✩- – 00:00 - Arizona Dad Abandons 2yo in Hot Car to Play Video Games 01:37 - Reports Say Biden May Drop Out This Weekend 04:33 - More Details Emerge About Trump Assassination Attempt 08:20 - Chappell Roan & Taylor Swift Stalkers, Andrew Tate Forced to Stay in Romania 10:32 - Sponsored by Vessi 11:29 - NYC Council Member Bites Police Officer During Protest Against Homeless Shelter 13:43 - Nevada Politician Indicted on Fraud Charges 15:58 - Venezuela’s President Appears 13 Times on Ballot, Threatens Violence if He Loses  19:37 - Sponsored by ZBiotics 20:40 - The Secret Middlemen Driving Up Drug Prices and Costing Americans Billions ——————————   Produced by: Cory Ray Edited by: James Girardier, Maxwell Enright, Julie Goldberg, Christian Meeks, Matthew Henry Art Department: William Crespo Writing/Research: Philip DeFranco, Brian Espinoza, Lili Stenn, Maddie Crichton, Chris Tolve, Star Pralle, Jared Paolino Associate Producer on Drug Middlemen: Lili Stenn ———————————— #DeFranco #ChappellRoan #AndrewTate ———————————— Learn more about your ad choices. Visit megaphone.fm/adchoices

Sup, you beautiful bastards. Welcome back to the Philip DeFranco Show, your daily dive into the news. And we have a lot to talk about today. There's small, big, weird, incredibly consequential. So you hit that like button to let YouTube know you like these big daily dives into the news. And I'll just jump into it.

Starting with, y'all, I know that it sounds like common sense, but please spread the word. Do not leave your kids or your pets alone in the fucking car. It is summer. It's not just summer. There is a crazy heat wave happening. And unfortunately, every year I see no shortage of stories about kids dying. One of the big examples

that comes to mind is 37-year-old Christopher Schultz of Arizona. Last week, he got home with his two-year-old daughter, but she was sleeping in the back seat. So he decides, hey, I'm going to leave her there, but I'm going to leave the AC on. I'm going to go inside, AC's on. Later telling police he just didn't want to wake her up. But this is according to the prosecutor, even though he knew that the car and the AC automatically shuts off after 30 minutes. Also for added context, reportedly his other two kids told police he had left all of them alone in the car regularly. Them also adding that on this day, he got distracted by a video game and putting food away while the two-year-old was in the car. So this poor little girl, she sat there strapped

in her car seat in direct sunlight for three hours in scorching 109 degree weather. She only ended up being discovered once the mom came home and asked where she was. At which point Schultz reportedly searched the house, apparently forgetting that he left her in the driveway. But of course it was too late. Their child was already dead. With the mom reportedly texting him that night,

I told you to stop leaving them in the car. How many times have I told you to which he replied, babe, I'm sorry. So he's been arrested and charged with second degree murder and child abuse, but he's also not alone. In fact, according to Kids and Car Safety, at least 12 kids have died in hot cars nationwide so far this year, four of which have died since July 9th.

And so on average, about 40 children die from heat stroke in a car each year, according to the National Highway Traffic Safety Administration. And then Joe Biden might be done. And I don't mean because he got COVID with him testing positive between campaign events in Las Vegas.

Right, and with that, the White House saying that he's just experiencing mild symptoms, including a runny nose, cough, and general malaise. Noting that Biden's taking Paxlovid, that he's been vaccinated and boosted. As well as saying the president will be isolating in Delaware and will continue to carry out all of his duties fully

during that time. Biden also posting to X saying that he's feeling good. But also the timing of all this is key. Notably, just hours before he tested positive, we saw Representative Adam Schiff, one of the most prominent members of the House, officially calling for Biden to withdraw, saying in a statement that Biden has been

one of the most consequential presidents in our nation's history, but quote, "'A second Trump presidency will undermine "'the very foundation of our democracy, "'and I have serious concerns about whether the president "'can defeat Donald Trump in November.'" And adding that while the choice to withdraw from the campaign is President Biden's alone,

he believes that it is time for Biden to pass the torch and secure his legacy of leadership. You know, that announcement, it's super significant, not only because Schiff is one of the most high-profile Democrats to call for Biden's withdrawal, but also because he is a widely respected senior Democrat who's known Biden for decades, and according to the Washington Post,

is widely seen as one of the few Democrats who might be able to persuade him to drop out. With that, I will say, while Schiff is the biggest name to publicly call for Biden to drop out, we've also seen recent reports saying that top leaders in the party have been doing the same in private. With reports saying that Pelosi privately told Biden in a recent conversation that the president cannot defeat Donald Trump and that Biden could destroy Democrats' chances of winning the House in November if he continues seeking a second term. And that

was according to four sources who were briefed on the call. But then also beyond that, we've seen reports that Pelosi's been working behind the scenes to get Biden off the ticket and encouraging other lawmakers to back that position. And if these media reports are to be believed, she isn't the only member of leadership pressuring Biden. Right, just yesterday we saw reports of the two top Democrats in Congress, Senate Majority Leader Chuck Schumer

and House Minority Leader Hakeem Jeffries, both issued similar warnings to Biden, relaying that their members were seriously concerned about his chances of winning in November and that his decision to stay in the race threatens the party's ability to control either chamber of Congress. And ABC reporting that those conversations went even further and both leaders directly urged Biden to drop out. Though very notably here, while spokespeople for both Schumer and Jeffrey said

the reports are speculation, they also did now write deny them. But then also it doesn't end there because literally as I was recording this, we saw the Post breaking the news that Obama, quote, has told allies in recent days that President Biden's path to victory has greatly diminished and he thinks the president needs to seriously consider the viability of his candidacy, according to multiple people briefed on his thinking. But again, depending on where you go, you're seeing different things. You have his spokespeople saying the same kind of general sentiment that we've been seeing, that Biden is staying in the race and has no plans to drop out.

But then you have the New York Times reporting yesterday that Biden has become more receptive in the last several days to hearing arguments about why he should drop his reelection bid. And this morning, you had Axios claiming several top Democrats privately tell us the rising pressure of party congressional leaders and close friends will persuade President Biden to decide to drop out of the presidential race as soon as this weekend. With them adding there that top Biden aides are saying it's now when, not if, Biden's announcing he's not running. But again, this is numerous people from Biden's team push back on that reporting,

telling Axios he is staying in the race. But for now, we'll have to wait to see what happens. And also when he does this, what is that gonna look like? But then shifting gears, let's talk about this video. There's no chance, no construction, it's not a deal. Do you have to answer the question? Do you have to stay in the army?

I'm not even asking you to answer the question. You answer the us. You answer the us. I'm not even gonna answer to us. Answer to us. This is exactly what you're doing today. This place is assassination attempt. You owe the people answers. You owe President Trump answers. So that is Secret Service Director Kimberly Cheadle

being followed and berated by some Republican senators and others at the Republican National Convention. And that video was shared by one of them, Senator Marsha Blackburn of Tennessee, along with the caption, "'Secret Service Director Refuses to Answer "'to the American People.'" And it's a four minute video that starts

with them aggressively confronting Cheadle in a hospitality suite about the lapses in security that let alone gunmen nearly assassinate Donald Trump and kill somebody else in the process. But then seeing them follow Cheadle out of the hospitality suite, down a corridor inside the arena, and up a flight of stairs, continuing to yell questions at her

and telling her that she owed them answers. And you know, all of this is just one part of the backlash, and here specifically, the Republican backlash to the Secret Service over their perceived failure, with there being growing calls from members of the party for Cheadle to step down, with that including the likes of Mitch McConnell and Mike Johnson.

And actually with that, Cheadle is set to appear before the House Oversight and Accountability Committee on Monday. But also going back to what happened in the video, it came after Blackburn and other lawmakers were briefed by the FBI about the ongoing investigation into the shooter. And really, however you feel about that video,

that briefing, it seems to have only given further confirmation of just how much the Secret Service may have fucked up. Are you and Cheadle reportedly admitting that her agency made serious mistakes during one of the calls? With officials reportedly noting in the briefings that law enforcement officers had identified the gunman

as suspicious about an hour before the shooting, but then they lost track of him. But then, also about 20 minutes before the shooting, a sniper spotted him again. And then we're also seeing reports that local police actually alerted the Secret Service ahead of time they didn't have the resources to patrol outside the building where the gunman sat up.

Right, meaning that they may have been aware that it just wasn't being watched. And so with these pretty glaring oversights, I mean, it's egregious, it's kind of understandable why we're seeing tons of conspiracy theories, right? So many people literally just cannot believe that they made this many mistakes. And notably, it's coming from both sides, right?

You have some Trump supporters saying the whole thing was orchestrated by Joe Biden. And this is some Trump critics are wondering if Trump staged the whole thing to make himself look good. But again, there is no evidence of either of those things right now. So let's talk about what else we do know. So for one, an interesting thing here is that the FBI is saying that the gunman's phone had details about both Trump and Biden. And actually, they reportedly say the shooter's search history indicated he was broadly interested in powerful and famous people without any obvious ideological or partisan pattern.

For example, besides Trump and Biden, he was apparently also looking up people like FBI director Christopher Wray, attorney general Merrick Garland, the member of the British Royal family. Additionally, they're saying his search history included the dates for the Democratic National Convention as well as future Trump events. And finally, officials told lawmakers that there were some signs that the gunman

might have been struggling with depression, with him specifically saying that he had looked up things like major depressive disorder on one of his phones. But of course, while all of these are interesting details, they still offer no clear motive for the attack. Like we talked about on the show before, how some of the gunman's classmates have said that he was very conservative,

that he was a loner and that he was bullied. But the thing there is other classmates are saying very different things. I mean, you have one telling the New York Times that the shooter generally hated politicians from both parties. And that same classmate disputing accounts that the shooter was actually bullied

or was a loner saying that he was intelligent and had his own small group of friends. So with that, he did say that the shooter once called the classmate stupid for supporting Trump, even though he was Hispanic. But in general, like we haven't gotten a ton publicly that what we have gotten from people that knew him seems very mixed. A lot remains a mystery. I mean, we know things like law enforcement reportedly hasn't uncovered any evidence of co-conspirators or connections to foreign actors. You also have people saying, you know, if we have no idea about the shooter's motivations, we can't dismiss that possibility. Though seemingly separately, there have been reports

that before the shooting authorities actually had intelligence about a plot by Iran to try to assassinate Trump, something that led to the Secret Service increasing security around the former president. But for now, we're waiting to see more. And in the meantime, of course, I'd love to know your thoughts here.

But then let's talk about some requested quickie news. Starting with Chapel Roan, which good news for her. She is new found fame. She just seems to be on this great trajectory. The bad news is it seems like that has come with a crazy stalker problem. I mean, she's had a massive year, starting at around a million monthly Spotify listeners,

now at over 30 million today. And she's drawn insane crowds at major music festivals. And even though she's actually been in the industry for a while, she seemingly went from under the radar to pop superstar in the span of a few months and again while seemingly great she actually just revealed that all this chaos might force her to step back in some way saying on the comment section podcast yesterday people start to be freaks yeah they follow me yeah they follow me and like follow like like know where my parents live and like

my sister where's my sister works like all this weird I'm just like this is the time when I was like a few years ago mm-hmm that I said if stalker vibes like family was in danger is when I would quit in like we're there I've like pumped the brakes on honestly anything to like make me more known yeah it's like kind of a forest fire right now. They're saying she wishes that she could have done a Daft Punk kind of thing to cover her face and identity. And the thing is, she's actually touched on this before, telling a crowd in North Carolina earlier this year.

I just feel a little off today because I think that my career's just kind of gone really fast and it's really hard to keep up. This is all I've ever wanted. It's just so, it's just hard to say. So while she didn't say like she's planning on leaving music or anything, she did say that she's taken it down a notch.

And if you even remotely have a hard time understanding why, I mean, you can just look at another big piece of news today with his learning that a suspected Taylor Swift stalker got detained in Germany ahead of her concert, with that person being identified as a 34-year-old American man, with Reuters reporting that he allegedly made threats against Taylor and Travis Kelsey online,

and a court ultimately ordering that he remain detained through Saturday, which is after Taylor's string of concerts in the city will end. Though, she is going to have shows in two other German cities this month. And of course, this is just the latest of the stalker problems that Taylor Swift constantly has. We also got the news that Andrew Tate has already lost some of his newly granted freedom. Right, because what, just around two weeks ago, a court said that he was allowed to leave Romania while awaiting trial so long as his travels remained in the EU. And there was obviously a very big win for him, but he's already lost it. With us seeing a court reversing that decision this week, and once again barring him and his brother from leaving Romania.

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Just go to Vessi.com slash DeFranco to get 15% off your first purchase at checkout. Don't let the weather dictate your life. Get yourself a pair of Vessis at Vessi.com slash DeFranco to get 15% off your first purchase at checkout. Don't let the weather dictate your life. Get yourself a pair of Vessi's at Vessi.com slash DeFranco. You'll be ready to stay cool and dry all year long. And then, so this is a fun thing. This is the first bit of news I woke up to this morning. A New York City council member has been charged

with assault after allegedly biting a police officer while protesting against a homeless shelter being built in her district. And the thing you should know, right, to start this off, is that the city has faced widespread backlash from residents over its plans to turn a building in Brooklyn into a new men's homeless shelter being built in her district. And the thing you should know, right, to start this off is that the city has faced widespread backlash from residents over its plans to turn a building in Brooklyn into a new men's homeless shelter that could house up to 150.

With residents voicing concerns about homeless people living in their neighborhood, especially those with mental health issues, and among those who have been vocal in their opposition is councilwoman Susan Zwang. And she represents the area. And last week, she shared a report on social media saying that arrests near city shelters doubled in 2024,

saying this is exactly why we should not build shelters next door, schools, daycare centers, senior centers. Also telling reporters, the neighborhood is full of immigrants. We want to help, we want to support, but the city should give us a chance to say what's the best plan for the neighborhood and also the people who are homeless.

And just yesterday, she shared a video from a protest that took place in front of the planned shelter where demonstrators can be seen talking to police. Wuzhuang claiming in the caption that the city didn't have permits for the site and that they had started construction at 5 a.m. But shortly after that video was taken, things escalated. With video showing protesters clashing with the officers,

yelling and pushing against barricades. And among those was Zwang, who could be seen in the footage with one arm handcuffed, fighting with a police officer over the barricade. You had police saying that she'd been shoving barricades at officers, preventing them from getting close to a woman who was on the ground. But then also saying when they initially tried to arrest her,

she bit a chief and then twisted and pulled away. With the matting of the bite broke the officer's skin, causing substantial pain and noting that he went to a hospital for treatment. And according to reports, Zwang got arraigned yesterday evening in a Brooklyn criminal court on one count of second degree assault. With her then appearing outside the courthouse

and showing reporters red marks on her wrists that seemed to be from handcuffs and deep bruises on the underside of her arm, also claiming she had injuries on her inner thigh. And in remarks to reporters, her lawyer suggested that the injuries were sustained during her arrest and adding, "'We're confident that when the story comes out

"'about what happened, the case will not go forward.'" But still, you had many condemning Zhuang's actions, including other members of the city council, as well as the head of New York City's police officers union saying he was shocked by the reported violence, and also noting that the council member has, quote, "'Been a steadfast supporter of police officers.'"

But yeah, overall, just crazy shit in general. And I guess also it goes to show just how heated the handling of the homeless crisis has become in the US, and just how divisive it can be. And that's even within the government itself. And then we need to talk about Michelle Fiore. And for those from Nevada, you may recognize her as a former member

of the Las Vegas City Council, a former state assembly member. Maybe you remember her from her brief run for governor or her campaign for state treasurer, or perhaps from her very eventful political history, including accusations of racially charged comments, a failed recall effort, and a lawsuit over an alleged physical altercation,

to name a few things. With some reports saying she cultivated a reputation as a staunch conservative and a colorful figure in Nevada politics. Though she's likely best known nationally because of her 2015 family Christmas card. Or when she backed Cliven Bundy and his family during an armed standoff between militiamen and federal law enforcement back in 2014. Or when she assisted in negotiations to end another armed standoff between federal officials and a group of anti-government activists led by Cliven Bundy's son, Ammon. But the news today is about the now, right? And Michelle is They assisted in negotiations to end another armed standoff between federal officials and a group of anti-government activists led by Cliven Bundy's son, Ammon. But the news today is about the now, right?

And Michelle is currently justice of the peace in a rural community about an hour outside of Vegas. Though she is now once again making national headlines because a grand jury has just indicted her on five charges, four counts of wire fraud, and one count of conspiracy to commit wire fraud. And that, because allegedly during her term on the Las Vegas City Council back in 2019,

Michelle began to solicit donations to build a statue in a city park honoring an officer who was killed in the line of duty. With her reportedly collecting tens of thousands of dollars in donations to her personally, her political action committee, and a charity she founded and promised to use 100% of the money for the statue. But, wouldn't you know it, that didn't happen.

Because Michelle allegedly took the money and just used it for her own personal expenses, including her political fundraising bills, rent, and even her daughter's wedding. And specifically, she's accused of keeping more than $70,000. The prosecutor is saying that even as she was collecting donations,

she knew that a real estate development company had already agreed to pay for the statue, which also was ultimately unveiled in 2020. This could be a huge thing because each of her charges carry a maximum penalty of 20 years in prison. Though with this, according to her statement, Michelle found out about her indictment through the media and added, now that these accusations have been made, I look forward to my day in court and have faith in our judicial system. I hold my oath of office sacred and have consistently strived to serve my

community with integrity and to the best of my ability. Also going on to say that this indictment has been years in the making and has deeply impacted her friends, family, and constituents. And Michelle adding all matters shall be brought to light in a court of law, not in the making and has deeply impacted her friends, family, and constituents. And Michelle, adding all matters, shall be brought to light in a court of law, not in the court of public opinion, where I first learned of my own indictment. Now that I have been accused, I eagerly await my opportunity

to address these charges in court." And that is looking like sooner than later, because Michelle's arraignment is scheduled for July 29th. And then President Nicolas Maduro of Venezuela is saying and doing some wild shit right now. The election there is just over a week away and he's saying there could be a bloodbath if he doesn't win.

And that, despite Maduro's best efforts, it is the first election in all of his years in power that he has a real chance of losing. Because while there's a lot that we could talk about with the guy, the key thing to keep in mind is that he is a strong man that's been in power for more than a decade, with his government often accused of rigging votes

and silencing the opposition. For example, back in 2018, the election was described as illegitimate by an alliance of 14 Latin American nations, Canada, and the United States. But with that, you know, the reason that there's hope that this year it might be different, it's because of an agreement reached last year

with the United States, a deal in which Maduro promised that he would hold free and fair elections in exchange for relief from sanctions. And so with that, in walks this guy by the name of Edmundo Gonzalez Urrutia. And he's actually giving Maduro a run for his money, with many experts believing the opposition

has a real chance of pushing him out of office. And this as, for example, for the first time in years, electoral observers from an NGO and the UN have been invited to monitor the election. Plus, recent polls put Gonzalez Urrutia more than 20 percentage points ahead of Maduro, which you know is a lead that would normally make his victory almost guaranteed.

But Maduro is seemingly doing everything that he can to make sure that doesn't happen. I mean, for example, I kid you not, he shows up on the presidential ballot, not once, not twice, but 13 times. And notably, he is taking up all the top spots as well. Whereas his challengers on the other hand, they appear further down and they appear far fewer times.

So there's one serious opponent, Ray Gonzalez Urrutia, appearing just three times. Also, to be clear, the fact that a candidate appears more than once on the ballot, that in itself is not the sign of a flawed election. That's actually long been the case in Venezuela. But what's different now is that it seems to be a very deliberate effort by Maduro

to tip the scales in his favor. I mean, about six years ago, his government started targeting some of the country's oldest and most established political parties and replacing their leaders with people loyal to him. And on top of that, it approved the creation of a whole bunch of new parties who nominated candidates that weren't really seen as challengers.

In fact, 14 of the 38 parties on this year's ballot were created in the past six years. So basically a lot of this is being seen as meant to make the election feel legitimate and democratic, even though it's actually doing the opposite. With an expert from the International Foundation for Electoral Systems even telling the New York Times, "'It is an advantage to be on the top part of a ballot because normally that's what people are looking at.

And also saying we haven't seen anything similar to this. But Maduro's efforts, they also go way beyond spamming voters with his face. I mean, he's actually gotten two opposition candidates barred from the race. And then when one of them tried to appoint someone in their place, that person was also stopped from running. And then, as if all that wasn't enough, just this week, a Venezuelan NGO is claiming that there have been over 70 arbitrary detentions since the beginning of the campaign season on July 4th. For example, the latest arrest getting a lot of attention

being the security chief of one of the candidates being barred from running, which is also why you have the U.S. State Department this week calling for the release of all those who have been unjustly detained. And then on top of all that, the U.S. actually reimposed oil sanctions on Venezuela back in April over concerns about the election,

with officials this month also holding talks urging Maduro to make sure that the elections are legit. Though notably, this is not because, you know, America just loves democracy, but the US and the Biden administration especially have a real stake in all this. With arguably one of the biggest reasons being that in the past decade, more than 7.7 million Venezuelans

have left the country. It's actually one of the largest displacement crises in the world. And with that, you know, these migrants are overwhelmingly hosted by countries in Latin America and the Caribbean, but also a fair few have traveled to the U.S. as well. I mean, in just the past three years, more than half a million heading to the Southern border.

And this made them the second largest group of migrants apprehended by Border Patrol in 2023. I mean, we're talking about five times as many as there were in 2020. And you have a number of experts saying, you know, if Maduro loses, many migrants will decide to return to Venezuela. But also, if Maduro wins, even more may be tempted to head to the U.S. In fact, one survey suggests as many as one-third of Venezuelans would consider

migrating if Maduro stays in power. But for now, we'll wait to see what happens, but also how it happens. And then, you know, for those of you who enjoy having a few drinks, but you don't enjoy how you feel the next day, listen up, because I got a game changer for you. And it's from me and the fantastic sponsor of the show, ZBiotics. Right, because ZBiotics pre-alcohol probiotic is the world's first genetically engineered probiotic invented by PhD scientists to tackle rough mornings after drinking. See, alcohol, it gets converted into a toxic byproduct in the gut, and the byproduct is a big reason why you feel so rough the next morning. And pre-alcohol produces an enzyme to break this byproduct down. I mean, it's designed to work like your liver, but in your gut where you need it most. So just drink this probiotic before drinking alcohol, drink responsibly

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So if you're unsatisfied for any reason, they'll refund your money, no questions asked. That's zbiotics.com slash defranco and use code defranco at checkout for 15% off. And then, so fun story, there is a whole sector of the healthcare industry that almost no one knows about that is effectively taking your hard-earned money right out of your pocket. I mean, this is so huge. You have conglomerates that already have billion dollar

profit margins taking billions more from Americans. And this all while forcing patients to pay insanely high prices for drugs and sometimes even preventing them from accessing essential medicine. I mean, it's already been well- well established that Americans pay far too much for drugs and the usual culprits behind this are profit hungry, price gouging drug companies and insurers. There's also the secret third thing driving this called pharmacy benefit managers or PBMs. When I say secret, I mean it, right?

PBMs operate in a shadowy corner of the healthcare system that's so complex and has so little transparency that most people have actually never heard of them. I mean, have you? But despite the general lack of knowledge about PBMs, they play a huge role in the drug pricing system and their actions actually impact the vast majority of Americans.

I mean, the three biggest PBMs alone, they oversee drug prescriptions for 200 million Americans. That's nearly two out of every three people in the US. And a very key thing is that those three are all owned by massive healthcare conglomerates. CVS Health has Caremark, Cigna owns Express Scripts, and United Health Group operates its own PBM, OptumRx. What's more, the business practices of benefits managers effectively touch almost every American family, even those who don't take prescription drugs. Because inflated drug costs drive up insurance premiums and taxes.

We're talking about just an absolutely massive scope, but what exactly do they do? Well, you know, most Americans, they get their health insurance through an employer or a government program that pays to cover two different kinds of insurance for each person enrolled. See, the first kind covers medical visits and is handled by an insurance company, whereas the second pays for prescriptions and is overseen by a PBM hired by employers.

Specifically, the job of PBMs is to lower the cost of drug prices by negotiating with drug companies, paying pharmacies, and helping decide what drugs patients can get and how much they will pay for those drugs. Which, you know, sounds all well and good and whatever, but an absolute bombshell investigation by the New York Times revealed

that instead of actually doing their job and reducing costs, benefits managers, quote, frequently do the opposite. They are driving up drug costs for millions of people, employers, and the government. The evidence here is insanely strong, with the Times drawing from interviews with over 300 current and former PBM employees,

patients and industry experts, as well as court documents and patient records. And this report is super significant because a big part of the reason no one really knows about all the evil shit PBMs are doing is that they only really turned to the dark side in the last couple of years. Because they've actually been around since the late 1950s

and they were initially meant to handle requests mailed by pharmacies and patients trying to be reimbursed for the cost of prescription drugs. And while their ownership changed over the years, bouncing between drug makers and pharmacies, they've historically been applauded for saving money for patients and employers. And that's including as recently as the early 2010s,

when PBM started adopting a new wave of generic drugs. But then everything changed in 2018, with the health insurers Aetna and Cigna were trying to reach the growth desired by Wall Street. So Aetna merged with CVS and Cigna bought Express Script. Since then, PBMs have become way more dominant in the health system, processing 80% of all US prescriptions. Which I mean, that's just a huge jump from 50% in 2012.

So as a result, these groups have grown insanely lucrative. I mean, if they were standalone businesses, all three of the largest PBMs would rank among the top 40 companies with the highest revenue. So we got to ask, you know, what the hell happened? Well, there, there are a number of driving factors, with the first being how the negotiation process itself operates. When you hear about Ozempic costing $16,000 a year,

that's not the final price, that is just the sticker price. That's the starting point for negotiation. So to get drug makers to lower the sticker price, PBMs offer them discounts like rebates and other payments that are then passed off to employers. But a key thing is that benefits managers get to keep a certain percentage, sometimes as high as 10%. And because drug spending is so massive, that adds up to billions. Especially because negotiations push drug makers to increase their sticker prices. When PBMs demand bigger discounts,

manufacturers come into the negotiations with a higher starting point so they can still maintain their profit margins after getting haggled down. But, and this is a key point here, when PBMs negotiate bigger discounts, it doesn't necessarily mean that the discount's gonna be passed on to the patients. Or because some out-of-pocket costs are set as a percentage of the original sticker price, not the final one.

So if the sticker price increases, patients still pay more regardless of the discounts. Or in other words, PBMs are driving drug makers to artificially increase sticker prices and force patients to pay more for no reason. Or rather, there is a reason. So the benefits managers can get even bigger profits. Or because when sticker prices and force patients to pay more for no reason. Or rather, there is a reason. So the benefits managers can get even bigger profits. Because when sticker prices are higher, they can negotiate bigger discounts, which means

they get to take home more money. And that also creates a backward financial incentive where PBMs can further capitalize on this process by encouraging or even requiring patients to buy the more expensive version of a drug, even when a cheaper option's available. Like for example, the Times reporting that an Illinois woman with cancer paid hundreds of dollars more than she should have for a pain medication because Caremark required her to use a more expensive version. But it's also not just patients.

PBMs are scamming employers and governments out of billions of dollars through pharmacy reimbursements. Or when a patient fills a prescription, PBMs charge their employer and use the money to compensate the pharmacy for buying and dispensing the medication. But often, this pharmacy, it's owned by the huge corporations that also own these PBMs, right? CVS is one of the largest drug chains

with thousands of stores, and all of the biggest PBMs run warehouse-based pharmacies that mail prescriptions. So what PBMs will do is encourage or even force patients to get their prescriptions filled at these drug stores and then charge employers and government programs way more for generic drugs than they actually cost at wholesalers.

See, basically PBMs use the money of employers to pay their own pharmacies multiple times the cost of a wholesale drug and then keep the difference for themselves. The Times actually identified multiple examples of this, with that including one insane case involving Kent McKinley, a county commissioner in Sulphur, Oklahoma, where he has gastrointestinal cancer. He gets his insurance through the state's program for government employees. And for years, he was getting a generic version of his cancer medication through a division of CVS. And he didn't know he could even get it filled elsewhere. Then when he went to his local pharmacy,

the pharmacist found that CVS was charging the state $138,000 a year for a drug that wholesalers sell for $14,000 which means that CVS was literally profiting $124,000 each year just for one single person's prescription. Because McKinley's insurance was through the state, taxpayers were the ones literally footing the bill. And again, that's not the only example here. Another recent report from the Federal Trade Commission

looked at two cancer drugs, and they're finding the three biggest PBMs raked in $1.6 billion over three years by paying their own pharmacies way more than what the drugs would cost from wholesalers. What's more, the New Mexico agency that provides health insurance for public school workers, they audited their agreement with Express Scripts

and they found a $5 million discrepancy between what the PBM promised and how much it actually paid in discounts. And again, these are just some of the examples, but unlike that New Mexico agency, most employers don't actually have the ability to conduct audits or monitor the PBMs they hire. And that's because the system is just so complex

and there's so little transparency. With many not even knowing that they're being overcharged by PBMs and they're taking their money to enrich themselves and not actually make drugs cheaper. And all the while PBMs are overpaying their own pharmacies, they're also underpaying smaller independent drug stores, which pushes them out of the market. Which then of course allows PBMs to consolidate even more of a monopoly for their pharmacies. And then the final major way the PBMs are profiting from the system is through the creation of their own subsidiaries to negotiate discounts with drug makers on their behalf. With those subsidiaries called group purchasing organizations or GPOs, they operate very similarly to PBMs, where they get rebates from drug makers and then give those to their parent PBM, which

then passes the discounts on to employers. But the big difference here is that GPOs also impose fees on drug manufacturers. Because those fees aren't rebates and are technically collected by other companies, PBMs don't have to share the fees with employers or. Because those fees aren't rebates and are technically collected by other companies, PBMs don't have to share the fees with employers or tell them the fees even exist. And those fees, I mean, we're talking about a metric fuck ton of money. With for example, one consulting firm finding

that just in 2022 alone, the PBMs and their GPOs took in $7.6 billion in fees. And GPOs also create a whole other incentive for PBMs to profit. I mean, just look at the drug Humira, which is used for conditions like arthritis. The brand name drug was the only version on the market for two decades.

But in 2023, cheaper generic alternatives were introduced that could have saved employers, insurance programs, and patients up to $6 billion a year. The PBMs, they'd lose so much money from that switch. And that in large part because Humira's manufacturer was paying hundreds of millions of dollars in fees to their GPOs. So what we saw is that they dragged their fee,

preventing people from accessing the cheaper versions. And it wasn't until just recently that Caremark stopped pushing Humira and started recommending another version of the drug. Then even that move was driven by profit because its parent, CVS, struck a deal with a manufacturer to promote the alternative in exchange for a cut of sales. Which I mean, another key thing is that Caremark

didn't disclose to at least one client it pushed the drug on. So understand, we are talking about so many different levels of fuckery here. But also because PBMs have been shrouded in secrecy for the last few years, little has been done to address it. Though there is the possibility of a change sometime soon. That's because just weeks after the Times published

their investigation, the FTC issued a report slamming PBMs for high drug prices. And that's actually very significant because it marks a major reversal for the agency's more hands-off approach to handling these companies in the past. While the FTC hasn't actually brought any lawsuits or other kinds of enforcement against a PBM, this report is widely viewed as the first step toward potential action, whether it be an investigation, lawsuits alleging anti-competitive conduct, or legislation from Congress to regulate the

industry. Though time will tell if there's movement here, and if so, how fast it happens. With that, my friends, is where your Thursday, evening, and Friday morning dive into the news is going to end. But I'll see you soon enough. Just make sure you're subscribed to the channel, you got notifications turned on. And of course, as always, I love your faces and I'll see you next time.