Raphael Stevens

Gilead Sciences says counterfeit versions of its HIV medications were being sold out of two New York pharmacies.
Court documents alleged a twice-convicted medical fraudster wearing a court-ordered GPS ankle monitor was behind the scheme.
For years, Gilead has launched anti-counterfeiting efforts against fraudsters who tamper with the company’s packaging and medications to treat HIV.

Gilead HIV prescription bottles seized at Best Scripts pharmacy.
Courtesy: Gilead Sciences

Gilead Sciences says it uncovered a dangerous drug-counterfeiting operation in which its HIV medications were tampered with and improperly resold before reaching patients.
The scheme, allegedly run out of two New York City pharmacies, identified Peter Khaim, a twice-convicted medical fraudster, as the mastermind, according to court documents unsealed this month. The company described Khaim as one of the most brazen and largest manufacturers and sellers of counterfeit Gilead medications in the country.

Gilead sued Khaim along with the pharmacies, 71st RX and Best Scripts, both located in Queens, and others it claims were connected to the counterfeiting scheme. Gilead’s complaint said Khaim controlled the two pharmacies.
“The defendants and their co-conspirators manufactured and trafficked these counterfeit Gilead-branded HIV medications to pharmacies and patients in at least New York and New Jersey, putting untold numbers of patients’ health and safety at risk,” the lawsuit, filed by attorney Geoffrey Potter of Patterson Belknap Webb & Tyler, said.
Gilead says in its complaint that counterfeiters used its authentic prescription bottles, but tampered with the actual medication or associated documentation.
“In some cases, the bottles had their contents emptied, were refilled with the wrong medication, and then were re-resealed using a different material than Gilead’s authentic tamper-evident seals,” the complaint said. “The co-conspirators then sold the counterfeit bottles with counterfeit patient information documents, counterfeit caps, and/or counterfeit pedigrees or invoices.”
The majority of the Gilead HIV medications seized in the case were Biktarvy and Descovy.

Victims include both “patients living with HIV who are preyed upon by Defendants and convinced to give up taking their prescribed medication,” and “patients who go to their neighborhood pharmacy and, unbeknownst to them, are dispensed a sealed, authentic-looking bottle,” but instead receive a counterfeit, Gilead said in the complaint.
Gilead attorneys and private investigators, accompanied by deputies from the New York City Sheriff’s Office, conducted seizures at the two pharmacies and Khaim’s home in July, taking more than $750,000 of suspected counterfeit medication, the court filing said.
An attorney for Khaim declined to comment.

Lighter fluid found with Gilead medications during the seizure at Best Scripts pharmacy.
Source: Gilead lawsuit exhibit

The case is the second major civil complaint by Gilead against Khaim in connection with counterfeit HIV medications in the legal supply chain. Gilead sued Khaim and others in 2021 and obtained an injunction prohibiting him from selling Gilead-branded products. In that case, according to Gilead, Khaim made more than $38 million selling counterfeit Gilead medications to distributors and directly to pharmacies.
Despite the injunction, Khaim continued to oversee a counterfeiting operation from the two Queens pharmacies, the latest complaint says.
In unrelated criminal schemes, Khaim received 96 months in prison on a medical fraud case and 15 years on a separate insurance fraud scheme. He was wearing a court-ordered GPS ankle monitor while awaiting sentencing in the medical fraud case and also while he was operating the pharmacies and selling the counterfeit medication, according to documents in the case file.
“This lawsuit is another clear demonstration of our ongoing commitment to put patient safety first and protect individuals from criminals who are trying to sell counterfeit and illicit versions of Gilead’s medicines,” Gilead said in a statement to CNBC. “In addition to this lawsuit, we continue to work closely with the FDA, OIG, FBI and prosecutors to dismantle counterfeiting networks, deter fraudsters, and thwart illegal pharmaceutical distribution.”
Last year, a CNBC investigation revealed the shadowy world of counterfeit drugs and how Gilead was fighting to stop criminals from altering its packaging and medications.
In many cases, according to Gilead and law enforcement officials, counterfeiters obtain medications from patients who sell them for cash. The labels are typically removed with lighter fluid and the bottles resealed and dispensed to other patients. In this most recent case against Khaim, lighter fluid was found at the pharmacies during the seizures, court documents said.

Don’t miss these insights from CNBC PRO More

Legacy media companies including Disney, Warner Bros. Discovery, Paramount Global and Comcast entered the streaming market with a focus on gaining subscribers but are now looking for a return on their investments.
Their strategies include cheaper, ad-supported models, platform bundles and a crackdown on password sharing, though price hikes have shown more immediate results toward profitability.
That means consumers are facing higher subscription costs with increasingly frequent price hikes.

Jaque Silva | SOPA Images | Lightrocket | Getty Images

Streaming is finally starting to pay off for media companies, but there’s a catch — to get there, consumers are facing higher subscription costs and increasingly frequent price hikes.
Legacy media companies entered the streaming market with a focus on gaining subscribers and competing with category leader Netflix as traditional cable TV bundles lose customers. Now, looking for a return on their content investments, Disney, Warner Bros. Discovery and others are aiming for streaming profits.

Their strategies include rolling out cheaper, ad-supported models; launching platform bundles; and cracking down on password sharing, but price hikes have shown more immediate results toward profitability.
“The years of prioritizing user growth with low prices are over,” said Mike Proulx, vice president and research director at Forrester.
Disney said last week that its combined streaming services — Disney+, Hulu and ESPN+ — were profitable for the first time during its fiscal third quarter. Although the company added new subscribers, that milestone was largely due to price increases.
CEO Bob Iger said during an earnings call that Disney has “earned” its pricing in the marketplace due to the company’s creative contributions and product improvements. He noted that with past price increases, the company hasn’t seen a “significant” number of customer departures.
“When we look across our portfolio … we’re seeing growth in consumption and the popularity of our offerings, which gives us the pricing leverage that we believe we have,” Iger said.

Climbing prices

The major streaming services have gone through a number of price hikes and changes throughout the past few years.
In just the past five months, four streamers have announced price increases: Warner Bros. Discovery’s Max, Comcast’s Peacock, Disney and Paramount.

Ahead of earnings, Disney announced it’s raising streaming prices by $1 to $2 a month for Hulu, Disney+ and ESPN+.
Similar to Disney, Paramount Global said last week in its quarterly earnings conference call that its streaming business, centered on flagship service Paramount+, reached profitability.
Paramount noted on the call that global average revenue per user grew 26% for Paramount+, which reflected a price increase during the third quarter of 2023. Meanwhile, additional price increases for Paramount+ go into effect this month, and the company expects to see a financial impact for that during the fourth quarter.
Though Comcast’s Peacock offered a limited-time annual subscription for $19.99 ahead of the Olympics, the company raised the monthly cost of the service’s ad-supported tier by $2 this summer, marking its second price hike of the year. Warner Bros. Discovery also increased the cost of Max without ads by $1 per month in June.
“For a decade in streaming, an enormously valuable amount of quality content has been given away well below fair market value. And I think that’s in the process of being corrected,” Warner Bros. Discovery finance chief Gunnar Wiedenfels said during an industry conference last year. “We’ve seen price increases across essentially the entire competitive set.”
When Disney reported a revenue increase in its most recent quarter, it was primarily driven by higher subscription prices, said Forrester’s Proulx, since user growth and ad revenue alone won’t sustain profitability.
That puts the burden of revenue growth somewhat on consumers’ shoulders, he said. And users are feeling the strain.
In a survey of 3,000 consumers, 90% agreed that streaming video subscriptions are raising their prices more often than they were in the past, according to Hub Entertainment Research.

Ad support

Picture Alliance | Picture Alliance | Getty Images

Meanwhile, companies are pushing consumers toward ad-supported tiers — which are often cheaper than commercial-free streaming — in a bid to attract more advertisers, Proulx said.
And many of those consumers are taking the option.
“We expect meaningful growth ahead as more subscribers opt for the ad-lite tier, which represented over 40% of global gross adds last quarter,” Warner Bros. Discovery’s Wiedenfels said during last week’s earnings call. Ad lite references Max’s cheapest subscription tier
Media companies have noted that advertising has grown for streaming. Warner Bros. Discovery said during its second-quarter earnings conference call that streaming ad revenue doubled year over year.
Similarly, revenue from advertising grew 16% in Paramount’s second quarter, driven by Paramount+ and Pluto TV, according to the company.
At Peacock, 75% of subscribers were on the ad-supported tier as of February of last year, according to research from Antenna. At the time it was the largest share of any of the major streamers, followed by Hulu at 57% and Paramount+ at 43%. The streaming companies don’t typically disclose the breakdown of subscriptions by tier.
“The advertising tier for all these companies is appealing because they can make as much off of ad revenues as they make off of the subscription fee on the ad tier,” said Tim Nollen, senior media tech analyst at Macquarie.
Netflix executives chafed against advertising for some time but pivoted in 2022 following a slowdown in subscriber growth. The company also recently nixed its cheapest, ad-free basic plan — leaving consumers with the choice of a $6.99 ad-supported option, or two ad-free plans that cost $15.49 or $22.99.

Netflix co-CEO Ted Sarandos said in the company’s second-quarter earnings call that the ad tier makes Netflix more accessible to users due to the low entry price. For both tiers, when it comes to raising prices, Sarandos said Netflix aims to increase value and engagement before having subscribers pay more.
Generally, price-pinched streaming consumers are willing to tolerate ads in order to pay lower subscription fees, according to Forrester’s research. Still, ad tiers aren’t immune to price increases. Disney+ is now raising prices of its ad-supported plan, for example.
Disney took a unique approach to launching its ad tier in December 2022, giving existing subscribers the option to either pay an additional $3 per month or accept ads. Nearly 95% of Disney+ premium plan subscribers paid to maintain ad-free streaming, according to Antenna.
Warner Bros. Discovery said in an earnings conference call that it suffered fewer customer losses than expected in July, following its $1 price increase on ad-free streaming.
“Until there’s a mass exodus of users, Disney (and others) will continue to increase prices,” Proulx said.

Keeping subscribers

Westend61 | Westend61 | Getty Images

There’s one key thing that’s working to streamers’ advantage: Across platforms, users aren’t often willing to sacrifice their desired content even when costs go up, said Hub Entertainment Research founder Jon Giegengack.
However, the total cost of streaming can sometimes exceed that of cable for certain consumers because the content they’re consuming is broken up across the different platforms, according to Proulx.
In response, companies including Disney, Paramount and Warner Bros. Discovery have turned to bundling their services into a single, discounted offering. In cases where streaming is no longer cheaper than traditional television, bundles allow consumers to save money while accessing TV content across different services, according to Proulx.
For providers, bundles are an opportunity to increase revenue because they expect fewer people to cancel their bundled subscriptions than stand-alone ones, according to Nollen.
“The new world of streaming is not as lucrative as the old world of pay TV was,” Nollen said. “Everybody has woken up to that, and they are coming up with ways to try to at least improve its fortunes, and bundling is one.” 
Streamers are also growing their total users by cracking down on password sharing. Last year, Netflix alerted members that accounts can only be shared within a single household, and Disney made a similar announcement earlier this year. Warner Bros. Discovery will soon follow suit.
Nonetheless, as consumers continue to face rising subscription costs, Giegengack points to a broader streaming competition. While low subscription prices initially helped other streamers grow subscribers, he said they can’t afford to keep doing that.
“The amount that people have been able to pay for, the volume of content they get up until now, is just an absurdly good deal, and I don’t think it’s sustainable,” Giegengack said.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC, and is a co-owner of Hulu. NBCUniversal also owns NBC Sports and NBC Olympics, which is the U.S. broadcast rights holder to all Summer and Winter Games through 2032.

Don’t miss these insights from CNBC PRO More

Ford Motor is updating its Lincoln Navigator to include a 48-inch front display.
The large SUV also comes with spa and gaming modes as part of the “Lincoln Rejuvenate” feature, which is meant to create a calming environment for the driver.
The automaker said pricing for the 2025 Navigator will start under $100,000, but more detailed pricing will be released closer to the vehicle going on sale in spring 2025.

2025 Lincoln Navigator

Ford Motor is updating its Lincoln Navigator to include a 48-inch front display that can be used as a “sanctuary” for spa lovers and gamers alike.
The new feature comes as the automaker has redesigned the exterior and interior of the vehicle for the 2025 model year — and as the Ford luxury brand attempts to differentiate Navigator amid declining sales of the large SUV.

“The all-new Navigator is more than just a vehicle; it can become a home away from home and a third space that rejuvenates clients in an entirely new way on and off the road,” Lincoln president Dianne Craig said in a release.
The “sanctuary” mode is part of the “Lincoln Rejuvenate” feature, which is meant to create a calming environment for the driver. Once initiated when parked, the driver’s seat automatically slides backward, reclines, warms slightly and makes massaging motions.

2025 Lincoln Navigator

The mode — in five- or 10-minute increments — also changes the vehicle’s climate, releases refreshing scents and plays relaxing videos and sounds such as a waterfall. Scent choices are mystic forest, ozonic azure and violet cashmere.
The vehicle comes preloaded with a “waterfall meditation” experience in partnership with meditation and sleep app company Calm; two other themes — “aurora borealis” and “elements” — are included with purchase.
“Navigator is the flagship of the Lincoln brand and represents our ultimate expression of sanctuary,” Craig said.

The large, horizontal screen and rejuvenate modes initially debuted on the 2024 Lincoln Nautilus, but the Navigator’s bigger interior allowed for further enhancements.

2025 Lincoln Navigator

If a driver prefers to turn to media for relaxation instead of having a spa experience, the front display can be split to play video and gaming apps while the vehicle is parked. Games currently include Asphalt Nitro 2, Angry Birds and Beach Buggy Racing 2.
The up-to-eight passenger SUV will continue to be powered by a twin-turbocharged 3.5-liter V6 engine with 440 horsepower and 510 pound-feet of torque. It also comes standard with the BlueCruise advanced driver-assistance system, which allows for hands-free driving on highways.
Ford said pricing for the 2025 Navigator will start under $100,000, but more detailed pricing will be released closer to the vehicle going on sale in spring 2025. The starting pricing for current models ranges from $83,000 to more than $114,000.
The Navigator’s current average transaction price is more than $101,300, according to Lincoln.
Lincoln’s sales were up 23.4% year over year through July, however, sales of the Navigator were off roughly 21% during that time.
The redesigned Navigator was revealed in connection to Monterey Car Week and the Pebble Beach Concours d’Elegance car show in California.

Read more CNBC auto news More

The Biden administration released prices or the first 10 medications subject to historic negotiations between the federal Medicare program and drugmakers.
But the announcement is just the beginning of a controversial, multi-round process that could produce more savings for taxpayers and older Americans and put more pressure on pharmaceutical companies over time.
It’s a key provision of President Joe Biden’s signature Inflation Reduction Act, which was signed into law two years ago. 

U.S. President Joe Biden and Vice President Kamala Harris walk out together, at an event on Medicare drug price negotiations, in Prince George’s County, Maryland, U.S., August 15, 2024. 
Ken Cedeno | Reuters

The Biden administration on Thursday reached a milestone in Democrats’ decades-long quest to use Medicare to drive down prescription drug costs, releasing new prices for the first 10 medications subject to negotiations between the federal program and drugmakers.
But the announcement is just the beginning of a controversial, multi-round process that could save more money for taxpayers and older Americans and put more pressure on pharmaceutical companies over time. It’s a key provision of President Joe Biden’s signature Inflation Reduction Act, which was signed into law almost exactly two years ago. 

The agreed-upon prices, which go into effect in 2026, set the precedent for the future rounds of negotiations that will kick off next year. Those talks will likely affect prices in the coming years for dozens more widely used drugs made by the largest pharmaceutical companies in the world.
“I think the expectation that people should have is that this is just the start. These are just the first ten drugs,” said Leigh Purvis, a prescription drug policy principal with AARP Public Policy Institute, an arm of the influential lobbying group that represents people older than 50, which has advocated for Medicare’s negotiation powers.
“Sometimes people get caught up in the fact that their drug isn’t on the list, but it will be on the list at some point in the future if they’re taking a drug that’s resulting in high costs,” Purvis added.
It’s unclear how much lower the negotiated prices are than the current net prices of the first 10 drugs, which are heavily rebated by Medicare Part D plans. Those net prices aren’t publicly available, making it difficult to know how much a Medicare plan and a patient would actually save on a given drug when the negotiated prices start in 2026. Copays could also differ depending on the Part D plan a patient has.
“It’s hard to know the starting point, because … those numbers are not publicly available,” said Tricia Neuman, executive director for the Program on Medicare Policy at health policy research organization KFF, referring to net prices after rebates.

Still, the Biden administration estimates that the new negotiated prices for the medications will lead to around $6 billion in net savings for the Medicare program and $1.5 billion in out-of-pocket savings for beneficiaries in 2026 alone. 
The negotiations “seemed to go relatively smoothly – the aggregate savings are fairly impressive,” Neuman said. She added as prices of more drugs are hashed out during future rounds, it will “increase the level of savings over time.” 
The price talks could also put more pressure on drugmakers in the coming years. Many of the medications in the first round of negotiations are already nearing patent expirations that will open the market to competition from cheaper generics, which will take a bite out of revenue. 
For example, Bristol Myers Squibb’s blood thinner Eliquis is slated to lose patent exclusivity in the U.S. starting on April 1, 2028. The blockbuster drug also faces patent expirations in certain EU markets in 2026.

George Frey | Reuters

But over time, drugs much further from losing market exclusivity could be selected for future rounds of negotiations, Leerink Partners analyst David Risinger said in a research note Thursday. 
By February 2025, the Biden administration will select up to 15 more drugs that will be subject to the next round of price talks, with new prices going into effect in 2027. Manufacturers will have until the end of February to decide whether to participate in the program — a no-brainer for companies as they face steep excise taxes or the loss of access to the federal Medicare and Medicaid programs if they do not. 
“It will start to get more painful over time,” Jeff Jonas, a portfolio manager at Gabelli Funds, said in a statement Thursday. He noted, for instance, that the next round of price talks will likely include Novo Nordisk’s top-selling diabetes drug Ozempic. 
Jonas added that there was “some speculation that the government went easy on the pharma companies this year given that it is both an election year and the first time they’re doing this.” 
After the second round, the Centers for Medicare and Medicaid Services can negotiate prices for another 15 drugs that will go into effect in 2028. The number rises to 20 a year starting in 2029.
CMS will only select Medicare Part D drugs for the medicines covered by the first two years of negotiations. It will add more specialized drugs covered by Medicare Part B, which are typically administered by doctors, for the round that takes effect in 2028.
That could be a bigger threat to the pharmaceutical industry, as Medicare Part B drugs aren’t discounted as steeply as medicine covered by Part D. 
“My assumption, since rebates are limited, is they have farther to fall versus Part D drugs that are heavily rebated,” Risinger told CNBC in an interview, referring to medications covered by Part B. 
Jonas noted that negotiations for 2028 price changes could include some big cancer drugs, such as Merck’s blockbuster chemotherapy Keytruda. 
Vice President Kamala Harris, the Democratic presidential nominee, would likely try to expand the scope of negotiations if elected and “likely be more aggressive on the discounts,” Jonas said.
But Neuman said that whether she can pass a law to bolster the policy will depend on which party controls the House and Senate. Harris herself had to cast a tiebreaking vote in the Democratic-held Senate to pass the original law.
“There’s some interest among Democrats in Congress in doing that, but obviously the law will depend on which party is in control,” Neuman said.
The pharmaceutical industry has argued that the negotiations could cut into their revenue, profits and innovation in the long term. 
For example, Steve Ubl, the CEO of the pharmaceutical industry’s biggest lobbying group, PhRMA, said in a statement Thursday that the price talks could result in fewer treatments for cancer, mental health, rare diseases and other conditions because it “fundamentally alters” the incentives for drug development.
Medicare can start negotiating prices on small-molecule drugs as early as nine years after they receive U.S. Food and Drug Administration approval, compared with 13 years for biologics. Small molecule drugs are made of chemicals that have low molecular weight, while biologic medicines are derived from living sources such as animals or humans.
The industry has argued that the distinction is going to deter companies from investing in small-molecule drugs.
— CNBC’s Angelica Peebles contributed to this report More

United Airlines CEO Scott Kirby had been critical of Boeing as his company, a major buyer of Boeing planes, faced a series of delays from manufacturing flaws.
Robert “Kelly” Ortberg took the reins at Boeing last week promising to win back trust.
Kirby and Ortberg had lunch in the Dallas area this week.

United Airlines CEO Scott Kirby celebrates the opening of a new addition to its Flight Training Center in Denver, Colorado, on Feb. 22, 2024.
Hyoung Chang | Denver Post | Getty Images

United Airlines CEO Scott Kirby says he is optimistic about Boeing’s recovery after meeting with the manufacturer’s new chief executive.
It’s an upbeat change of tune from the head of United, a top Boeing customer that has been among the most publicly frustrated about the plane maker’s problems, which have led to delayed deliveries of dozens of aircraft.

Kirby and Boeing’s new CEO, Robert “Kelly” Ortberg, had lunch earlier this week in the Dallas area. Kirby said in a LinkedIn post on Thursday that he “was not only encouraged by what I heard, but I also came away with a renewed confidence that Boeing is on the right path and will recover faster than most expect.”
United has 484 unfilled orders with Boeing, according to the manufacturer’s website.
Ortberg also met with American Airlines CEO Robert Isom earlier this week, according to a person familiar with the matter who wasn’t authorized to speak with the media.

Read more CNBC airline news

Ortberg, who previously ran commercial and defense supplier Rockwell Collins and has more than three decades of experience in the aerospace industry, took the reins at Boeing a week ago, spending part of his first day at Boeing’s 737 factory floor in Renton, Washington. Ortberg will be based in Seattle, a shift from previous leaders.
“His engineering background at Rockwell Collins, combined with an instinct to be close to his frontline teams in Seattle, makes for a winning combination,” Kirby wrote on Thursday. “It was clear from our discussion that he’s 100% engaged, understands the cultural changes needed to turn things around and is committed to listening to his employees and customers.”

United and other major customers such as Southwest Airlines have been grappling with delayed jetliners as Boeing tries to recover from its latest safety crisis in the wake of a door plug blowout on an Alaska Airlines 737 Max 9 earlier this year.
No one was seriously injured in the accident — which occurred after bolts that hold the door plug in place weren’t installed before the airline received the plane — but it came after a host of other manufacturing defects on Boeing planes.
“In speaking with our customers and industry partners leading up to today, I can tell you that without exception, everyone wants us to succeed,” Ortberg said in a note to staff on his first day last Thursday. “In many cases, they NEED us to succeed.”

Don’t miss these insights from CNBC PRO More