Raphael Stevens

More stories

  • 250 Shares159 Views

    in Business

    Weight loss drug Wegovy is now approved for heart health — but that won’t mean broad insurance coverage just yet

    The blockbuster weight loss drug Wegovy is now approved in the U.S. for heart health. 
    But some health plans and employers are still reluctant to cover Wegovy due to its hefty price tag, which they say could significantly strain their budgets.
    Plans are likely to take notice of Wegovy’s new approval and start considering whether to cover the treatment when they next update their formularies.

    Victoria Klesty | Reuters

    In the U.S., Wegovy is no longer just for weight loss.
    The blockbuster drug — one of a handful of weight loss treatments to skyrocket in popularity over the last year — is now approved in the U.S. for heart health, too. But that may not translate to wider insurance coverage of the weekly injection drug from Novo Nordisk and similar obesity treatments just yet.

    Some employers and other health plans are still reluctant to cover Wegovy due to its hefty $1,350 monthly price tag, which they say could significantly strain their budgets. They also have other questions, such as how long patients actually stay on the treatment. 
    At the very least, some plans will take notice of Wegovy’s new approval and start assessing whether to cover the treatment when they next update their formularies, some insurance industry experts told CNBC. That could mean difficult decisions ahead for insurers and likely a patchwork system of coverage for Americans who are seeking treatment to navigate.
    “The more benefits that come from weight loss drugs, I think the greater the pressure is going to be to start including those drugs in a formulary and cover them in standard insurance plans,” said John Crable, senior vice president of Corporate Synergies, a national insurance and employee benefits brokerage and consultancy. “But my gut tells me it’s going to take more to convince some insurers.”
    Wegovy is part of a class of drugs called GLP-1s, which mimic a hormone produced in the gut to suppress a person’s appetite and help regulate blood sugar. Coverage for those treatments when used for weight loss is a mixed bag. 
    Roughly 110 million American adults are living with obesity and approximately 50 million of them have insurance coverage for weight loss drugs, a spokesperson for Novo Nordisk said in a statement. The company is actively working with private insurers and employers to encourage broader coverage of those drugs, and is advocating for the federal Medicare program to start covering them, the spokesperson added.

    The Centers for Medicare and Medicaid Services is reviewing the FDA’s expanded approval of Wegovy and will share additional information as appropriate, an agency spokesperson said in an email.
    The spokesperson added that state Medicaid programs would be required to cover Wegovy for its new cardiovascular use. By law, Medicaid must cover nearly all FDA-approved medications, but weight loss treatments are among a small group of drugs that can be excluded from coverage. Around one in five state Medicaid programs currently cover GLP-1 drugs for weight loss.
    Some of the nation’s largest insurers, such as CVS Health’s Aetna, cover those treatments.
    But many employers don’t. An October survey of more than 200 companies by the International Foundation of Employee Benefit Plans, or IFEBP, found only 27% provided coverage for GLP-1s for weight loss, compared with the 76% that covered those drugs for diabetes. Notably, 13% of employers indicated they were considering coverage for weight loss.

    Downstream health effects

    The Food and Drug Administration approved Wegovy for weight management in 2021. In a landmark decision earlier this month, the agency expanded that approval after Wegovy was found to cut the risk of serious cardiovascular complications in adults with obesity and heart disease.
    The decision was based on a five-year, late-stage trial, which showed that weekly injections of Wegovy slashed the overall risk of heart attack, stroke and cardiovascular death by 20%. 
    The approval demonstrates the significant downstream health benefits of Wegovy — and potentially similar drugs — for severe conditions caused by excess weight. Obesity increases the risk of several conditions, such as diabetes, heart disease and even some cancers. 

    An obesity patient takes a injection of weight loss medication.
    Joe Buglewicz | The Washington Post | Getty Images

    It also challenges what some health experts call an “outdated” narrative driving hesitancy among some insurers: that weight loss treatments offer only a cosmetic rather than a medical benefit. 
    “We haven’t previously seen any anti-obesity medication decrease the risk of heart attack and stroke,” said Dr. Jaime Almandoz, a weight management and metabolism specialist at the University of Texas Southwestern Medical Center in Dallas. “What we have is proof that treating obesity is essentially life-saving, and I think it really shifts the conversation.” 
    And the lack of broader insurance coverage for those drugs creates a “huge equity issue in our country around treatment access and even health access,” said Dr. Angela Fitch, knownwell chief medical officer.
    Some health experts also argue that covering Wegovy and other GLP-1s for weight loss could reduce a plan’s health-care costs down the line and improve future health outcomes for patients. 
    Shawn Gremminger, the president and CEO of the National Alliance of Healthcare Purchaser Coalitions, said employers would be “well disposed to cover” those drugs if they are effective at lowering long-term costs. Members of that group represent private, public, nonprofit and union and Taft-Hartley organizations that spend over $400 billion annually on health-care.
    But he said that it will likely take years before employers have access to concrete data on the potential cost savings of covering those treatments. 
    Gremminger added that employers are “a little bit less focused” on what covering weight loss drugs will mean for overall health-care spending 10 years from now. Their focus is on providing care to their current employees, some of whom will end up leaving the company down the line. 

    Boxes of Wegovy lie beside a packaging line at Novo Nordisk’s facility in Hillerod, Denmark, March 8, 2024. 
    Tom Little | Reuters

    Employers have other questions, too, including about longer-term data on GLP-1s for weight loss, and about patients stopping those drugs prematurely. It also isn’t clear to some employers whether patients have to stay on Wegovy for the rest of their lives or if they can eventually taper off of it, Gremminger said.
    Obesity and heart disease are chronic diseases, which means most patients will have to keep taking Wegovy along with diet and exercise to maintain the health benefits. Novo Nordisk said, “not unexpectedly,” data from their clinical trials shows that people who took Wegovy regained weight when they went off the drug.
    “This supports the belief that obesity is a chronic disease that requires long-term management, much like high blood pressure or high cholesterol, for which most patients remain on therapy long term in order to continue to experience the benefits of their medications,” Novo Nordisk said in a statement.
    But Gremminger said the standard of care for the long-term use of weight loss drugs is “in flux.”

    Considering the costs 

    Faced with the dramatic cost of covering Wegovy and similar drugs, the state of North Carolina is paring back.
    State employees will no longer have insurance coverage for GLP-1s when used for weight loss at the beginning of next month. The plan will still cover GLP-1s for diabetes, such as Novo Nordisk’s Ozempic, along with some older obesity drugs.  
    North Carolina’s treasurer and a GOP candidate for governor, Dale Folwell, told CNBC the expanded approval of Wegovy last week doesn’t change anything.
    “We’ve never questioned the efficacy of the drug. We’ve always questioned what we’re having to pay for it,” Folwell said. “Even as the scope of the use of this drug widens, it doesn’t change the cost.” 

    North Carolina State Treasurer Dale Folwell attends the Republican Governors Association conference in Orlando, Florida, Nov. 16, 2022.
    Phelan M. Ebenhack | AP

    He said dropping weight loss drug coverage wasn’t a decision the plan’s board of trustees wanted to make in January, but it did so because the plan is “under financial siege” due to Wegovy. That treatment cost the state’s health plan nearly $87 million last year, according to a state presentation from January. Overall, GLP-1 drugs for weight loss cost the plan roughly $102 million in 2023. 
    An outside consultant projected a $1.5 billion loss by 2030 if the state plan continued to pay for those treatments. North Carolina also estimated that continuing to cover GLP-1s for weight loss would double the premiums for all 482,000 active employees and dependents on the plan, even those not taking the drugs. 
    Folwell said the state has been working with Novo Nordisk and Eli Lilly, the maker of similar treatment Zepbound, to reach an agreement on costs. But he noted that the companies have rejected the state’s recommendations “at every turn.” 
    A spokesperson for Eli Lilly said the company is committed to working with health-care, government and industry partners “to help people who may benefit from Zepbound access it, but obstacles to that goal still exist.” The spokesperson added that policies around insurance have “not caught up to science.” 
    Novo Nordisk said in a statement it urges Folwell and the state health plan to “put patients first” and reconsider the decision to drop weight loss drug coverage.
    Novo Nordisk believes “denying patients insurance coverage for important and effective FDA approved treatments for obesity is irresponsible,” according to a company spokesperson, who said the company will continue to engage with state health plan officials to address any potential cost concerns.
    Both drugmakers have launched programs to help patients, with or without commercial insurance coverage, afford their weight loss treatments.
    Novo Nordisk says its savings program can help patients without insurance coverage save up to $500 per 28-day supply of Wegovy. The company also said roughly 80% of Wegovy patients in the U.S. with commercial coverage for the drug are paying $25 per month or less.

    List prices of weight loss drugs before insurance

    Wegovy from Novo Nordisk: $1,349.02 per monthly package
    Zepbound from Eli Lilly: $1,059.87 per monthly package
    Saxenda from Novo Nordisk: $1,349.02 per monthly package

    Increased competition in the weight loss drug market could force the two companies to drive down the costs of their injectable treatments, said Ceci Connolly, CEO of the Alliance of Community Health Plans. The organization represents regional, community-based health plans that cover more than 18 million Americans across the U.S. 
    Health plans may also be more open to covering convenient and potentially cheaper oral versions of the drugs, which several drugmakers are racing to develop. Those cheaper options, though, are likely still years away. That includes cheaper generic versions of existing GLP-1s, along with treatments from rival drugmakers.

    Coverage with cost controls 

    More employers will likely start considering coverage of Wegovy following its expanded approval, according to Julie Stich, vice president of content at IFEBP.
    But the plans that decide to include Wegovy when they next update their formularies will likely consider implementing certain requirements to control costs. Those requirements will look different for Wegovy’s two approved uses. 
    Most employers that cover GLP-1s for weight loss already use cost controls, according to the October survey by IFEBP.
    Nearly a third of companies said they used “step therapy,” which requires their members to try other lower-cost medications or means of losing weight before using a GLP-1. Around 16% of employers used certain eligibility rules, such as requiring employees to have a certain BMI, or body-mass index, to receive coverage. 

    Fiordaliso | Moment | Getty Images

    Other employers are using financial requirements, such as annual or lifetime spending caps for the treatments. For example, the Mayo Clinic’s employee health plan added a lifetime coverage limit of $20,000 for weight loss drug prescriptions filled after Jan. 1. 
    Meanwhile some players in the insurance industry are trying to find ways to help health plans manage the costs of covering the treatments. 
    Last week, Cigna’s pharmacy benefits management unit said it will limit spending increases for GLP-1s to a maximum of 15% annually for employers and other health plans. Currently, some of the company’s clients are seeing spending for those treatments rise 40% to 50% annually. 
    If more insurers and pharmacy benefits managers pursue similar efforts, their affiliated health plans could become more open to covering weight loss drugs “knowing that their risk will be limited in that way,” Stich said.
    Clarification: This story has been updated to clarify the price of Wegovy. It’s $1,350 per month. More

  • 175 Shares169 Views

    in Finance

    China kicks off the year on strong note as retail, industrial data tops expectations

    Retail sales rose 5.5%, better than the 5.2% increase forecast in a Reuters’ poll, while industrial production increased 7%, compared with estimates of 5% growth.
    Fixed asset investment rose by 4.2%, more than the forecast of 3.2%.
    Online retail sales of physical goods rose by 14.4% from a year ago during the first two months of the year.

    High-rise residential and commercial buildings are being constructed near Dongyu Road, Qiantan, in the Pudong New Area of Shanghai, China, on March 15, 2024. 
    Nurphoto | Nurphoto | Getty Images

    BEIJING —  China on Monday reported economic data for the first two months of the year that beat analysts’ expectations.
    Retail sales rose 5.5%, better than the 5.2% increase forecast in a Reuters’ poll, while industrial production increased 7%, compared with estimates of 5% growth.

    Fixed asset investment rose by 4.2%, more than the forecast of 3.2%.
    The unemployment rate for cities was 5.3% in February.
    Online retail sales of physical goods rose by 14.4% from a year ago during the first two months of the year.
    Investment into real estate fell by 9% in the first two months of the year from a year ago. Investment in infrastructure rose by 6.3% while that in manufacturing increased by 9.4% during that time.
    Economic figures for January and February are typically combined in China to smooth out variations from the Lunar New Year, which can fall in either month depending on the calendar year. It is the country’s biggest national holiday, in which factories and businesses remain closed for at least a week.

    This year, the number of domestic tourist trips and revenue during the holiday grew compared with last year as well as pre-pandemic figures from 2019. But Nomura’s Chief China Economist Ting Lu pointed out that “average tourism spending per trip was still 9.5% below pre-pandemic levels in 2019.”
    Retail sales did not rebound from the pandemic as strongly as many had expected as consumers have grown uncertain about their future income.
    New loans in February missed expectations and fell from the prior month, “even after adjusting for seasonality,” Goldman Sachs analysts said in a report Friday.
    “The persistent weakness in property transactions and low consumer sentiment may continue to weigh on household borrowing,” the analysts said. “More monetary policy easing is needed.”
    People’s Bank of China Governor Pan Gongsheng said earlier this month there was still room to cut the reserve requirement ratio, or the amount of cash banks need to have on hand.
    Goldman expects 25 basis point cuts to that ratio in the second quarter of this year, as well as in the fourth quarter.
    Real estate, which accounts for a significant part of household assets, has slumped over the last few years after Beijing’s crackdown on developers’ high reliance on debt for growth.
    The average property price for 70 major Chinese cities fell by 4.5% in February from January on a seasonally adjusted, annualized basis, according to Goldman Sachs’ analysis using a weighted average of official figures.
    That’s steeper than the 3.5% month-on-month drop in property prices in January, Goldman Sachs said.
    “Our high frequency tracker suggests that 30-city new home transaction volume declined by 53.2% [year-on-year] in early March after adjusting to the lunar calendar basis,” the analysts said in a report.
    Chinese authorities did not reveal significant new support for the massive real estate sector during an annual parliamentary meeting that ended last week.
    Instead, Beijing emphasized the country’s focus on developing manufacturing and technological capabilities.
    Data earlier this month showed China’s exports for January and February rose by 7.1% in U.S. dollar terms, beating expectations for a 1.9% increase.
    Imports climbed by 3.5% during that time, also topping Reuters’ forecast for growth of 1.5%. More

  • 200 Shares179 Views

    in Business

    The state of women’s sports: Top executives weigh in on parity, media share and NIL regulations

    Women’s sports reached an inflection point in 2023, propelled by major new broadcast deals, once-in-a-lifetime players and record-breaking audiences that dramatically changed the sports landscape.
    Revenue generated by women’s elite sports could surpass $1 billion this year, a 300% increase from 2021, according to estimates from Deloitte.
    CNBC surveyed some of the most high-powered women executives in sports to hear their thoughts on parity, lightning rod moments, media share and name, image and likeness regulations.

    Guard Caitlin Clark #22 of the Iowa Hawkeyes listens as the crowd cheers after breaking the NCAA women’s all-time scoring record during the game against the Michigan Wolverines at Carver-Hawkeye Arena on February 15, 2024 in Iowa City, Iowa. 
    Matthew Holst | Getty Images

    Women’s sports reached an inflection point in 2023, propelled by major new broadcast deals, once-in-a-lifetime players and record-breaking audiences that dramatically changed the sports landscape.
    From Caitlin Clark fever in Iowa to a packed house of 92,000 fans for women’s volleyball in Nebraska, women’s sports have never been more at the forefront.

    And it’s not slowing down.
    Revenue generated by women’s elite sports could surpass $1 billion this year, a 300% increase from 2021, according to estimates from Deloitte.
    Bigger media deals and more commercial sponsors are driving record valuations for women’s sports, with several teams’ values expected to exceed $100 million in 2024, according to Deloitte.
    Last year saw record media deals for women’s sports as the NCAA and NWSL both inked groundbreaking agreements. And investors from private equity to celebrities are lining up to get in the game.
    Yet, there’s still a lot of work to be done, specifically, in the areas of equal pay, prime-time access and even the need for more historical data.

    CNBC surveyed some of the most high-powered women executives in sports, ranging from league commissioners to team owners and CEOs, to hear their thoughts on the state of women in sports. Some of their answers have been edited for style, clarity and length.

    What do you see as the primary obstacle hindering the growth of women’s sports?

    Renie Anderson, executive vice president and chief revenue officer for the NFL: The obstacle, or really the opportunity, for today is to continue to amplify the spectacular athleticism of these women. Rather than be shocked and surprised that women are spectacular at sport, we need to do a better job of weaving in the message of greatness when highlighting the greatness in men’s sports. It’s there. It just doesn’t get the attention it deserves.

    Jessica Berman, National Women’s Soccer League Commissioner
    Jesse Grant | CNBC

    Jessica Berman, commissioner of the National Women’s Soccer League: Because the world has woken up to women’s sports, the expectations on how fast this can grow, from all stakeholders, is really challenging. We’re 100 years behind men’s sports, and so it’s not to say that we should move slowly. It is to say that it is challenging to sort of build the plane as quickly as so many stakeholders expect it to be built — and to do it in a way that’s sustainable and commercially viable.

    WNBA Commissioner Cathy Engelbert speaks to the media to award Breanna Stewart #30 of the New York Liberty with the 2023 Kia WNBA Most Valuable Player Award before the game against the Connecticut Sun during round two game two of the 2023 WNBA playoffs on September 26, 2023 in Brooklyn, New York. 
    David Dow | Getty Images

    Cathy Engelbert, commissioner of the Women’s National Basketball Association: One of the obstacles is the undervaluation of our assets. Whether it’s a patch on the uniform or an ad buy on a broadcast, we need to change the model. It’s based on decades-old spreadsheet models that are tailored to men’s sports and in those models, a lot of things that companies are now supporting in women’s sports aren’t being accounted for like their diversity, their community, the fact that they are not the “one and done” type.

    Jessica Gelman speaks during the 15th Annual Sports Business Journal Awards ceremony at New York Marriott Marquis Hotel on May 18, 2022 in New York City. 
    John Lamparski | Getty Images

    Jessica Gelman, KAGR CEO and founder of the MIT Sloan Sports Analytics Conference: A major obstacle has been available data on performance which supports and enhances storytelling. These stories create interest and drive (i.e. see Caitlin Clark’s NCAA scoring record quest). This past year the MIT Sloan Sports Analytics Conference donated to Sports-Reference to support the addition of college women’s data back to 1987.
    Jayna Hefford, senior vice president of operations for the Professional Women’s Hockey League: Women’s sports still struggle to secure prime broadcast windows, consistent airtime and traditional media coverage. Furthermore, the scarcity of traditional media coverage has historically forced women’s teams and leagues, as well as women-owned media companies, to take the lead in promoting their own narratives. This limited visibility has made it challenging to attract brand support, even though research indicates that companies investing in women’s sports see lucrative returns.

    Haley Rosen, Just Women’s Sports
    Source: Just Women’s Sports

    Haley Rosen, CEO and founder of Just Women’s Sports: One of the biggest obstacles hindering the progress of women’s sports today is relying on the legacy platforms. Legacy platforms aren’t set up to support women’s sports and build on the momentum. Yes, they’ll air the games. But there’s only so much time in the day for the shoulder programming and coverage needed to amplify the women’s leagues, and legacy platforms are always going to prioritize men’s sports. Viewership numbers are rising, but the relative percentage of women’s sports coverage on legacy platforms hasn’t changed.

    Mollie Marcoux Samaan, LPGA Commissioner, speaks during the State of the Association press conference during the first round of the CME Group Tour Championship at Tiburon Golf Club on November 16, 2023 in Naples, Florida. 
    Michael Reaves | Getty Images

    Mollie Marcoux Samaan, commissioner of the Ladies Professional Golf Association: Women’s sports today face two primary obstacles: investment and exposure. At the LPGA we’ve made some great strides. Our total revenue has gone up 65% in the last four years, and total purses — the prize funds players’ play for each week — has grown 70% since 2021. That’s because of investment, because of partnerships, because of corporate decision makers seeing not only the significant commercial value of the LPGA but also the opportunity to have a positive impact on the world.

    How can women’s sports leverage milestone events like those seen in 2023 to further expand reach?

    NEW YORK, NY – AUGUST 22: USTA President Katrina Adams speaks during the Louis Armstrong Stadium Dedication Ceremony at USTA Billie Jean King National Tennis Center on August 22, 2018 in New York City. (Photo by Steven Ryan/Getty Images)
    Steven Ryan | Getty Images Sport | Getty Images

    Katrina Adams, former pro tennis player and ex-CEO of the United States Tennis Association: I think what the Women’s Tennis Association has done for many years, is shown other professional sports what can be achieved if they use your voice and their talent, that they can survive. When you look at the players of today — you know, we talk about the [Caitlin Clark types] and Sabrina Ionescu and Coco Gauff, who was the highest paid athlete last year — there’s so many opportunities for these young women to use their platform to really speak up and speak out on what it means to be on a level playing field week in and week out.
    Berman: I think we have to go from these being moments to being part of a movement, so that we get out of the default of having these reference points be episodic, or transactional or in isolation, so that it can translate to more sustainable growth and investment. I think the more we can demonstrate and talk about some of those consistent data points that show that the business is actually being built in a more consistent way, the easier it’ll be to debunk the narrative that these are one-off success stories.

    Pamela Duckworth
    Source: FuboTV

    Pamela Duckworth, head of Fubo Studios at FuboTV: Female athletes are multifaceted — they are also mothers, businesswomen, philanthropists, media moguls and more. We can use the momentum from attention-grabbing sports moments to bring athletes’ stories to the forefront and connect with broader audiences that way.
    Engelbert: Sports is about marketing, marketing, marketing. If you look back at the history of the NBA that put the league on the map and the multibillion-dollar deals, it was a rivalry coming out of college, Magic Johnson and Larry Bird. Then it was a marketing genius with Michael Jordan and Nike. But you need capital to market and advertise. I think the marketing strategy we put in place now that we have this capital is to build household names, create rivalries, and promote games or events of consequence.

    Fanduel CEO Amy Howe attends The Future of Everything presented by the Wall Street Journal at Spring Studios on May 18, 2022 in New York City.
    Steven Ferdman | Getty Images

    Amy Howe, FanDuel CEO: Women’s sports need to continue to position their star athletes (i.e. Ionescu, A’ja Wilson and Breanna Stewart of WNBA) in the mainstream at parity with their male counterparts – the 3-point competition was a perfect example. Not surprisingly, all of this investment and support is fueling greater performance from female athletes which is driving added success in places like FanDuel’s business, where we saw a 270% increase in bet counts on women’s sports and 101% increase in handle, or amount wagered. It’s a real flywheel effect.
    Rosen: There are tens of millions of sports fans out there waiting to be onboarded into this space. We have to make it easy and fun for them to be a women’s sports fan and not just rely on the stand-alone moments. That means meeting them every day on their feeds, creating content that engages them and keeps them continually connected to this space. 
    Kelly Laferriere, chief business officer, A-Rod Corp.:
    The investment community and media companies are taking notice. They recognize the strategic value. Distributing women’s sports content across multiple media platforms to reach the widest possible audience will drive new revenue and keep women’s sports part of mainstream conversations. The Paris Olympics in July also creates an opportunity for female athletes to shine on the world stage.

    How do name, image and likeness regulations factor into the growth of women’s sports?

    Adams: I think it’s an opportunity for our women to finally be recognized and actually make a living. The men, they’ve had this opportunity for years, for decades, “under the table,” if you will, now the women are able to do it legally with the NIL. For them to make a little money and really grow the sport in their communities, in their cities in their college towns, etc. I think it’s great. They’re learning how to become entrepreneurs at a younger age, and they’re doing extremely well.

    A portrait of Renie Anderson NFL SVP, Chief Revenue Officer.
    Source: NFL

    Anderson: I think NIL helps likely a small few through their social media. I’m not sure outside of a handful of amazing athletes/influencers it’s going to be spread out throughout college sports for women, like it is for football for men. But I guess we wait and see. I don’t think it hurts, but for those few women that do benefit, it’s an opportunity for them to lift up other women.
    Duckworth: NIL opens doors for female athletes to build their own brands in ways that weren’t possible before. Why shouldn’t a female athlete make money the same way her male counterpart can? Money equals independence in my book. Kudos to major sports stars like Angel Reese or Caitlin Clark on showing young women just what can be built. 

    Billie Jean King and Jayna Hefford walk to centre ice for the ceremonial puck drop before Toronto plays New York in their PWHL hockey game at the Mattamy Athletic Centre on January 1, 2024 in Toronto, Ontario, Canada. 
    Mark Blinch | Getty Images

    Hefford: The positive impact of NIL on women’s college athletics has reverberated throughout women’s sports, creating a scenario where all boats rise. As more female athletes become household names, the investment in women’s sports is likely to increase, encouraging more young girls to start — or continue participating in — sports.
    Rosen: On paper, it’s great and we should celebrate anything that helps women athletes grow their brand and monetize their talents. There are obviously still some details that need to be ironed out, especially when it comes to team dynamics and the potential for NIL deals to force players into taking the short-term profit at the cost of their long-term development. More

  • 163 Shares119 Views

    in Finance

    Bitcoin may start to lose its reputation as a volatile asset. Here’s why

    Bitcoin may start to lose its reputation as a volatile asset.
    According to Bitwise Asset Management’s Matt Hougan, the cryptocurrency’s wild price swings have come down substantially over the past decade.

    “What’s driving the bitcoin market right now is a simple demand-supply imbalance,” the firm’s chief investment officer told CNBC’s “ETF Edge” on Monday. “We have this huge new source of demand from these ETFs, and we have supply that’s inelastic.”
    On Jan. 11, the first bitcoin exchange-traded funds began trading. Since then, the asset is up more than 50%. Bitcoin hit an all-time high this week of just under $74,000.
    Yet, Hougan acknowledges it may not be for everyone.
    “It moves around a lot. Some people find it difficult to understand,” Hougan said.
    While Bitwise is betting on bitcoin’s growth, ProShares has an ETF looking to profit from losses with its Short Bitcoin Strategy ETF. It’s down 42% so far this year and has plummeted almost 70% over the past year.

    “To quote Mark Twain, ‘The reports of our death have been quite exaggerated,'” ProShares’ Simeon Hyman told CNBC. “We’re happy to be here, and we think we’re serving as a key alternative.”
    Hyman, the firm’s global investment strategist, notes bitcoin’s historic strength has been going on a lot longer than the launch of the spot bitcoin ETFs.
    “This is the month of the anniversary of the collapse of crypto-linked financial institutions. Last year, bitcoin was going up then, too,” Hyman said. “I think there are longer-term folks who are starting to come in for asset allocation and diversification purposes.”
    Hyman’s ProShares also operates a long-bitcoin ETF: ProShares Bitcoin Strategy ETF. It’s up 55% since Jan.1 and has gained 111% in the past year.
    As of Friday evening, bitcoin is up 180% over the past 12 months.

    Disclaimer More

  • 188 Shares179 Views

    in Business

    Beyoncé’s country songs are bringing new listeners to the genre, boosting streams for Black artists

    Beyoncé is embarking on her country era with a new album, “Cowboy Carter.”
    The two singles she’s released so far have been smash hits and have boosted streams for other Black female country stars along the way.
    As Beyoncé helps break the country mold, she’s also bringing a younger audience into the western genre.
    The superstar isn’t alone: Country artists such as Maren Morris, Luke Combs and Kacey Musgraves have taken a more progressive approach to the genre than the traditional themes of beer, pickup trucks and rural living.

    Beyonce leaves the Luar fashion show at 154 Scott in Brooklyn during New York Fashion Week on February 13, 2024 in New York City. 
    James Devaney | GC Images | Getty Images

    Country music, meet Cowboy Carter.
    Superstar singer-songwriter Beyoncé Knowles is foraying into country music — taking on a genre that has excluded women of color for decades and in the process proving its listeners have a strong interest in Black female artists. Her country music era, launched during a Super Bowl ad in mid-February and headlined by an upcoming album, is broadening the industry’s listenership and igniting streaming numbers for songs by other Black female country artists.

    Country star Tanner Adell, a Black artist, saw U.S. streams of her track “Buckle Bunny” soar 305% during the first week of March, according to data from Spotify. Another song from Adell, “Trailer Park Barbie,” saw a 130% jump in streams, the music streaming company said.
    Other Black female country artists like Mickey Guyton and Reyna Roberts saw boosts too, and Knowles’ own country-esque song “Daddy Lessons,” off her sixth studio pop album, “Lemonade,” spiked 540% in streams the day after her two country singles were released last month, Spotify reported.
    “Texas Hold ‘Em,” one of those singles, made her the first Black woman to claim the No. 1 spot on Billboard’s Hot Country chart, according to the famed music magazine.
    That song and her second recent country hit, “16 Carriages,” will appear on “Act II: Cowboy Carter.” Knowles announced the album title in a Tuesday post on her website. It follows “Act I: Renaissance” and serves as the second installment to a three-part project.
    Knowles’ album announcement was a “pinnacle moment in time,” according to The New York Times bestselling author, country songwriter and lecturer Alice Randall, who was the first Black woman to write a No.1 song for an artist on the Hot Country chart, back in 1994.

    “Beyoncé is signaling that Black women have been in country music almost since the beginning,” Randall said. “We have finally broken through the redlining that kept us out of the charts.”

    Breaking into country

    Acceptance for artists of color in country music remains a challenge, though, — even for Knowles, whose recorded songs are mostly categorized as pop and R&B.
    While some music critics praised Knowles’ country tracks, other fans of the genre refrained from a warm welcome.
    Two days after the release of “Texas Hold ‘Em” — coined as a “pop-country” track with elements from folk musician Rhiannon Giddens on the banjo — pop radio stations played the track 49 times, according to an X post by the radio industry tracker U.S. Radio Updater. But country stations played it only twice, according to the post.
    Beyoncé fans — collectively known as the “BeyHive” — called in to an Oklahoma country station protesting the broadcaster’s initial rejection of a request to play “Texas Hold ‘Em.” In a separate occasion, a fan reported hearing a radio host comment that while the song is country and the instruments are country, “something else about it makes me think it’s not country.”
    Of the more than 2,100 artists played on country radio stations from 2002 to 2020, only about 1.5% were Black, compared with about 98% who were white, according to a report from SongData on representation in country music. Other artists of color, including those who identified as Hispanic, Indigenous, biracial or Filipino, made up about 1% of artists played.  
    Beyond just radio, Black artists and artists of color represented less than 4% of country songs played on the radio, airplay, charting songs, artists signed to major labels and award nominations, according to SongData.
    In the areas where artists of color did make strides over those two decades — gaining 3.2 percentage points in the share of songs played — the advances overwhelmingly benefited male artists of color, according to SongData. Among the artists of color whose songs received airplay, the report found that less than 3% were songs by women. 
    Some observers have argued the resistance to Knowles’ recent music stems from racism and political bias.
    “Artists of color are releasing great music that sparks a great conversation but hasn’t shifted the underlying limitations and racist format of the mainstream country radio,” said Jocelyn Neal, professor and department chair of music at the University of North Carolina-Chapel Hill.
    Country artists such as Maren Morris, Luke Combs and Kacey Musgraves have taken a more progressive approach than the traditional themes of beer, pickup trucks and rural living. Black LGBTQ hip-hop artist Lil Nas X dabbled in the genre with a “country-influenced” track, “Old Town Road.” The song was enmeshed in a racial debate after being removed from the Billboard Hot Country chart in 2019 after it was claimed the song lacked country elements when compared to other songs from the chart.

    Lil Nas X performs onstage during WiLD 94.9’s FM’s Jingle Ball 2019 at The Masonic Auditorium on December 08, 2019 in San Francisco, California.
    Tim Mosenfelder

    Political tensions have flared in the country music industry for decades, as newer and more liberal artists try to transition away from the genre’s “conservative” roots, Neal said. The genre’s fan base has long skewed conservative, she said.
    Knowles — along with superstar Taylor Swift, who both had mega years in 2023 — received a higher percentage of negative ratings from registered Republicans than any other demographic of voters, across political affiliation, race and age, according to an NBC News poll. Of voters polled, 34% had a negative stance on Knowles, while 16% had a positive view. More than 40% of Republicans were neutral. Among registered Democrats who were polled, just 5% had a negative stance on Knowles and more than half had a positive view.
    Beyoncé previously drew heat from country fans after the Houston native’s 2016 live performance of “Daddy Lessons” at the CMA Awards. She was joined by female country power group The Chicks, who made headlines in the early 2000s for speaking out against then-Republican President George Bush and the U.S. invasion of Iraq.

    Younger listeners feeling the western vibe

    As Beyoncé helps break the country mold, she’s inviting a younger audience into the western genre.
    One such fan, Tenley Patterson, 26, said she didn’t bother listening to country music before Beyoncé’s releases, but was impressed with the country tracks.
    “It’s not like country music I’ve heard before; it has a twang to it,” Patterson said. “It’s been slowly peaking my interest in the genre.”
    While the average country music listener is a member of the baby boomer generation, those born between 1946 and 1964, according to music data firm Luminate, there’s been a newfound interest among listeners who are part of Generation Z — those born between 1997 to 2012 — and millennials, two generations reported to be more diverse than older age groups.
    Country music in general saw an increase of 20 billion streams, a 24% year-over-year spike, from 2022 to 2023, according to Luminate.
    Spotify’s Nashville team, which monitors the music streaming giant’s country genre, said it saw a rise in Gen Z and millennial listeners in response to Knowles’ entrance. Rachel Whitney, head of editorial for the Nashville team, said playlists outside of the country genre are playing Knowles’ country tracks, broadening its reach.
    The Beyoncé draw is also boosting exposure for other artists on some lists, like Lainey Wilson and Cody Johnson, who have more “traditional” country songs, Whitney said.
    “It’s amazing to see how country is connecting with younger listeners,” Whitney said. “We can support that with our playlists and make sure we’re not making country this one specific sound.”

    (L-R) Beyoncé and Jay-Z attend the 66th GRAMMY Awards at Crypto.com Arena on February 04, 2024 in Los Angeles, California. (Photo by Kevin Mazur/Getty Images for The Recording Academy)
    Kevin Mazur | Getty Images

    Aside from Knowles, pop stars including Lana Del Rey and Post Malone are reportedly preparing to release country albums, according to Billboard. The news source says Ed Sheeran also could be releasing a country project in the near term. 
    UNC’s Neal, herself a Beyoncé fan, described the star’s career path as trailblazing, but said the push for diversity in country music requires more than one superstar.
    “Historical evidence suggests it takes more than one successful artist to move the needle on what is honestly 100 years of genre formation,” Neal said. More

  • 250 Shares159 Views

    in Business

    Weight loss drug Wegovy is now approved for heart health — but that won’t mean broad insurance coverage just yet

    The blockbuster weight loss drug Wegovy is now approved in the U.S. for heart health. 
    But some health plans and employers are still reluctant to cover Wegovy due to its hefty price tag, which they say could significantly strain their budgets.
    Plans are likely to take notice of Wegovy’s new approval and start considering whether to cover the treatment when they next update their formularies.

    Victoria Klesty | Reuters

    In the U.S., Wegovy is no longer just for weight loss.
    The blockbuster drug — one of a handful of weight loss treatments to skyrocket in popularity over the last year — is now approved in the U.S. for heart health, too. But that may not translate to wider insurance coverage of the weekly injection drug from Novo Nordisk and similar obesity treatments just yet.

    Some employers and other health plans are still reluctant to cover Wegovy due to its hefty $1,350 monthly price tag, which they say could significantly strain their budgets. They also have other questions, such as how long patients actually stay on the treatment. 
    At the very least, some plans will take notice of Wegovy’s new approval and start assessing whether to cover the treatment when they next update their formularies, some insurance industry experts told CNBC. That could mean difficult decisions ahead for insurers and likely a patchwork system of coverage for Americans who are seeking treatment to navigate.
    “The more benefits that come from weight loss drugs, I think the greater the pressure is going to be to start including those drugs in a formulary and cover them in standard insurance plans,” said John Crable, senior vice president of Corporate Synergies, a national insurance and employee benefits brokerage and consultancy. “But my gut tells me it’s going to take more to convince some insurers.”
    Wegovy is part of a class of drugs called GLP-1s, which mimic a hormone produced in the gut to suppress a person’s appetite and help regulate blood sugar. Coverage for those treatments when used for weight loss is a mixed bag. 
    Roughly 110 million American adults are living with obesity and approximately 50 million of them have insurance coverage for weight loss drugs, a spokesperson for Novo Nordisk said in a statement. The company is actively working with private insurers and employers to encourage broader coverage of those drugs, and is advocating for the federal Medicare program to start covering them, the spokesperson added.

    The Centers for Medicare and Medicaid Services is reviewing the FDA’s expanded approval of Wegovy and will share additional information as appropriate, an agency spokesperson said in an email.
    The spokesperson added that state Medicaid programs would be required to cover Wegovy for its new cardiovascular use. By law, Medicaid must cover nearly all FDA-approved medications, but weight loss treatments are among a small group of drugs that can be excluded from coverage. Around one in five state Medicaid programs currently cover GLP-1 drugs for weight loss.
    Some of the nation’s largest insurers, such as CVS Health’s Aetna, cover those treatments.
    But many employers don’t. An October survey of more than 200 companies by the International Foundation of Employee Benefit Plans, or IFEBP, found only 27% provided coverage for GLP-1s for weight loss, compared with the 76% that covered those drugs for diabetes. Notably, 13% of employers indicated they were considering coverage for weight loss.

    Downstream health effects

    The Food and Drug Administration approved Wegovy for weight management in 2021. In a landmark decision earlier this month, the agency expanded that approval after Wegovy was found to cut the risk of serious cardiovascular complications in adults with obesity and heart disease.
    The decision was based on a five-year, late-stage trial, which showed that weekly injections of Wegovy slashed the overall risk of heart attack, stroke and cardiovascular death by 20%. 
    The approval demonstrates the significant downstream health benefits of Wegovy — and potentially similar drugs — for severe conditions caused by excess weight. Obesity increases the risk of several conditions, such as diabetes, heart disease and even some cancers. 
    It also challenges what some health experts call an “outdated” narrative driving hesitancy among some insurers: that weight loss treatments offer only a cosmetic rather than a medical benefit. 
    “We haven’t previously seen any anti-obesity medication decrease the risk of heart attack and stroke,” said Dr. Jaime Almandoz, a weight management and metabolism specialist at the University of Texas Southwestern Medical Center in Dallas. “What we have is proof that treating obesity is essentially life-saving, and I think it really shifts the conversation.” 

    An obesity patient takes a injection of weight loss medication.
    Joe Buglewicz | The Washington Post | Getty Images

    Some health experts argue that covering Wegovy and other GLP-1s for weight loss could reduce a plan’s health-care costs down the line and improve future health outcomes for patients. 
    Shawn Gremminger, the president and CEO of the National Alliance of Healthcare Purchaser Coalitions, said employers would be “well disposed to cover” those drugs if they are effective at lowering long-term costs. Members of that group represent private, public, nonprofit and union and Taft-Hartley organizations that spend over $400 billion annually on health-care.
    But he said that it will likely take years before employers have access to concrete data on the potential cost savings of covering those treatments. 
    Gremminger added that employers are “a little bit less focused” on what covering weight loss drugs will mean for overall health-care spending 10 years from now. Their focus is on providing care to their current employees, some of whom will end up leaving the company down the line. 
    Employers have other questions, too, including about longer-term data on GLP-1s for weight loss, and about patients stopping those drugs prematurely. It also isn’t clear to some employers whether patients have to stay on Wegovy for the rest of their lives or if they can eventually taper off of it, Gremminger said.
    Obesity and heart disease are chronic diseases, which means most patients will have to keep taking Wegovy along with diet and exercise to maintain the health benefits. Novo Nordisk said, “not unexpectedly,” data from their clinical trials shows that people who took Wegovy regained weight when they went off the drug.
    “This supports the belief that obesity is a chronic disease that requires long-term management, much like high blood pressure or high cholesterol, for which most patients remain on therapy long term in order to continue to experience the benefits of their medications,” Novo Nordisk said in a statement.
    But Gremminger said the standard of care for the long-term use of weight loss drugs is “in flux.”

    Considering the costs 

    Faced with the dramatic cost of covering Wegovy and similar drugs, the state of North Carolina is paring back.
    State employees will no longer have insurance coverage for GLP-1s when used for weight loss at the beginning of next month. In January, the board of trustees for the state’s health plan voted to exclude those drugs from coverage. The plan will still cover GLP-1s for diabetes, such as Novo Nordisk’s Ozempic, along with some older obesity drugs.  
    North Carolina’s treasurer and a GOP candidate for governor, Dale Folwell, told CNBC the expanded approval of Wegovy last week doesn’t change anything.
    “We’ve never questioned the efficacy of the drug. We’ve always questioned what we’re having to pay for it,” Folwell said. “Even as the scope of the use of this drug widens, it doesn’t change the cost.” 

    North Carolina State Treasurer Dale Folwell attends the Republican Governors Association conference in Orlando, Florida, Nov. 16, 2022.
    Phelan M. Ebenhack | AP

    He said dropping weight loss drugs wasn’t a decision the board wanted to make, but it did so because the state’s plan is “under financial siege” due to Wegovy. That treatment cost the state’s health plan nearly $87 million last year, according to a state presentation from January. Overall, GLP-1 drugs for weight loss cost the plan roughly $102 million in 2023. 
    An outside consultant projected a $1.5 billion loss by 2030 if the state plan continued to pay for those treatments. North Carolina also estimated that continuing to cover GLP-1s for weight loss would double the premiums for all 482,000 active employees and dependents on the plan, even those not taking the drugs. 
    Folwell said the state has been working with Novo Nordisk and Eli Lilly, the maker of similar treatment Zepbound, to reach an agreement on costs. But he noted that the companies have rejected the state’s recommendations “at every turn.” 
    A spokesperson for Eli Lilly said the company is committed to working with health-care, government and industry partners “to help people who may benefit from Zepbound access it, but obstacles to that goal still exist.” The spokesperson added that policies around insurance have “not caught up to science.” 
    Novo Nordisk said in a statement it urges Folwell and the state health plan to “put patients first” and reconsider the decision to drop weight loss drug coverage.
    Novo Nordisk believes “denying patients insurance coverage for important and effective FDA approved treatments for obesity is irresponsible,” according to a company spokesperson, who said the company will continue to engage with state health plan officials to address any potential cost concerns.
    Both drugmakers have launched programs to help patients, with or without commercial insurance coverage, afford their weight loss treatments.
    Novo Nordisk says its savings program can help patients without insurance coverage save up to $500 per 28-day supply of Wegovy. The company also said roughly 80% of Wegovy patients in the U.S. with commercial coverage for the drug are paying $25 per month or less.

    List prices of weight loss drugs before insurance

    Wegovy from Eli Lilly: $1,059.87 per monthly package
    Zepbound from Eli Lilly: $1,059.87 per monthly package
    Saxenda from Novo Nordisk: $1,349.02 per monthly package

    Increased competition in the weight loss drug market could force the two companies to drive down the costs of their injectable treatments, said Ceci Connolly, CEO of the Alliance of Community Health Plans. The organization represents regional, community-based health plans that cover more than 18 million Americans across the U.S. 
    Health plans may also be more open to covering convenient and potentially cheaper oral versions of the drugs, which several drugmakers are racing to develop. Those cheaper options, though, are likely still years away. That includes cheaper generic versions of existing GLP-1s, along with treatments from rival drugmakers.

    Coverage with cost controls 

    More employers will likely start considering coverage of Wegovy following its expanded approval, according to Julie Stich, vice president of content at IFEBP.
    But the plans that decide to include Wegovy when they next update their formularies will likely consider implementing certain requirements to control costs. Those requirements will look different for Wegovy’s two approved uses. 
    Most employers that cover GLP-1s for weight loss already use cost controls, according to the October survey by IFEBP.
    Nearly a third of companies said they used “step therapy,” which requires their members to try other lower-cost medications or means of losing weight before using a GLP-1. Around 16% of employers used certain eligibility rules, such as requiring employees to have a certain BMI, or body-mass index, to receive coverage. 

    Fiordaliso | Moment | Getty Images

    Other employers are using financial requirements, such as annual or lifetime spending caps for the treatments. For example, the Mayo Clinic’s employee health plan added a lifetime coverage limit of $20,000 for weight loss drug prescriptions filled after Jan. 1. 
    Meanwhile some players in the insurance industry are trying to find ways to help health plans manage the costs of covering the treatments. 
    Last week, Cigna’s pharmacy benefits management unit said it will limit spending increases for GLP-1s to a maximum of 15% annually for employers and other health plans. Currently, some of the company’s clients are seeing spending for those treatments rise 40% to 50% annually. 
    If more health-care companies pursue similar efforts, their affiliated health plans could become more open to covering weight loss drugs “knowing that their risk will be limited in that way,” Stich said. More

  • 163 Shares159 Views

    in Finance

    Bitcoin shows its volatility once again, tumbling back to $67,000 in overnight decline

    It was not immediately clear what caused the drop in bitcoin, which trades 24 hours a day.
    “I think it’s a healthy move. We’re removing some of the leverage that has built up in the system,” Crypto.com CEO Kris Marszalek said on CNBC’s “Squawk Box” on Friday.
    Rapid rallies and steep drops have been a recurring feature of bitcoin’s history.

    Bitcoin offices are seen in Istanbul, Turkey, on February 28, 2024. 
    Umit Turhan Coskun | Nurphoto | Getty Images

    Bitcoin suffered a steep drop in overnight trading, showing that the world’s largest cryptocurrency hasn’t shaken its tendency for big drops despite continuing to gain acceptance within the mainstream financial world.
    Data from Coin Metrics shows bitcoin was trading above $72,000 late Thursday night before falling to about $67,000 on Friday, a decline of roughly 7%.

    Stock chart icon

    Bitcoin fell sharply overnight after trading above $72,000 on Thursday.

    It was not immediately clear what caused the drop in bitcoin, which trades 24 hours a day.
    Bitcoin is still up about 57% year to date, and the overnight drop came from near record highs. The cryptocurrency has climbed over the past few months, in part due to anticipation and then demand from the new bitcoin ETFs that launched in the U.S. in January.
    “I think it’s a healthy move. We’re removing some of the leverage that has built up in the system,” Crypto.com CEO Kris Marszalek said on CNBC’s “Squawk Box” on Friday, adding that the selling pressure was likely coming from the options market.
    Rapid rallies and steep drops have been a recurring feature of bitcoin’s history. In its previous bull market, bitcoin surged above $68,000 in November 2021 but was trading below the $20,000 mark roughly a year later.
    Crypto optimists say that the volatility of the asset class should decline as bitcoin matures. The advent of the bitcoin ETFs, which makes it easier for a wider swath of investors to gain exposure to crypto, could in theory help reduce that volatility. More

  • 213 Shares129 Views

    in Finance

    Biden’s ‘billionaire tax’ takes aim at the super-rich — but can a wealth tax work in reality?

    Calls for a wealth tax on the world’s super-rich are once again gaining attention after U.S. President Joe Biden said he would impose a new “billionaire tax” on the country’s wealthiest if reelected in November.
    Outlining his 2025 budget proposals on Monday, Biden took aim at the uber-affluent and reiterated plans for a 25% tax on Americans with a wealth of more than $100 million.

    “No billionaire should pay a lower tax rate than a teacher, a sanitation worker, a nurse,” he said Thursday.
    The plans, previously outlined in the president’s 2024 budget, reignited a decades-old debate over how best to account for the wealth of the world’s richest.
    The issue has taken on fresh significance this year, however, as governments globally look for new ways to plug dwindling public finances and tackle wealth inequality.

    This is about the wealthy contributing more … the extremely wealthy contributing more and being proud to do that.

    Phil White
    retired business owner and member of Patriotic Millionaires

    Last month, global finance ministers meeting for a G20 summit in Brazil said they were exploring plans for a global minimum tax on the world’s 3,000 billionaires to ensure the hypermobile super-rich 0.1% pay their fair share to society.
    Such ideas even have the backing of some of the world’s wealthiest. In early 2024, a growing network of so-called Patriotic Millionaires signed an open letter to world leaders, calling for higher taxes for the wealthy. Among the 260 signatories were Disney heiress Abigail Disney and “Succession” star Brian Cox.

    “This is about the wealthy contributing more to the society, the extremely wealthy contributing more and being proud to do that,” Phil White, retired business owner and Patriotic Millionaires co-signatory, told CNBC.
    But experts are divided over the effectiveness of a wealth tax, and how achievable it is in reality.

    What is a wealth tax?

    A wealth tax is a “broad-based” tax on the value of all — or most — of the assets belonging to a wealthy individual or household, such as cash, property, vehicles, jewelry and other valuable items.
    Unlike income tax, which is charged against annual earnings, and capital gains tax, which is imposed on profits accrued from the sale of an asset, a wealth tax is seen as a more holistic way of accounting for an individual’s total wealth.
    Such taxes were once prominent in Europe, though implementation dwindled at the turn of the 21st century amid questions over their efficiency and a broader shift toward lower top-end tax rates.

    Wealth taxes were once a prominent source of tax revenues in Europe, though implementation dwindled at the turn of the twenty-first century

    As of 2024, Switzerland, Norway, Spain and are among the few countries to impose some form of wealth tax. But more countries are coming around to the idea. Colombia introduced a wealth tax in 2022, and the Scottish government is among others to have touted proposals.
    According to Arun Advani, associate professor of economics at the University of Warwick, the most effective wealth tax policies are those that are targeted and specific.
    “If you want a wealth tax that’s actually going to be effective at the top end … you typically want to start at quite a high threshold,” Advani said, noting that historically abandoned policies either came in too low or allowed too many exemptions to generate sufficient tax revenues.

    A mass money exodus

    Tax specialists note, however, that even well-designed wealth tax policies can be hard to enforce in practice, with questions arising over which assets should be taxed and who should be responsible for evaluating their value.  
    Indeed, the potential for behavioral shifts is one of the top arguments leveled against wealth taxes. Critics point to the increased risk of a wealth exodus among the highly mobile super-rich, including to tax havens, which they say undermines original efforts to boost government coffers. 

    Business owners are forced to leave the country. This is a great impact for a lot of people, me as well, and it’s not sustainable.

    Tord Kolstad
    founder and CEO of T. Kolstad Eiendom

    “We certainly see individuals looking at other countries to see is, is if there was a wealth tax to be introduced would there be merit in moving?” said Christine Cairns, personal tax partner at PwC.
    In 2022, when Norway increased its wealth tax on residents with assets above 20 million Norwegian kroner ($1.8 million), many flocked to Switzerland. Entrepreneur Tord Kolstad was one of approximately 70 super-wealthy Norwegians who made the move in 2023.
    “They doubled this taxation from one day to another. This is the reason Norwegian business owners are forced to leave the country. This is a great impact for a lot of people, me as well, and it’s not sustainable in the long run,” Kolstad, founder and CEO of Norwegian property group T. Kolstad Eiendom, said.

    Data suggests that wealth tax accounts for only a very small proportion of total tax revenues in the countries where it has been applied.

    Researchers are divided on the risks of capital flight from a wealth tax, with some contending that cash outflows would be limited. But they do raise other concerns over the costs of such a policy and its ability to redistribute wealth. 
    Data suggests that a wealth tax accounts for only a very small proportion of total tax revenues in the countries where it has been applied. Often those revenues have failed to increase much over time.
    “There is more cost on the tax authority side, because they’ll definitely need to be doing additional valuations,” Advani said. “A different area of cost that you could be worried about is what does it do to, for example, incentives to invest.”

    Addressing wealth inequality

    Still, proponents argue that the revenues generated from a wealth tax could mark a major step in combatting the wealth gap.
    Global wealth inequality has risen significantly over recent years, with the richest 1% bagging two-thirds of all new wealth created since 2020, according to Oxfam. The poorest 50% of the global population now own just 2% of total net wealth, while the richest 10% hold 76%. Of that, the wealthiest 1% own around two-thirds.
    Under Biden’s proposals, a 25% tax on those with more than $100 million would raise $500 billion over 10 years to help fund benefits such as child care and paid parental leave. That would lift the average tax rate for America’s 1,000 billionaires from 8.2% and bring it in line with the 25% paid by average American workers, according to Biden.

    Read more CNBC politics coverage

    Even a 2% tax on the world’s 2,756 known billionaires could raise $250 billion per year, according to a 2023 report from the independent research lab EU Tax Observatory, which backs calls for a global wealth tax. A separate Oxfam report in 2023 suggested a 5% tax on the world’s multimillionaires and billionaires could raise $1.7 trillion annually — enough to lift 2 billion people out of poverty.
    Groups like Patriotic Millionaires say that is part of their stated aims. A 2024 poll by Patriotic Millionaires found that more than half (58%) of millionaires from G20 countries back a 2% tax on wealth over $10 million. Three-quarters (74%) said they support higher taxes on the wealthy in general.
    However, some question whether such calls could be a way for the world’s richest to safeguard against a more radical redistribution of wealth in the future.
    “There are people who are talking you know, very seriously about the idea of libertarianism and saying there is a limit on total wealth that people should be allowed to have and sort of basically 100% tax above that level,” Advani said. More