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AstraZeneca, Bristol Myers Squibb and Boehringer Ingelheim told CNBC they will agree to participate in the first round of Medicare drug price negotiations.
All three pharmaceutical companies have sued to halt the process.
AstraZeneca’s Type 2 diabetes drug Farxiga, Boehringer Ingelheim’s own diabetes drug Jardiance and Bristol Myers Squibb’s blood thinner Eliquis are among the first 10 drugs selected for price talks with Medicare.

In this photo illustration, Farxiga is made available to customers at the New City Halsted Pharmacy on August 29, 2023 in Chicago, Illinois.
Scott Olson | Getty Images

AstraZeneca, Bristol Myers Squibb and Boehringer Ingelheim on Wednesday told CNBC they will agree to participate in the first round of Medicare drug price negotiations, even after all three drugmakers sued to halt the process last month.
AstraZeneca’s Type 2 diabetes drug Farxiga, Boehringer Ingelheim’s own diabetes drug Jardiance and Bristol Myers Squibb’s blood thinner Eliquis are among the first 10 drugs selected for price talks with Medicare. The three companies appear to be the first manufacturers to indicate that they will comply with the negotiations, which seek to rein in the rising costs of prescription drugs for older Americans. 

Manufacturers of the other seven drugs selected have until Oct. 1 to sign an agreement to participate in the process. Those companies did not immediately respond to CNBC’s request for comment about their intentions.
“We remain committed to ensuring patients have access to FARXIGA and plan to participate in the process outlined by CMS to communicate the value of FARXIGA to people covered by Medicare,” AstraZeneca said in a statement to CNBC, referencing the Centers for Medicare and Medicaid Services.
Boehringer Ingelheim, which is privately held, said in a statement it is “committed to engaging in open and transparent conversations” with CMS.
A spokesperson for Bristol Myers Squibb said the company has “no choice other than to sign the ‘agreement.'”
“If we did not sign, we’d be required to pay impossibly high penalties unless we withdraw all of our medicines from Medicare and Medicaid. That is not a real choice,” the spokesperson said.

If drugmakers decline to engage in the negotiations, they could be forced to pay an excise tax of up to 95% of their medication’s U.S. sales or to pull all of their products from the Medicare and Medicaid markets, according to CMS.
Bristol Myers, AstraZeneca, Boehringer Ingelheim and other drugmakers like Johnson & Johnson and Merck have filed at least eight separate lawsuits in recent months seeking to declare the negotiations unconstitutional. Another lawsuit from the Chamber of Commerce, one of the biggest lobbying groups nationwide, is seeking a preliminary injunction, which aims to block the negotiations before Oct. 1. 
The pharmaceutical industry fiercely opposes the process because it believes it will threaten its revenue growth, profits and drug innovation. However, analysts expect minimal financial losses for companies, at least initially, since most of the drugs selected already face upcoming patent expirations that will likely weigh on revenue.
For example, Farxiga will lose its market exclusivity in 2026, which will open up the market to generic alternatives. That’s the same year renegotiated prices are set to take effect.
The Inflation Reduction Act, which narrowly passed Congress last year along party lines, empowered Medicare to negotiate drug prices for the first time in the program’s six-decade history. The law is the central pillar in the Biden administration’s efforts to control rising drug prices and was a major victory for the Democratic Party.
The administration named the first round of drugs set to face price talks last month, kicking off a lengthy negotiation process that will end in August 2024. More

Peloton and Lululemon announced a five-year strategic partnership.
Peloton will develop digital fitness content for Lululemon, while Lululemon will become Peloton’s primary athletic apparel provider.
Lululemon plans to discontinue sales of its Studio Mirror product before the end of the year.

Jen Van Santvoord rides her Peloton exercise bike at her home in San Anselmo, California.
Ezra Shaw | Getty Images

Peloton and Lululemon are joining forces.
The two companies announced a five-year partnership Wednesday that will bring Peloton’s content to Lululemon’s exercise app. Lululemon in turn will become Peloton’s primary athletic apparel partner, and a select number of Peloton’s instructors will become ambassadors for the apparel retailer.

The terms of the deal, and whether the two companies will share revenue, were not disclosed.
Peloton’s stock jumped more than 15% in extended trading on the news. Shares of Lululemon — which has a roughly $48 billion market cap compared to Peloton’s $1.7 billion — were flat in after-hours trading.
As part of the announcement, Lululemon said it plans to stop selling Mirror, which allows users to stream workout classes, by the end of the year.
The company had been exploring a sale of the product after sales had come in below expectations and Lululemon was forced to take a $443 million impairment charge related to the equipment, the company said earlier this year.
Peloton’s content will now be accessible through Mirror, it told CNBC, but the fate of the Mirror device and whether the division will be sold off remains unclear.

Meanwhile, sales for Peloton’s connected fitness products have steadily fallen from their pandemic-era highs, so the company has zeroed in on content as its primary value proposition.
Its partnership with Lululemon will mark the first time Peloton has shared that prized content with another company, aside from a smaller partnership with Delta Air Lines that offers meditation and movement classes for fliers.
Lululemon’s app has about 13 million members, nearly double Peloton’s total global member count of nearly seven million. Under the agreement with Lululemon, Peloton will not have access to the members that are consuming its content.
The news comes one day after Peloton announced co-founder and Chief Product Officer Tom Cortese is leaving the company.
In May, CNBC spoke with Cortese and Peloton’s Chief Content Officer Jennifer Cotter about the company’s rebranding strategy and if it has any plans to partner with other businesses to offer its content.
Cotter, the brains behind Peloton’s content machine, said “nothing’s ever off the table” but said “there’s no real need” for such a partnership.
Cortese, for his part, made it clear partnerships weren’t on the horizon — at least in the short term.
“That’s not going to happen,” Cortese replied.
“One thing that has worked very well for Peloton in the past and will continue to work very well for Peloton going forward is our direct relationship with our members. We’re not going to lose our direct relationship with our members,” he continued. “It’s part of how we build community and how we build our business. There is no reason for us to have an intermediary between us and our members.”
Cortese couldn’t be immediately reached for comment following news of the partnership. More

The Federal Aviation Administration closed its investigation into last year’s failed flight of a cargo mission by Jeff Bezos’ Blue Origin.
Blue Origin will not be clear to launch New Shepard until after Blue Origin implements “all corrective actions that impact public safety” and receives an updated launch license, the FAA noted.
“We’ve received the FAA’s letter and plan to fly soon,” a Blue Origin spokesperson said.

The moment of the anomaly during the New Shepard cargo mission NS-23, in which the booster’s engine failed.
Blue Origin

The Federal Aviation Administration closed its investigation into last year’s failed flight of a cargo mission by Jeff Bezos’ Blue Origin, the regulator announced Wednesday.
Blue Origin is required by the FAA to “implement 21 corrective actions,” the regulator said in a statement. The FAA noted that Blue Origin will not be clear to launch New Shepard until after Blue Origin implements “all corrective actions that impact public safety” and receives an updated launch license.

“We’ve received the FAA’s letter and plan to fly soon,” a Blue Origin spokesperson said in a statement.
The 21 required actions include the “redesign of engine and nozzle components to improve structural performance during operation as well as organizational changes.” The FAA did not comment further on specifics of the corrections.
In September 2022, the company’s New Shepard rocket was flying a cargo mission when it suffered a failure. Earlier this year, Blue Origin said the source of the issue was an overheated part in the rocket engine’s nozzle. No people were onboard, as the NS-23 mission was carrying science and research payloads.

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Blue Origin said its investigation found that NS-23 flight’s engine failure was due to “operational temperatures that exceeded the expected and analyzed values of the nozzle material.” The company recovered fragments of the BE-3PM engine’s nozzle, finding “clear evidence of thermal damage and hot streaks resulting from increased operating temperatures.”
The New Shepard rocket launches from Blue Origin’s private facility in West Texas, carrying people and payloads above 100 kilometers, or more than 340,000 feet, for a couple minutes of weightlessness. The capsule is flown autonomously, with no human pilot, and floats down with the assistance of a set of parachutes to land in the Texas desert. The New Shepard rocket booster is reusable, returning to land on a concrete pad near the launch site.

To date, Blue Origin has flown 31 people past the edge of space with New Shepard.
Blue Origin has said since March that it expects to return New Shepard to flight “soon.” The crucial re-flight of the rocket is planned to carry the same research payloads that didn’t make it to space on the NS-23 mission, without crew. More

The United Auto Workers union will announce expanded strikes at General Motors, Ford Motor and Stellantis plants if the sides don’t make significant progress in negotiations by 10 a.m. ET Friday.
The new union-imposed deadline comes a week after the UAW announced it would expand its initial Sept. 15 strikes.
The strikes currently involve about 18,300 workers, or 12.5% of the UAW’s 146,000 members whose labor contracts expired on Sept. 14.

Members of the United Auto Workers (UAW) Local 230 and their supporters walk the picket line in front of the Chrysler Corporate Parts Division in Ontario, California, on September 26, 2023, to show solidarity for the “Big Three” autoworkers currently on strike. 
Patrick T. Fallon | AFP | Getty Images

DETROIT — The United Auto Workers union will announce expanded strikes at General Motors, Ford Motor and Stellantis plants if the sides don’t make significant progress in negotiations by 10 a.m. ET Friday, according to a person familiar with the matter.
The new union-imposed deadline comes a week after the UAW announced it would expand its initial Sept. 15 strikes at assembly plants of each of the Detroit automakers to 38 additional parts and distribution locations for GM and Stellantis. The UAW did not expand its strikes at Ford, citing progress in those talks.

Like a week earlier, it’s expected that UAW President Shawn Fain will host a Facebook Live event to announce which plants will walk out at noon Friday, barring progress in the talks.
The strikes currently involve about 18,300 workers, or 12.5% of the UAW’s 146,000 members whose labor contracts expired on Sept. 14.
Fain previously said the union planned to increase the work stoppages, based on how negotiations with the companies were going. The union is calling the work stoppages “stand-up strikes,” a nod to historic “sit-down” strikes by the UAW in the 1930s.

Spokespeople for the Detroit automakers did not immediately respond for comment on Wednesday.
The additional strike plans come despite record contract offers from the automakers that include roughly 20% hourly wage increases, thousands of dollars in bonuses, retention of the union’s platinum health care and other sweetened benefits.

The union’s new deadline comes a day after President Joe Biden joined Fain and union members, becoming the first known sitting president to walk a picket line with striking autoworkers. Biden also voiced support for the union and its demands, including a 40% wage increase during the life of the contract.
The UAW has further demanded a shortened workweek, a shift back to traditional pensions, the elimination of compensation tiers and a restoration of cost-of-living adjustments, among other improvements.

Unlike past strikes, UAW leaders opted for targeted strikes at select plants instead of initiating national walkouts.
The strategy is in an effort to keep the automakers on edge in an effort to pit them against one another to achieve better contracts, according to private messages leaked last week involving UAW communications director Jonah Furman.
The messages, which described a strategy to cause “recurring reputations damage and operational chaos” for the companies, were heavily criticized by the automakers. More

Automakers and their larger Tier 1 suppliers likely have the resources to weather an extended work stoppage.
But a network of smaller auto suppliers could be hit hard by a prolonged strike or even go out of business entirely.
As of Tuesday, two Detroit-area auto suppliers had already filed notices of potential layoffs with the state of Michigan.

Members of the United Auto Workers union hold a practice picket in front of Stellantis headquarters in Auburn Hills, Michigan, on Sept. 20, 2023.
Bill Pugliano | Getty Images

As the United Auto Workers’ strike against Ford Motor, General Motors and Stellantis moves through its second week, the economic effects are beginning to ripple through the U.S. automakers’ vast supply base.
While the automakers and their larger Tier 1 suppliers likely have the resources to weather an extended work stoppage, there’s a network of smaller suppliers that could be hit hard by a prolonged strike — or even go out of business entirely.

That network includes about 5,600 companies — most in the upper Midwest — that provide seats, suspension components, wiring harnesses and thousands of other parts used in brand-name vehicles. It’s substantial, employing an estimated 871,000 workers, according to the American Automotive Policy Council.
Those smaller suppliers have only recently recovered from the shocks of the Covid-19 pandemic and the resulting global shortage of semiconductors. Now, they’re coming under pressure to increase their own workers’ wages — in an environment where higher interest rates have made it more costly to borrow money — and staring down the threat of ongoing auto workers’ strikes.

“UAW ON STRIKE” signs stand as members of the United Auto Workers Local 230 union hold a picket line outside the Stellantis Chrysler Los Angeles Parts Distribution Center in Ontario, California, on Sept. 26, 2023.
Patrick T. Fallon | AFP | Getty Images

“We represent a lot of suppliers that are very, very concerned about where this is going,” said Dennis Devaney, a Detroit attorney who has represented both GM and Ford and who once served as a board member for the National Labor Relations Board.
Devaney noted that some suppliers are still struggling with supplies of semiconductors and other components, in part because their Chinese counterparts are still recovering from Covid-related shutdowns and other logistical issues since the global health crisis.
“The last thing they need from an economic perspective is a strike by the UAW,” he said.

Some of the small suppliers may only be able to hold out a few weeks if the automaker factories they support are struck.
Harbour Results, a manufacturing advisory firm near Detroit, estimates that about 30% of those smaller suppliers were in poor financial shape — or “unbankable” in Harbour’s view — as of the end of 2022, with another 21% characterized as struggling.  
The Motor and Equipment Manufacturers Association, or MEMA, a trade group that represents auto suppliers, has asked the White House for aid, writing in a Monday letter to President Joe Biden that it was particularly concerned about smaller suppliers with annual revenues of less than $200 million.

Members of the United Auto Workers union picket outside the Michigan Assembly Plant in Wayne, Michigan, on Sept. 26, 2023.
Matthew Hatcher | AFP | Getty Images

“These suppliers are in every state throughout the U.S. and are often the largest employer in a county or region,” MEMA wrote. “In a recent industry survey, half of these suppliers were identified as financially distressed.”
MEMA asked President Biden to use existing authority to direct the Small Business Administration to provide low-interest loans to suppliers to help them meet payroll so they can restart quickly once the strike is resolved.
“Note that it only takes one component that is unavailable from a supplier to shut down an entire production line,” the association wrote. “We urge you to act now to support the vehicle supplier community.”

Supplier layoffs

In the face of prolonged strikes, some smaller suppliers are already cutting workers or announcing plans to do so.
But layoffs could expose suppliers to another risk: In a still-tight labor market, those laid-off employees might be able to find other jobs quickly, meaning they might not be available to come back once the UAW’s strikes are resolved.
LM Manufacturing, which makes seats for vehicles including the Ford Bronco, temporarily laid off about 650 workers last week in response to the UAW’s strike at the Detroit-area Ford plant that builds the Bronco. The Detroit-based company is a joint venture between privately held LAN Manufacturing and Canadian auto supplier Magna International, a Tier 1 heavyweight.

GM workers with the UAW Local 2250 Union strike outside the General Motors Wentzville Assembly Plant in Wentzville, Missouri, on Sept. 15, 2023.
Michael B. Thomas | Getty Images

As of Tuesday, two additional Detroit-area auto suppliers had already filed notices of potential layoffs with the state of Michigan.
Parts maker CIE Newcor, a subsidiary of Spain’s CIE Automotive, filed a notice with the state of Michigan on Sep. 14 saying that it will lay off nearly 300 workers early next month if the strike continues. Privately held Eagle Industries, a maker of molded foam products for autos, said on Sep. 21 that it may soon need to lay off an estimated 171 of its 230 employees “due to evolving business circumstances.”
“For every GM job, there’s six others in the economy that depend on us running,” GM CEO Mary Barra told CNBC. “We’ve got to get back to work.”

Publicly traded suppliers

Larger publicly traded suppliers such as Lear Corporation, Dana, Magna International and Adient aren’t expected to come out of the UAW’s strike unscathed. However, they haven’t experienced widespread effects just yet.   
Barclays previously identified Dana as one of the most affected suppliers from the first round of UAW strikes that halted production at one assembly plant each for the Detroit automakers, beginning Sept. 15. The Ohio-based company — a supplier of axles, driveshafts, transmissions and other parts — makes components for several vehicles affected by the strikes.
Dana, which did not respond to CNBC’s request for comment, has reportedly announced temporary layoffs of hundreds of Ohio workers due to striking UAW members at Jeep and Ford plants.
If the UAW’s strike drags on and expands further past its current three assembly plants and 38 parts and distribution centers, Wall Street analysts believe that’s when larger publicly traded suppliers will really start to feel the strain.
Some analysts also warn that automakers may put additional pressure on suppliers to lower costs in an effort to offset expected multibillion-dollar increases in any tentative agreements reached by GM, Ford and Stellantis, also known as original equipment suppliers, or OEMs.
“This creates another tension point in the debate in OEM-supplier commercial discussions,” Barclays analyst Dan Levy told CNBC. “There’s some suppliers that probably legitimately can push back but there’s also probably some suppliers where it does create a little more complexity.”
Historically, automakers have raised prices on new vehicles to offset higher labor costs and protect margins, but inflation as well as higher commodity costs have already pushed vehicle prices up, leaving little room for upward movement.
Barclays expects the new UAW contracts to add between $2 billion and $3 billion of incremental costs annually to the automakers’ balance sheets.
Spokespeople with Lear, Magna and Adient did not immediately respond to CNBC’s request for comment. More

Orange juice future prices hit a record high of $3.69 per pound Tuesday morning.
The surge was triggered by hurricanes and bad weather reducing Florida’s crop to its lowest in nearly 80 years.

Coca-Cola Co.’s Minute Maid and Simply Orange brand orange juices sit on display in a supermarket in Princeton, Illinois.
Daniel Acker | Bloomberg | Getty Images

Orange juice is the latest item to succumb to higher prices at the grocery store, with futures on the commodity good reaching an all-time high this week.
Future prices for the breakfast staple have been steadily climbing over the past few months, hitting a record high of $3.69 per pound Tuesday morning. That number is up 13% month to date and almost 78% year to date.

With the price hike, the juice joins other major grocery store items facing high prices even as inflation slows, including raw sugar and cocoa.
The drink’s price has shot up due to hurricanes and bad weather that slammed Florida — the main producer of orange juice for the U.S. — last year, which reduced the crop to its lowest level in nearly 80 years. A late freeze at the end of last year also devastated the crops.
In July, the U.S. Department of Agriculture said it expected Florida to produce just around 15.9 million boxes of oranges this year, down 70% from the 2020-21 season.
Other exporters such as Brazil and Mexico also lowered their estimated yields for the year, citing crop difficulties from warmer weather. More

U.S. health care providers wrote more than nine million prescriptions for Ozempic, Wegovy and similar and obesity drugs during the last three months of 2022, according to a new analysis.
The report also shows that prescription volumes for those drugs increased 300% between early 2020 and the end of last year.
The data further confirms the rise in demand for GLP-1s, which have fueled a frenzy for their ability to cause significant weight loss.

A pharmacist displays boxes of Ozempic, a semaglutide injection drug used for treating type 2 diabetes made by Novo Nordisk, at Rock Canyon Pharmacy in Provo, Utah, U.S. March 29, 2023. 
George Frey | Reuters

U.S. health care providers wrote more than nine million prescriptions for Ozempic, Wegovy and similar diabetes and obesity drugs during the last three months of 2022, according to a new analysis released Wednesday.
The report, from analytics firm Trilliant Health, shows that quarterly prescriptions for those drugs increased 300% between early 2020 and the end of last year.

Novo Nordisk’s weekly diabetes injection Ozempic accounted for more than 65% of total prescriptions as of the end of 2022, and was primarily prescribed off-label for its ability to help patients lose weight. 
The data further confirms the rise in demand for that group of drugs, which have fueled a frenzy among Americans and on Wall Street for their ability to cause significant weight loss. Those treatments, known as GLP-1s, mimic a hormone in the gut to suppress a person’s appetite. 
But the rate of future prescription volumes will largely depend on whether manufacturers of those drugs, Novo Nordisk and Eli Lilly, can resolve widespread supply shortages affecting most of their treatments in the U.S., among other factors, according to the report.
The analysis is based on insurance claims data for about 300 million Americans. Among the other drugs prescribed are Eli Lilly’s diabetes drug Mounjaro and an older GLP-1 drug from Novo Nordisk called Saxenda, which isn’t as effective for weight loss as Ozempic and Wegovy.
But the total number of GLP-1 prescriptions is likely an undercount since some health plans don’t cover weight loss treatments like Wegovy, leaving some patients to pay for them out of pocket. 

Some people, such as Hollywood celebrities and billionaire tech mogul Elon Musk, are wealthy enough to pay for the drugs themselves. 
Ozempic’s list price tops $935 per monthly package, and its weight loss counterpart Wegovy is about $1,300. The drugs are meant to be taken indefinitely to keep weight off, just like cholesterol-lowering drugs or blood pressure medications that have to be taken for life. 
Other drugmakers are jockeying to capitalize on the budding weight loss industry. And analysts say Eli Lilly’s Mounjaro has the potential to overtake drugs from Novo Nordisk after its approved in the U.S. for weight loss. 
More than two in five adults have obesity, according to the National Institutes of Health. About 1 in 11 adults have severe obesity. More

A new bill aimed at establishing a safe harbor for financial institutions serving legal marijuana businesses is expected to advance to the Senate floor Wednesday.
The Secure and Fair Enforcement Regulation Banking Act was introduced by a bipartisan group of senators last week.
If passed, the bill will pave the way for the sector to secure greater financing and scale into a broader market.

Activists from the DC Marijuana Justice (DCJM) wave flags during a rally to demand Congress to pass cannabis reform legislation on the East Lawn of the US Capitol in Washington, DC on October 8, 2019
Olivier Douliery | AFP | Getty Images

A new bill that aims to give the marijuana industry access to banking services is expected to move forward in the Senate on Wednesday.
The Secure and Fair Enforcement Regulation Banking Act was introduced by a bipartisan group of senators last week. The bill would provide legal protection to banks or other financial institutions that offer services to state-legal marijuana businesses.

The Senate Banking Committee will mark up the bill Wednesday, and the panel is expected to vote to advance it to the full chamber’s floor.
The bill is being led by Sens. Jeff Merkley, D-Ore.; Steve Daines, R-Mont.; Kyrsten Sinema, I-Ariz.; and Cynthia Lummis, R-Wyo., as well as Majority Leader Chuck Schumer, D-N.Y.

Senator Jeff Merkley, a Democrat from Oregon, speaks during a news conference at the U.S. Capitol in Washington, D.C., on Jan. 25, 2020.
Zach Gibson | Bloomberg | Getty Images

“This legislation will help make our communities and small businesses safer by giving legal cannabis businesses access to traditional financial institutions, including bank accounts and small business loans,” the senators said in a joint statement.
“It also prevents federal bank regulators from ordering a bank or credit union to close an account based on reputational risk,” they added.
Even as 39 states have legalized marijuana for recreational or medical use, the sector has struggled to scale. Marijuana’s classification as a Schedule I substance, or one with no currently accepted medical use and a high potential for abuse, along with federal prohibition, pose a risk to banking institutions. This, in turn, has limited access to financing and a broader market.

Moreover, without access to financial services, state-legal cannabis businesses are forced to operate their businesses solely using cash, which can result in robbery, money laundering and organized crime.
Due to the opening of new adult-use markets in individual states, combined U.S. medical and recreational cannabis sales are expected to reach $33.6 billion by the end of 2023, according to analysis from the MJBiz Factbook from industry news outlet MJBizDaily.
The landmark vote Wednesday will mark the first time the Senate has considered the legislation. An earlier version of the bill, the SAFE Banking Act, passed in the House seven times previously but has never advanced through the Senate under both Democratic and Republican control. Late last year, lawmakers excluded it from a $1.7 trillion government funding bill.
The bill may face a tougher path to passage if it ends up before the GOP-controlled House.
“I think it probably passes the banking committee, but I think it doesn’t go anywhere in the House,” said Ian Katz, an analyst with Capital Alpha Partners who covers banking and financials.
“Republicans seem to be souring on it,” he added.
The new bill includes stricter requirements for federal regulators, such as prohibiting them from terminating any marijuana-related accounts without “valid reason,” or from denying banking services based on “personal beliefs or political motivations.” More