Pepsi, Coke soda pricing targeted in new federal probe

Beverage giants Coca-Cola and PepsiCo are under preliminary investigation at the Federal Trade Commission over potential price discrimination in the soft drink market as the agency looks to revive a decades-old, but largely dormant law banning the practice, according to four people with knowledge of the probe.

The companies’ pricing strategies are being scrutinized under an obscure law known as the Robinson-Patman Act, the people said. The law prohibits suppliers from offering better prices to large retailers at the expense of their smaller competitors. The largely dormant 1936 law is aimed at promoting a level playing field between small retailers and large chain stores.

For at least the last month the FTC has reached out to large retailers, including Walmart, seeking data and other information on how they purchase and price soft drinks, two of the people said. Walmart is not currently a target in the investigation, one of the people said.

The new investigation is the latest sign that the Biden administration is expanding its efforts to rein in big companies and flex its antitrust muscles, and not just in the technology world. Under Lina Khan, the FTC has reached deep into the antitrust playbook, dusting off long quiescent laws in the hopes of curtailing the growth of the world’s biggest firms, from relative newcomers like Apple and Google, and now to more traditional Fortune 500 stalwarts like Pepsi and Coke.

The Robinson-Patman Act was enforced regularly for decades by the FTC then all but abandoned more than 20 years ago. The agency’s last case under the law was a settlement with spice company McCormick. Prior to that its most recent case was from 1988 against book publishers including Simon & Schuster and Random House. The move away from Robinson-Patman enforcement came amid increasing focus at the FTC and Justice Department on harm to consumers, namely higher prices, rather than harm to competitors. 

The investigation is in the early stages, said the people, who were granted anonymity to discuss a confidential matter.

A FTC spokesperson declined to comment. Spokespeople for Coca-Cola, Pepsi and Walmart did not immediately respond for comment.

Coca-Cola is the largest U.S. soda company with more than 46 percent of the market in 2021, followed by Pepsi with a 26 percent share.

The FTC’s newest commissioner Alvaro Bedoya has made reinvigorating Robinson-Patman a top priority for his tenure at the agency. The FTC never formally abandoned the law, though in a 1977 report the Justice Department said it would cease Robinson-Patman enforcement. Bedoya has publicly criticized a lack of enforcement, blaming it for a steep increase in prices offered by small businesses across the economy, arguing big retailers can use economies of scale to keep their prices down and undercut smaller operations.

To reinvigorate the law, the FTC not only “must find a good test case, but it has to restore its skills and expertise in conducting Robinson-Patman Act investigations,” said Bill Kovacic, a former commissioner and chairman of the agency, who now teaches antitrust law at George Washington University. “Compared to other things we were pressed to do, it was a decidedly lessor priority,” Kovacic said of his tenure at the agency.

FTC Chair Lina Khan has also called for a Robinson-Patman revival both in her academic writing as well as in her current position. In a July 2022 bipartisan policy statement the FTC commissioners unanimously said the agency could use the law to target illegal prescription drug rebates that block patient access to lower-priced alternatives.

Critics of the law however say it actually has the opposite of its intended effect, and while it would boost small businesses, it would also raise prices at the largest chains, thereby harming consumers.

“Bringing more Robinson-Patman Act cases would raise prices for the lowest income consumers,” said Alden Abbott, a former FTC general counsel during the Trump Administration, who is now a senior research fellow at George Mason University’s Mercatus Center. Abbott said it is a “special interest law” designed to prop up small businesses.

But at an event late last year, Bedoya drew a straight line between a lack of Robinson-Patman enforcement and high food prices in rural areas, including on Native American reservations. “The idea that low prices at the big box store help everybody isn’t true in Pine Ridge [South Dakota], where 90 percent of folks don’t have cars,” he said of the 180-mile round trip journey to the nearest large grocery store. “I think there’s a line you can draw from that law lying fallow, to people in Pine Ridge not being able to buy fruit for their kids because the prices have gone through the roof.”

Targetingsoda pricing could be a good test case for the FTC given the uniformity of the product. But it could present some messaging challenges for the agency, given the health problems linked to sugary drinks.

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Negotiations resume with New York City nurses union as thousands go on strike

NEW YORK — Negotiations restarted Monday afternoon between the New York Nurses Association and Montefiore Medical Center several hours after more than 7,000 of the union’s nurses kicked off a strike at three Montefiore hospital campuses and the Mount Sinai Hospital in Manhattan.

A Mount Sinai spokesperson, meanwhile, said hospital management has not returned to the bargaining table since union negotiators walked out on them about 1 a.m. Monday. The strike left critical services in peril and led nurses to hit the streets to protest what they said have been years of low pay and neglect, which are issues that have been exacerbated during the Covid-19 pandemic.

"The nurses are heartbroken to have to be out here today on the street," Pat Kane, the union's executive director, said during a press conference outside Mount Sinai.

How long the strike will last is uncertain. Montefiore’s most recent offer to the union included a 19.1 percent compounded raise over the contract’s three-year term and the addition of 115 emergency department nurses, 11 labor and delivery nurses and 23 nurse practitioners, who have advanced nursing degrees and a broader scope of responsibilities than registered nurses.

But Nancy Hagans, the union's president, said it continues to demand improved nurse-to-patient ratios and had not been swayed by the offer of additional nurses because Montefiore already has some 700 nursing vacancies.

In an emailed letter to Montefiore staff Monday, president and CEO Philip Ozuah said he had directed the hospital’s negotiating team to continue to engage with the union.

“Despite a very generous offer from Montefiore — an offer that exceeded the terms already agreed to at the wealthiest of our peer institutions — NYSNA’s leadership decided to walk away from the bedsides of our patients,” Ozuah wrote. “In my opinion, this action was totally unnecessary, especially given how close we already were to a final agreement.”

The strike’s start Monday morning capped off months of negotiations between nurses and 12 private hospitals across New York City to secure the union’s first new contracts since before the pandemic. The hospitals’ contracts with the union expired at the end of 2022.

The union has reached contract agreements at seven of the hospitals and is still bargaining at three others. Nurses at Wyckoff Heights Medical Center in Brooklyn, one of the three, plan to strike starting Jan. 17 if they do not agree on a contract before then.

The New York City Office of Emergency Management opened an interagency situation room Monday to monitor hospital operations and handle any hospitals' requests that ambulances be diverted away from their emergency rooms.

A spokesperson for the Fire Department said supervisory units of emergency medical workers in the Bronx and Manhattan are carrying additional supplies so they can restock ambulances in the field, increasing ambulance availability for calls.

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Everyone saw Brazil violence coming. Except social media giants.

Silicon Valley’s biggest names have again been caught asleep at the wheel as far-right protestors storm a country’s government buildings.

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GOP prepares to battle itself over defense spending

Less than two weeks after cementing another major increase to the Pentagon budget, lawmakers are now talking about going the opposite direction — and are even raising the specter of across-the-board cuts that rocked the establishment just over a decade ago.

An emerging deal between Speaker Kevin McCarthy and conservatives who initially opposed his bid for the gavel looks to exact deep spending cuts. This comes amid a looming partisan fight over the debt limit, compounding fears that overall spending is poised for a return to automatic reductions known as sequestration.

Among the concessions McCarthy made to secure the speakership was a vote on a budget framework that caps discretionary spending at fiscal 2022 levels and aims to balance the federal budget in a decade.

The nascent pact does not make a specific commitment on defense spending. Many Republicans have sought to quash chatter of Pentagon cuts, noting they could instead look to make reductions from the non-military side of the ledger. But if the Pentagon is not spared, reverting to last year’s budget levels would amount to a roughly 10 percent cut, wiping out a $75 billion increase enacted last month.

“Seems like we could be backing ourselves into sequestration,” warned Rep. Mike Waltz (R-Fla.), an Army veteran and Armed Services Committee member, on a Friday conference call with McCarthy and allies, POLITICO reported.

Incoming Armed Services Chair Mike Rogers (R-Ala.), who harshly criticized the party’s conservative wing during the chaos over the speaker’s gavel, said he’s “not worried” about the deal affecting defense. Incoming Appropriations Chair Kay Granger (R-Texas) and Rep. Ken Calvert (R-Calif.), who is set to chair the top defense spending panel, also support additional Pentagon funding.

Arnold Punaro, a former top staffer on the Senate Armed Services Committee, said he is "not nearly as sanguine" that the Pentagon will end the year unscathed as some who’ve downplayed it.

"I remind people the last time we had a Republican House and Democratic president and a debt ceiling and spending confrontation we got the [Budget Control Act] and the sequester," Punaro said.

A deal to vote on spending cuts isn’t part of a rules package governing the House that lawmakers will vote on when they return Monday. Yet defense spending will be part of the calculus for some Republicans.

Texas Republican Tony Gonzales plans to oppose the rules package in part because of his concerns about national security spending.

"This has a proposed billions of dollar cut to defense, which I think is a horrible idea when you have [an] aggressive Russia in Ukraine, you have a growing threat of China in the Pacific," Gonzales said Sunday on CBS's "Face the Nation." "How am I going to look at our allies in the eye and say, 'I need you to increase your defense budget,' but yet America is going to decrease ours?"

Defense hawks are eyeing another real increase this year of up to 5 percent to meet threats posed by Russia and China and to mitigate high inflation. And supporters of increased defense spending are now warning up front that they outnumber the budget hardliners in the GOP conference.

“There's a ton of defense hawks that are necessary to get to the math of 218,” Rep. Mike Gallagher (R-Wis.), a member of the Armed Services Committee, told POLITICO.

Fellow Armed Services Republican Don Bacon of Nebraska piled on, cautioning, "Most of us won't vote for cuts to defense.”

Another Republican, Rep. Nancy Mace of South Carolina, told CBS she was “on the fence” on the rules package, citing concerns about the handshake agreements struck with conservatives and the potential for shrinking military spending.

"I don't want to see defense cuts," Mace said. “We don't know what deals were made, and that's something that we should be transparent about."

Some conservatives who pressed for a pact on reducing spending attempted to tamp down talk of Pentagon cuts in the wake of the negotiations over the speaker’s gavel.

The office of Rep. Chip Roy (R-Texas), one of the conservative holdouts who cut a deal to support McCarthy and is a military spending skeptic, downplayed the possibility of defense cuts as spin by "big spending neocons & the military industrial complex."

"[D]uring negotiations, cuts to defense were NEVER DISCUSSED," Roy's office wrote on Twitter. "In fact, there was broad agreement spending cuts should focus on NON-DEFENSE discretionary spending. This means cutting funding for the woke & weaponized bureaucrats that received massive increases under the $1.7 trillion omnibus."

Even if defense becomes a target for fiscal hardliners, McCarthy can't guarantee cuts. Gutting the domestic funding for this fiscal year that House Democrats enacted on their way out of power will almost certainly be rejected by the Senate, which remains in Democratic hands, and President Joe Biden.

"I think it would pass the House. I doubt it would pass the Senate,” Gallagher said of bills that reduce domestic spending. “But therein lies the rub of everything we do when it comes to government spending."

If Republicans’ fiscal hard line doesn’t result in reduced spending, the gridlock will likely force Congress to put spending on autopilot. Funding programs through temporary continuing resolutions, which carry over the previous year’s levels and block new programs from getting started, is a long-running complaint of Pentagon brass.

"This backroom deal not only contradicts Republican calls for transparency, but it also kills the 2024 government funding process before it has even started, all but guaranteeing a shutdown," chided Rep. Rosa DeLauro, the top Democrat on the House Appropriations Committee.

Roman Schweizer, an analyst with investment firm Cowen, is skeptical cuts will come to fruition but said in a Friday note to investors that spending debates in the divided Congress will still be "a mess."

"Everyone expects gridlock between Republicans and Democrats for the next two years. Some may prefer it," Schweizer wrote. "What we're seeing now is gridlock between GOPers."

There’s still a faction of conservatives that’s unconvinced the Pentagon should get a pass.

“Everything has to be on the table,” said GOP Rep. Jim Jordan of Ohio, a co-founder of the House Freedom Caucus, on “Fox News Sunday.”

"Frankly, we'd better look at that money we send to Ukraine as well and say how can we best best spend the money to protect America,” he added. “I think that's what the people elected us to do. That's what we're going to do."

Fiscal hardliners may even find common ground with progressives who’ve long sought to restrain defense spending, though they’ve had little success because most Democrats and Republicans still back a larger Pentagon budget. And progressives would almost certainly reject cuts to domestic spending or holding the federal borrowing limit hostage.

"There are places I may actually agree with Republicans on defense cuts. I think it is absurd we are going to have almost a trillion dollar defense budget,” progressive Rep. Ro Khanna (D-Calif.) told “Fox New Sunday.” “And if they're going to look at that and make certain cuts, then let's have that conversation."

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Colorado governor pledges to end chartered migrant buses bound for Chicago, New York

NEW YORK — Colorado Governor Jared Polis announced over the weekend his state would no longer charter buses of migrants to New York City and Chicago, a process that had irked the mayors of both cities and led to a public war of words among the three Democrats last week.

On Saturday, Polis told Chicago Mayor Lori Lightfoot there were no more buses for migrants scheduled to arrive in her city from Denver, and informed New York City Mayor Eric Adams that the last bus of asylum seekers would arrive Sunday, according to a statement released by his office.

“People fleeing violence and oppression in search of a better life for themselves and their families deserve our respect not political games and we are grateful we have been able to assist migrants to reach their final destination,” Polis said in the statement. “We refuse to keep people against their will if they desire to travel elsewhere.”

In an interview with POLITICO last week, Polis said that Denver had seen a backlog of asylum seekers who had arrived from the southern border and became stranded in the Mile High City during last month’s historic winter storm. While he said that Colorado had been assisting migrants with travel to their final destinations for weeks prior, the flow of asylum seekers spiked as the backlog was being cleared. Saturday’s statement suggests the state began to charter entire buses of asylum seekers bound for Chicago and New York to alleviate the pressure.

The conversation between Polis and the two mayors came on the same day that Lightfoot and Adams sent a letter demanding the Colorado Democrat halt the flow of travelers out of Denver.

“You must stop busing migrants to Chicago and New York City,” the mayors wrote. “In the case of family reunification, let us work together to ensure that people are reconnected with their loved ones, however sending migrants to our cities whose systems are over capacity, where they may struggle to find shelter and other services is wrong and further victimizes these most vulnerable individuals.”

Both mayors have said that social safety nets in their cities are at capacity, and spent last week criticizing Polis' actions. New York City, for example, has seen an influx of more than 36,000 migrants.

While Polis pledged to stop the chartered buses, his spokesperson said they would continue to help asylum seekers on an individual basis should they want to reach cities beyond Denver.

"We will not prevent anyone who wants to leave from going to their preferred destination," spokesperson Conor Cahill said in a statement Monday. "The travel backlog from the holiday season and winter storms have cleared, and Denver and the state will now resume normal assistance for migrants."

While representatives for Lightfoot did not immediately comment, a spokesperson for Adams said that the end of the charter buses was welcome news.

“While we are pleased that Colorado has stopped the chartering of buses to New York City, we are hopeful that any city or state feeling the impacts of this humanitarian crisis will partner with us and others to advocate for the federal government to come up with a national solution to the challenge surrounding asylum seekers,” Fabien Levy said in a statement.

All three Democrats have called for more resources from the federal government to help them deal with the influx.

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The fight over how to deliver bad news to patients

Congress was full of good intentions when it directed the Department of Health and Human Services to make sure patients get their test results as soon as they’re available.

But the implementation of that directive has set off a battle between doctors on one side and HHS and patient advocates on the other, and raised a fundamental question: How should patients get bad news? The debate underscores how medicine's digital transformation is changing the doctor-patient relationship and upending ingrained practices.

Doctors say that patients are now receiving news about potentially terminal disease, or other, less catastrophic but confusing, test results from patient portals before they have a chance to explain them. The American Medical Association is pressing the department to revise its rules, and the trade group for physicians is finding allies in state legislatures. But patient advocates, and HHS, say patients should, and can, decide when they want their results.

The doctors say they know how their patients feel. Patients “are extremely angry and have had harms they're reporting from getting instant access,” AMA President Jack Resneck said. “We're seeing a parent who finds out at nine o'clock on a Friday night when they can't reach anybody that their child's leukemia has recurred.”

The AMA and other groups representing physicians want HHS to allow them to delay the release of test results so they can talk patients through them. Concerned doctors have convinced legislatures in at least two states to weigh in on their behalf.

But patient advocates and HHS’s Office of the National Coordinator for Health IT, or ONC — which wrote the regulations — think such exceptions could do more harm than good.

“That test result may be what someone needs in order to search for a clinical trial, an emergency second opinion, for a Social Security disability application or to connect with necessary community supports,” said Grace Cordovano, a board-certified patient advocate.

Elise Sweeney Anthony, executive director of policy at ONC, wrote in a post to the agency’s web site that finding out she had breast cancer before talking with her doctor better prepared her for follow-up care. The early access allowed her to learn more about the specific cancer and talk to a friend who had also had breast cancer to prepare for a more productive doctor's appointment, she wrote.

“My journey was eased by a care team that embraced health information technology and shared decision making,” she wrote. “The fact that my care team supported my choice to receive my lab results in that way was invaluable.”

A mandate from Congress

Congress ordered HHS to bar health care organizations from hoarding patient data in a 2016 law, the 21st Century Cures Act.

Congress directed HHS to prevent providers, health IT developers and health information exchanges and networks from blocking the flow of health data to consumers. Congress was motivated to act by concerns that electronic health records vendors and providers were making it more difficult to release patient health information to stifle competition.

The goal of the regulations was to promote health data-sharing and patient access.

HHS first proposed the rule in 2019, but then put it on hold when the coronavirus arrived in 2020. The regulation went into effect in a more limited scope that included test results in April 2021 and expanded to include the full definition of electronic health information in October.

Just before, the AMA, the American Hospital Association, the College of Healthcare Information Management Executives and other groups asked unsuccessfully for a further delay, arguing that providers’ technical systems weren't yet ready, and that vendor and provider deadlines weren't aligned.

HHS did provide an exception that allows doctors to withhold patient information if divulging it could harm the patient.

But the exception is too narrow, according to the AMA, which wants HHS to make clear that doctors may hold back information if releasing it immediately would cause “mental or emotional harm.”

“We're just asking for a little flexibility for a few hours or a few days when there's bad news to be able to deliver it by phone or in person and to be able to more personally deliver that bad news,” Resneck said. “What we're talking about is very rare, less than 1 percent of cases.”

The AMA points to survey data it commissioned showing close to two-thirds of patients want their doctor to talk them through “life-changing” results.

Other physician groups are raising concerns. Brian Outland, director of regulatory affairs at the American College of Physicians, which represents internists, argues that while patient access to timely information has its benefits, the rule is creating more work for doctors and can cause problems for patients.

“Patients often will get anxious about the results. It creates more phone calls and … can add to the physician burden,” Outland said, adding that it can also erode patient trust in the medical system.

The doctors are finding allies in state legislatures.

California passed a California Medical Association-backed law that would allow doctors more time to review results before releasing them. And Kentucky passed a Kentucky Medical Association-backed bill last spring that allowed providers to delay releasing test results for up to three days if they believe the results could inflict emotional damage.

Trusting patients

The debate over the rule has split doctors from patient advocates.

The advocates say that the rule already gives patients a choice about whether they want their results immediately or not, and that their decision should be respected.

“Ultimately, the result is the patient's to have and they should decide the timing of it,” said Deven McGraw, a member of ONC’s Health IT Advisory Committee, former high-ranking HHS Office for Civil Rights official and lead of data stewardship and sharing at biotech firm Invitae.

“The regulations do not prevent a physician from having a conversation with their patients when they are ordering particular tests, telling them about the fact that they might get their results in advance of the doctor seeing them,” said Genevieve Morris, a former top ONC official and now senior director of interoperability strategy at health IT firm Change Healthcare.

The AMA’s Resneck said that technology issues prevent many providers from separating patients who want their results immediately from those who don’t.

HHS National Coordinator for Health IT Micky Tripathi expects that’s a problem the market can solve.

“'It’s absolutely the case that the electronic health record vendors don't uniformly have the ability to [let patients decide if they want results delayed],” Tripathi said. “But that's what demand and supply is all about. Right now, the demand is there. We would expect now the response from the supply side.”

Leigh Burchell, vice president of government affairs at health IT firm Altera Digital Health, said on behalf of the Electronic Health Record Association that “many EHR technologies can or will soon support both immediate transmission of clinical data or a delay.”

Although some people have good relationships with their doctors, many patients don’t, added Morris.

That “impacts whether a patient wants to hear bad news from them or from a computer screen,” she said.

For example, Morris said she had a test result that came back showing she had hypothyroidism and meant she'd have to be on medication for the rest of her life. When a nurse called her to inform her, the nurse had “zero sympathy,” she said.

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Kyiv thinks Russian cyberattacks could be war crimes

Ukrainian cyber officials are gathering digital evidence for The Hague to prosecute, their top chief says.

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