Branson and Bezos launch a space race for insurers, too
Richard Branson is scheduled to fly into suborbital space this Sunday, nine days ahead of a similar journey by a fellow billionaire, Jeff Bezos. These first flights for the space moguls will also launch without liability insurance.
Brokers say that neither Virgin Galactic nor Branson appears to have purchased coverage should the British business mogul be hurt, or worse. (The craft is likely covered.) The same goes for Bezos and his company Blue Origin. Virgin, Branson and Blue Origin declined or did not respond to requests for comment.
Liability coverage is required on international flights. But Virgin’s craft, the V.S.S. Unity, launches and lands in the same place. As such, Branson’s flight, despite rocketing 2,400 miles an hour to the edge of space, is technically considered domestic travel. Virgin has said passengers will eventually be required to sign a contract agreeing to be fully liable for their own safety, but American law makes it nearly impossible to transfer all liability in the case of personal injury or loss of life.
Insurance providers say it’s very likely that regulators will soon require liability policies. There aren’t currently a lot of options for casual space travelers, but some insurers are interested in developing such policies. The German insurance giant Allianz first began designing space tourism policies in 2012, though there is no evidence one has been sold. (Allianz did not return a request for comment.) And while space tourism is new, insurance experts say there is now more than enough data on rocket launches to know how to price these policies.
Space tourism could create a much larger demand for coverage. “The big question for the insurance industry is whether this is more like aviation insurance or more like current space policies,” said Neil Stevens, a senior vice president of space products at the insurance broker Marsh. “There hasn’t been a situation where insurance markets haven’t stepped up.”
But for now, space travel is launching without an insurance net for passengers.
Developing those policies is one more small step that is likely needed before space travel can leap into a fully functioning tourism market.
HERE’S WHAT’S HAPPENING
Markets tumble amid investor fears about the economic recovery. The S&P 500 fell as much as 1.6 percent and the yield on 10-year Treasury bonds dropped after weekly unemployment claims came in higher than expected. Supporters of the Biden administration’s economic plan argued that was a reason to keep pandemic-era government support in place.
Pfizer pushes for Covid-19 booster shots. The company said that it planned to ask the F.D.A. for emergency approval for a third dose of its vaccine, and that it was working on a shot that offered more protection against the Delta variant. Shortly after Pfizer’s announcement, however, the F.D.A. and the C.D.C. said fully vaccinated people generally did not need boosters — yet.
The fallout from China’s tech crackdown grows. As Beijing tightens its scrutiny of Chinese tech giants with overseas stock listings — including appointing a powerful new overseer for the effort — an index of U.S.-listed Chinese stocks plunged. And the Chinese medical data company LinkDoc has reportedly halted its plans to go public on the Nasdaq.
The F.D.A. restricts access to a pricey new Alzheimer’s drug. The agency will limit the use of Aduhelm to patients with early-stage symptoms of the disease, drastically narrowing who can receive the $56,000-per-year treatment. The move will save Medicare billions and came after the F.D.A. was criticized for initially approving Aduhelm for all Alzheimer’s patients.
Toyota halts donations to Republicans who objected to President Biden’s win. The move came after criticism, most recently from an ad campaign by the Lincoln Project. While Toyota had previously defended those donations, it said yesterday that its support of the election objectors had “troubled some stakeholders.”
Biden takes on competition in … everything
President Biden will sign a wide-ranging executive order today targeting the power of big companies. It’s the latest move to promote competition that, his administration argues, is hampered by corporate giants and dealmaking. The order itself will not create immediate change — that will largely be left to the regulators — but it sets activity in motion across a host of industries.
The order takes aim at Big Tech:
It encourages the F.T.C. to write rules limiting how the tech giants use consumer data, in response to criticism that companies like Amazon take advantage of what they know about users to unfairly compete with rivals.
It also says the F.T.C. should establish rules on how much “sensitive personal information” tech companies should collect in the first place.
It urges regulators to increase their scrutiny of “killer acquisitions,” in which companies buy smaller brands to take them out of the market.
It also targets monopoly risks in other areas:
Noncompete clauses. The order will encourage agencies to ban or limit agreements that prevent workers from accepting jobs at rivals, and will restrict the employers’ abilities to share information on worker pay with one another in ways that might amount to collusion. This could affect start-ups that worry about investing in hires, only to lose them to competitors.
Drug prices. The order will also direct federal agencies to work with states on importing drugs from Canada, where they are sold at lower prices. And it will encourage the F.T.C. to ban pharmaceutical companies from paying manufacturers to delay the entry of lower-priced generic products. (Expect this to come up next week in a Senate Judiciary hearing.)
Ocean shippers and railroads. The order will ask the Federal Maritime Commission and the Surface Transportation Board to take on consolidation and aggressive pricing. Shares of Kansas City Southern and Canadian National, which are seeking approval for their $33.6 billion merger, dropped on the news.
In-flight baggage fees, bank-switching costs, meat-labeling practices and much more. You can read the rundown from our colleagues at The Morning newsletter.
The trustbusters have their marching orders. Biden’s executive order leans heavily on the F.T.C. and the Justice Department to “vigorously” enforce antitrust laws. But the top antitrust enforcement spot at the Justice Department remains vacant, reportedly because of opposition to the proposed contenders. Still, the division isn’t exactly inactive: It just sued to block the merger of the insurance giants Aon and Willis Towers Watson. And Lina Khan, a Big Tech foe, was just made chair of the F.T.C., where she is already expanding the commission’s competition oversight. The F.T.C. is also challenging the vertical merger of the biotech companies Illumina and Grail, which antitrust lawyers see as yet another sign that dealmakers will face difficulties in the years ahead.
Daily Business Briefing
“The harms to consumers as a result of this under-regulated market are real and continue to proliferate in the absence of effective S.E.C. regulations.”
—Senator Elizabeth Warren, arguing for stricter oversight of cryptocurrency exchanges in a letter to the S.E.C. chair, Gary Gensler.
A showdown with Martin Shkreli
Despite having been behind bars for years, Martin Shkreli — of price-hiking “Pharma Bro” infamy — is still exerting influence at the drugmaker he once ran, now known as Phoenixus. But a group of investors, including a former ally, is seeking to wrest control, DealBook’s Michael de la Merced reports in The Times.
Shkreli is still making his voice heard. He was reprimanded after the revelation that he had used a contraband cellphone while in prison to conduct business. But even now, while incarcerated in a Pennsylvania prison, he continues to reach out by making collect calls, and federal authorities accuse him of using associates to relay his wishes.
Shareholders will vote Monday on whether to oust the board. A group of activist investors, including Kevin Mulleady, a former Shkreli ally, is urging shareholders to cut the company’s ties to Shkreli.
Their case includes both moral and pragmatic arguments. “Martin Shkreli is a blight on this industry,” said Jason Aryeh, the hedge fund manager who has spearheaded the activist campaign. And the group argues that the company’s business struggles are exacerbated by Shkreli’s continued presence.
The company’s board disputes the allegations. In a letter to investors, the current directors said that Shkreli’s only influence was in his 44 percent stake in the company, and that he had no other say in how the drugmaker was run. They took aim in particular at Mulleady, who previously served on Phoenixus’s board and as C.E.O. until being ousted in December (at Shkreli’s urging). Mulleady is a co-defendant with Shkreli in several lawsuits, including an antitrust case filed by the F.T.C. and New York State.
Shkreli’s days at Phoenixus may be numbered, regardless. The judge overseeing a creditor’s lawsuit against Shkreli last week granted a request to appoint a receiver to take his shares, with the aim of selling them to pay off debts. So even if the activist group loses Monday’s vote, Shkreli may lose his influence at the company all the same, Mulleady said: “Martin’s kind of high and dry here.”
Read the full story here.
THE SPEED READ
Arianna Huffington’s wellness start-up, Thrive Global, has raised new money at a valuation of more than $700 million. (Bloomberg)
Noom, a popular weight-loss app, has reportedly hired Goldman Sachs to lead its I.P.O. (Reuters)
Stellantis, the carmaker that owns brands like Chrysler, Fiat and Jeep, plans to invest $35.5 billion to speed up its development of electric vehicles. (NYT)
Two U.S. senators urged the S.E.C. to investigate whether Didi Chuxing misled American investors about its interactions with Chinese regulators ahead of its I.P.O. (FT)
How the Kaseya ransomware attack took a small Maryland town offline. (WaPo)
Best of the rest
A majority of Black senior managers at Walmart said in an internal survey that they wouldn’t recommend working there. (Bloomberg)
Instacart hired Fidji Simo, the head of Facebook’s namesake app, as its new C.E.O. (CNBC)
How the Sackler family “got away with it” for $4.5 billion. (New York Mag)
Reading this story will only lead you to put off what you really need to get done. (The Atlantic)
Can you spell the winning word of the Scripps National Spelling Bee? While you’re at it, try The Times’s own spelling game. (NYT)
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