We’re headed into 4th of July weekend and we’re doing the first of two special shows focusing on achieving financial freedom. But, breaking news has caused us to change plans a little bit and we’re going to kick off the show by Walmart’s blockbuster plan to sell insulin for about half what it currently goes for. Dana Abramovirtz and Maxx Chatsko join “7investing Now” to discuss whether this could be a major market disruptor and force drug companies to make changes,. Then, we’re going to talk about Dana’s journey as a business owner and how you can take charge of your financial future.

Transcript

Sam Bailey  0:15

Welcome to 7investing Now, a show that teaches you how to take a long term view on investing by better understanding what’s happening in the market now.

Dan Kline  0:25

Good afternoon 7investors and welcome to the Wednesday edition of 7investing Now. My name, of course, is Daniel Brooks Klein. I’m the host of the program. I’m being joined today by Dana Abramovitz. And for a little bit at the top of the show, Maxx Chatzco. We’ve got big news to talk about. But before we do that, Dana, what’s the heat like? Are you guys far enough West? Are you getting any of this extreme heat? I know Texas is sort of the middle of the country. Are you having normal temperatures? Are you getting the extreme heat that some of our friends are getting?

Dana Abramovitz  0:57

Well, I mean, it’s Texas. So you know, like it’s normally you know, in the 80’s, 90’s, 100’s this time of year. So it actually felt a little bit cooler to me today because we had a lot of rain yesterday. So it kind of cooled things off a bit.

Dan Kline  1:14

And we apologize that the audio is not perfect. We’re working with some some tech limitations at Dana Studio. And we’re going to talk about Dana Studio and her Odyssey of creating her own business. As part of sort of our series on financial freedom. Friday’s show, which is actually taped last night, I actually taped a show, five steps to financial freedom, with Anirban Mahanti, and we really went through everything you need to do to get your finances in order, through investing, through retirement, we cover it all. It’s gonna be a really fun show on Friday. We of course would like your questions and your comments.

Maxx, let me start at the top of the show with you here. Before we get into our big, big first topic, which is Walmart (NYSE:WMT) entering the insulin game. It is June 30. That is the last day of June I know some months at 31. Some of 35. Some I don’t know how that how this works. months have a lot of days sometimes No, they all have 30 or 31. Except for February. This is not the Hebrew calendar. Or sometimes they have a whole extra month where they just like have July again, we don’t have that. But you are preparing our big picks, our 7 stock recommendations for July What can you tell the people without revealing anything about how they might get access to those picks?

Maxx Chatsko  2:25

Five of our seven picks for July we’re just taking rate from Reddit actually. So I think people are really gonna like our picks in July. No, if you want to get access to these, if you’re a member, you know, we’re going to issue you know, big announcement tomorrow, which is the first of the month, as we do every month. And you can read all the reports we actually have deep dives so you can see us pitch each pick to the team. All that fun stuff comes out on the 1st. If you’re not a member you have to go to 7investing.com/subscribe. This is actually – we have what a week left until our price increase Dan? So if you subscribe before July 8, you can get it for $49 a month for $399 a year. And as long as your subscription remains active, you will lock in that price. You’ll be grandfathered in. Everyone else will have to pay $49 a month and $399 a year I think it is

Dan Kline  3:16

That is correct Maxx, I have to say I am pretty touched that most municipalities around the country are actually throwing fireworks celebrations in honor of our picks. I can assume that’s why they’re throwing fireworks celebration. There might be other reasons, but that is probably the big one. Our top story today is Walmart had a bit of a shocker yesterday, they said they’re going to come out with low priced insulin. This is the same insulin, it’s not being produced by Walmart. It’s being produced by a credible third party and Maxx, why don’t you give some of the details on just how incredible this pricing is?

Maxx Chatsko  3:51

Yeah, so finally some good news around drug pricing coming out. So Walmart came out yesterday and they actually already offer certain insulin products, but they’re going to offer an insulin analogs. So that’s really like the standard of care right now, if you have type one diabetes or type two diabetes. So Walmart came out and said they’re going to offer their own version of insulin as part of the ReliOn brand. It’s going to cost about $73 per vial. So diabetes patients typically require about two or three vials per month. So this works out to a cost of about let’s see, I did the math earlier $1,750 to about $2600 per year per patient. So this is significantly cheaper – about half the cost, with some other companies like Novo Nordisk (NYSE:NVO), or Eli Lilly(NYSE:LLY) charge for their insulin analogs.

So this is actually a really big deal and especially because Walmart’s such an important part and a lot of parts of the country at large, a lot of the American population goes to Walmart, it’s a very big part of a lot of rural and suburban location. So this could help out a lot of people and save them a lot of money. Assuming insurance companies cover it right? Just because it’s a lower cost doesn’t necessarily mean the out of pocket costs will be lower. I suspect that will be the case, I think will be a lot of eagerness to cover a lower price product, they’ll save the healthcare system money, Medicare money, and so on. So this is actually really encouraging sign, it’s going to keep a lot of drug developers honest on their own drug pricing.

Dan Kline  5:24

And Dana, we’re gonna get into the nitty gritty on this a little bit, but I just wanted to get your 10,000 foot view of this, I’m gonna guess, well, this isn’t all the way there, this is still pretty good news.

Dana Abramovitz  5:35

Yeah, no, it’s it’s – drug pricing is just too much. I get that you’re making a drug is risky. And you have to put a lot, you know, pharmaceutical companies put a lot of money into it’s a big investments. But, insulin is something that we’ve been making for decades, like human insulin we’ve been making forever, and people are so dependent on it, just raising prices, just because, it just doesn’t – to me, it’s just a little bit greedy.

Dan Kline  6:22

It’s a lot bit greedy and drug companies, it is one thing, you know, in the early years of a drug to recoup your costs, it is another thing entirely, I read this, I’m not a scientist by any means. But it is not difficult to make insulin. So it is one of those things in other areas of society, competition tends to bring prices down. That hasn’t happened with drug prices. Dana, if you want to mute while you’re not on, I’m gonna throw to Maxx in a second here. So I want to know Maxx here. Walmart is within I think it’s a five mile drive of something like 95% of the country. Obviously, they can also mail you this, I don’t think insulin needs any special temperature control. But I might be wrong on that. Feel free to jump in if I’m wrong. Is this the start of Walmart, disrupting drug companies and forcing them into lowering prices? Because why wouldn’t you buy insulin from Walmart if you needed it?

Maxx Chatsko  7:15

For insulin this is a huge deal. Especially I mean, this has gotten a lot of like, you know, political pushback as well. It’s like in the media, right? It’s all over social media. Why do they pay so much for insulin? Especially if you’ve type one diabetes, that’s a genetic condition, you didn’t choose to have that. So if you have to pay 1000s of dollars out of pocket just to stay alive. That’s not really fair, right? And especially because this is insulin, this is like a pretty low complexity product. So this is very important that Walmart can do this in terms of other generic drugs. I mean, we already see this with pharmacies, right?

Like, for example, you can go to CVS (NYSE:CVS) or Walgreens (NASDAQ:WBA) or wherever, and buy Claritin, that is the brand name generic medicine. Or you can buy the CVS or Walgreens version of it, which is exactly the same product, because it’s a generic medicine, these are regulated by the FDA. And it’s like, you know, half the cost or a third of the cost. So we really do have this for generic medicines. I’m sure a lot of other things can come down in cost and drug pricing. It seems like everything’s kind of elevated ,medical devices as well. So I don’t know what Walmart’s total ambitions would be here, but definitely huge for insulin.

Dan Kline  8:24

My guess is Walmart is going to go after drugs taken by a high volume of people that it can find partners to work with. So about 11% of Americans have type one or type two diabetes, about 14% of Walmart customers have one of those those two diseases. I took those numbers from CNBC so credit to them. This is one of those things where I don’t think they’re going to get into the nitty gritty of you know, very specific drugs, but where they can make a big impact I think they’re going to and this is all part of, and Walmart has said this, this is part of their low price strategy. And I likened it on our Slack to sort of T-Mobile being the white knight and coming in and saying, hey, we’re not charging for overages anymore. And even people who really liked Verizon went like Well, you’re still charging me overages. So if you don’t get rid of that, I guess I have to go to T-Mobile. But Dana, let me throw to you here. Why is insulin so expensive? When it’s not difficult to make? Like, is it just truly we have a monopoly and you need it?

Dana Abramovitz  9:23

Well, I think that the market has gotten bigger. And it’s easy for companies to raise the prices to take advantage of that, you know, they are trying to, Maxx mentioned to an analog, right, so we know, with insulin, they first used to get it from animals, and then they have the recombinant technology to make human insulin. So Eli Lilly was the first to do that. And then now they’re trying to make analogs, so that you can kind of prolong it, and it works better. And so they’re constantly evolving it. So they have a new patents and they’ll have that protection and again, it’s Yes, it’s helpful, but to the point, it’s just prolonging their, their monopoly of the market, which is unfortunate for, you know, people who need it, especially with Type One Diabetes. You know, I know Maxx’s mentioned to him several times, you know, people with type 2 diabetes. And that’s a lot of lifestyle changes, so you can reverse it, but if you have type 1 diabetes, and my boyfriend does, it’s devastating, right, just that dependency on insulin?

Dan Kline  10:51

Yeah, that’s, I’ll give you the last word here, because you’re going to be hopping off the program momentarily. Do you think we could see a sort of, you know, revolution in drug prices? Again, if it’s a drug that 100,000 people take, that’s not going to be true? And I’ll give an example. I take prednisone for acid reflux, you mentioned the generic Claritin, the actual name brand prednisone, basically cost not that much more. It’s like pretty close to the generic or else why would anyone ever not buy the generic now if they’re really close? I still kind of feel like I’ll buy the brand name. Could this happen across at least these really common drugs? I’m guessing an awful lot of people take prednisone or omeprazole or something like that.

Maxx Chatsko  11:34

Yeah, I mean, a lot of generics are price, you know, affordably, I would say insulin analogs and insulin are not. So I think this is gonna be really disruptive for Novo Nordisk, it has a challenging portfolio right now, right. It’s gotten a lot of scrutiny from Wall Street investors. It’s very dependent on its cardiometabolic. I mean, that’s what it specialize in. Right. So it’s very, very dependent on its insulin analogs for revenue. And that’s part of the reason why we pay so much in America. So, some of this is like, we need to negotiate better prices as a country, or maybe even put caps on it. And even for some of these specialty drugs, or like, gene therapies and things when they charge millions of dollars. And they argue that well, you know, compared to getting crazy care that you need, and nurses all the time for the rest of your life, you know, $3 million isn’t so bad.

Well, the problem is like the rest of healthcare, like nurses and all that other care that you need to get is also at a crazy elevated cost for no real reason. So it’s a kind of a dumb benchmark to like pin your drug prices on. So I think we do need some pretty, you know, we need to, we need to regulate this a little bit better, we do need price caps, or, you know, you can’t just keep jacking up the price every year, because you’re the only one that makes it. It is kind of silly how we do that. And specifically for insulin, this might not be the last word, there’s actually a group of bio hackers Dan, they’re working on something called the open insulin project. Might be a little ambitious, but they’re working on making insulin open source.

So anyone could actually make it and they want to charge 98% less for their insulin, just that cost, basically. So I’m sure regulators would have something to say about that. But, you know, as we have like distributed biology and synthetic biology takes off, we might be able to make some of these generic medicines at home one day in the future. So that’s kind of interesting levels. Or maybe Walmart could make its own, you know, open insulin.

Dan Kline  13:29

I love, love innovation. I also love open source. So in the software world, in the technology world, open source is code that you could say, Okay, I want to add this functionality to my website, and someone else has done that work, they let you use it, you plug it in, and you can modify that code. And if you modify it, make it better. You might put it back out there and be like, Hey, now it also takes payment from this platform, or whatever it is. Let’s take Mike Fee’s comment, Maxx, if you want to read that one. That would be great.

Maxx Chatsko  13:58

Yeah, Bluebird bio is gene therapy treatment Zynteglo costs $1.8 million per person. Yeah, it doesn’t. I think it’s actually over 2 million. I think they raised the cost or maybe that’s one of their other gene therapies. But yeah, it’s kind of crazy, right? And so it’s like a one and done treatment. And you know that they allegedly Okay, maybe you don’t need, you know, blood transfusions anymore this that the other thing, but it still is a big cost on the healthcare system. And additionally, a lot of these rare diseases, right, so we’re not talking about diabetes, but they get a lot of like, hype in the media or with Wall Street. But most of the patients that have these genetic diseases don’t live in the United States sometimes, right? So Bluebird bio was a good example.

They had gene therapy for sickle cell disease, and beta thalassemia. So two rare blood disorders. But most of the individuals in the world who have those genetic traits or conditions are of Mediterranean descent, there’s also a population in India. So if you’re selling this drug, you know, Portugal or southern Italy or places in India or Northern Africa, aren’t going to be paying $2 million per year. And I think Wall Street kind of doesn’t necessarily price that in all the time. So you do it like, as we move to genetic diseases, you do it to incorporate, like the global footprint of where these traits are,

Dan Kline  15:12

We’ll do another show on the politics of drug prices, it’s obviously a tough thing to negotiate. But it’s one of those situations where any person can look at the system and say it’s broken, if you’ve ever had a relative that has any sort of severe or ongoing illness, they have come up against, hey, my insurance won’t pay for this thing that I need to keep me alive, and they have to fight it out. I don’t think it’s political to say that, that isn’t how medicine should work, that doctors should be making these decisions.

And I’ll say, in my world, I have someone who has leukemia, and the medicine he has to take is relatively common. It’s also very expensive. And for a while he had to fight his drug company, my brother, and I were literally figuring out how we were going to fundraise for him, you know, so he could, you know, not die. And I know, that’s selfish of him wanting to stay alive at the expense of the drug companies. Dana, I think you want it to weigh in here.

Dana Abramovitz  16:01

Yeah, I was just gonna, you know, talk about public benefit corporations, so that, you know, legal charter, right, and I get, you know, a pharmaceutical company, they’re in business, right, and they have a fiduciary responsibility to their shareholders. But at the same time they’re creating drugs for people, you know, to help keep people alive. So with the new charter of public benefit corporations, which includes the responsibility to society, and their customers and employees. I think, in addition to the fiduciary responsibility, I think that that would be a nice shift. And I know a lot of the companies that I’ve been looking at are public benefit corporations, and I think that if we see the pharmaceutical and biotech industry shifting in that direction, then it kind of, you know, can help them balance that out.

Dan Kline  17:04

The past year or 15 months, whatever we’re going to call it has shown us that drug companies and science can do amazing things if they’re so motivated, and they can do them at what I would call a reasonable profit developing a drug and selling it at 20, even a 40% profit over – even 50, which would be typical of say, most retail items. That’s reasonable, that’s not gouging, that’s not trying to make all your money back at once. We’re gonna see some reform here. Maxx Chatzco it s Fourth of July weekend as I send you off here. Is there truth to the rumor that you were going to enter the Fourth of July hot dog eating contest and throw down and try to put down 90-100 hotdogs here?

Maxx Chatsko  17:42

Yeah, Joey Chestnut, I don’t want to say too much. But you know, I’m coming for you.

Dan Kline  17:47

We would like to see that happen. Maxx Chatzco, thank you for joining us. We would love your questions and comments, your Fourth of July Greetings, your predictions, whatever it might be. But we’re gonna do something really different here. We’re gonna pivot. And we’re gonna talk to Dana, about what led her to start her own business. So Dana owns a Fitness Studio. Dana, why don’t you explain a little bit what the business is, and then I’ll get into my set questions here about how you did it.

Dana Abramovitz  18:13

Sure. So um, it’s it’s bar fitness, it is a franchise, low impact, high intensity exercises, it just helps improve strength, flexibility, posture, it’s accessible, it’s for everybody. So you know, I have people from as young as you know, 12-13 to as old as you know, 76. So, um, you know, full range of motion. And yeah, it’s just, it’s just good.

Dan Kline  18:47

So you’ve done a lot of things, you have a very impressive career, I think a lot of us have been entrepreneurs, and we’re all sort of entrepreneurs right now, I’m working here at 7investing. But this is a big pivot from what all your background and your training is, what got you thinking, you know, what, maybe I should start running the numbers, I want to put a Fitness Studio together?

Dana Abramovitz  19:07

So I went to business school, I had started a business before and had sold that and had some money to invest. And with all of my investments, you know, all the recommendations I do here at 7investing, I do my homework, I look at the data, you know, I look and see what it is that I’m getting myself into, and making sure that it’s a good investment. So, you know, and I had been a client of this franchise, so I, you know, I knew it well, I knew how it changed my life. And there was kind of a void where I was in Houston, and, you know, looked into providing that again, you know, looking at the numbers, I didn’t just jump into it blindly. Yeah,  that’s what got me started.

Dan Kline  20:02

Yeah. And let me point out that Dana did a full on business plan. This wasn’t just, Hey, I see an open storefront. And I like this thing. And I think that’s really important to know. Because in my years of being a reporter, I’ve covered so many, it’s usually restaurant openings, but sometimes it’s boutiques. And the person talks about their passion and how they want to bring whatever their their favorite food is to the market, you know, whatever, when it’s, it’s usually something you know, from their country or their culture. And the person hasn’t done the basic economics. And I can look at the board because my boss, when I ran, the toy store was really good at this. I could look at the pricing, do some quick calculations and go Yeah, they’re not going to make it no matter how much they sell. And that is largely how a lot of businesses are started. It is why so many businesses fail. Good morning to you, we will get to some questions and comments later. But Dana, what was the hardest part going from idea to reality?

Dana Abramovitz  20:59

Lots of hard things. So like I said, head started a business before, but that, you know, was just a software company. You know, this is a brick and mortar business. Having a studio so you’ve just learned a lot there. And  I always, you know, reminded myself profit equals revenue minus cost. And, you know, cost was something that I was able to control. Especially with fitness, you know, just, you know, it’s so personal for so many people that, you know, revenue was kind of hard to estimate, but just keeping costs down. So that’s really where, where I focused.

Dan Kline  21:44

And that’s the strongest advice I could give to everybody. So I’ve run businesses, I also grew up in a family started business, my grandfather started making ladders in his garage, and eventually grew to a multi location ladder and scaffolding company. But he knew every aspect of the business and was always careful, even when things were going well of Nope, let’s not put a bunch of money out there. Let’s not open now. We expanded we opened in new markets. When I was running the toy store. The biggest challenge was, I had so many areas that required expertise, like model trains and doll houses, that well, can I bring on a full time person to run doll houses? When that’s only 200 grand of revenue a year? No, probably not. That has to be limited hours. All of those things matter. Dana, did you make any mistakes along the way?

Dana Abramovitz  22:30

Oh, so many. So ere I am sitting in my space. And, you know, like, I just think about, you know, if I shaved off a couple like, 500 square feets, you know, like, I would have reduced costs and, you know, adjusted that profit. So, you know, certainly mistakes there. And then, you know, like, hadn’t planned for the pandemic. I mean, who did?

Dan Kline  23:02

We were well ahead of it. We knew to launch 7investing, right into the pandemic. No.

Dana Abramovitz  23:06

Exactly. Yeah. So obviously hadn’t planned for that. So I do my homework, I trust myself when I look at investment recommendations, you know, I look at the team, I know my team and what we can do, and trust it to keep us going.

Dan Kline  23:28

And you’re doing remote classes right now, correct? In addition to in person.

Dana Abramovitz  23:33

So I do offer classes over Zoom, in addition to in the studio.

Dan Kline  23:41

So if someone would like to sign up to take a class and I know we’re going to do a team class at some point. And, and I’m very curious, because I’ve done an awful lot of yoga, I’ve never done this particular discipline, how would someone go about taking a class?

Dana Abramovitz  23:56

Well, that would be really fun. Um, so would it be okay to just email?

Dan Kline  24:03

Share whatever you like, if you want to share your Twitter if you want to share your email that is totally up to you. Just remember, if you share your email, you might get some emails that you don’t want.

Dana Abramovitz  24:13

That that’s true. It’s just Okay, so my Twitter handle is on the screen. Do you all see it? So it’s at @DanaAbramovitz7. You can tweet at me or DM me and if I can’t figure it out, Dan will help me on Twitter because I’m not the best. It’s just if you go to our website,  it’s a little bit too long. So just tweet at me  and I will get you all set up if you wanted to try Zoom class.

Dan Kline  24:40

Or feel free to DM me and I will get it over to Dana because I actually have my DM’s open. So any person can send me a message and I do get a lot of cryptic messages, but you don’t have to respond to those. But I do get a lot of great messages from viewers here. So that’s sort of our theme today. We actually asked on Twitter and Max Lucas, we’re going to take your question at the end. The show, I asked on Twitter in honor of sort of what Dana’s doing because starting a business is terrifying. Starting a business is daunting. This, you open, I don’t know if you’ve ever seen the movie, so I bought a zoo or I don’t remember the exact title, the owner Matt Damon buys a zoo. And there’s a scene in the movie and I spoiler alert here, I’m going to spoil the end of the movie that came out like 15 years ago. But there’s a scene at the end where he opens the gate and no one’s there. And there’s a reason no one’s there. And it turns out a happy ending everybody’s there. And it’s really successful.

But every time I went to the toy store, there’s that little ping of Oh, my God, nobody’s going to come in today. When I was running a part of the family business and doing scaffold rentals. If we had a slow month, I would look at it go, oh my god, maybe they’ve all gone to our competitors. There is a lot of stress to this. But our audience has taken a lot of risk. Sam Bailey, if you want to throw my question up, it is I asked that. I hope Sam has these. I didn’t tell him. There it is. What’s the biggest financial risk you’ve ever taken? Sam is always a step ahead of me. And I appreciate that. And Andrea answered first, and this is a great one. And Dana, you can weigh in wherever you want. Left the real world move to a heap of sand in the middle of the Pacific, as my mother likes to say, and take my life savings into following my passion. I opened a scuba diving shop, I went from four employees to nearly 100, it worked out rather well. Yeah.

Now, Dana, you didn’t move. But you did follow a passion here, right? Like this isn’t the business you you were trained to be in. And yes, you have a business background. And that’s great. You went to I assume got get certified as a teacher, right?

Dana Abramovitz  26:33

Yes.

Dan Kline  26:34

So there’s all sorts of dreams here. The one thing I would be very careful because I’m a journalist. And I’ve spoken to a lot of young journalists and they say, I don’t want to go take a job, I want to travel the world. And it’s like, Well, okay, but who’s gonna pay you to travel the world and figure it out. And I sat with one person after a speech I gave, and I said, Okay, you’re gonna go from where you are, and you’re gonna go to Salem, Mass. And here are all the things in Salem, Mass. So you have to reach out to a beer publication, because you can go to these three breweries like why don’t want to write brewery about brewers? I want to run travel guide and like, Yeah, but nobody’s gonna pay you the cost of your trip. And a lot of people don’t like hearing the reality of following their passion.

Let’s take the the comment with no name on it. This is actually a friend of mine. I wasn’t sure he wanted to share this. The biggest financial risk he ever took was getting divorced. I mean, he had to, but I know the story yes, I do. But halving your net worth at 40 halving, meaning cutting in half your net worth at 40. Plus, taking out an unknown multi year cash drain is daunting. I know that others chose to stay. Suck it up was totally worth it, but daunting at the time. Yeah, Dana, neither of us have been divorced.

Dana Abramovitz  27:45

Never been married.

Dan Kline  27:47

So hard, you get divorced. And I’ve I’ve managed to stay married. So that’s, that’s been a positive. But I’ve always looked at that my wife and I have often joked back in the days when we had CDs and books. Oh, god, it’s not worth taking all the time to split up our CDs and books. Like let’s just stay married. And I’m kidding a little bit cuz I have a great relationship. But yeah, that can be a risk. Let’s get a couple more of these. And this one, I don’t think is a great idea. But it comes from dollars and cents. If you want to share that one. Sam Bailey cashed out all my retirement accounts and lived on credit cards to start a business. Terrible idea in hindsight, lucky, it worked out.

Yeah, we’ve all seen Shark Tank and all these stories about how much debt people went into. But realize these are like good gambling stories, you only hear about the winners. So if you’re going to start a business, I would highly recommend starting a business you can afford. And actually putting together a business plan. And if you have to raise money if you have to borrow money, because you can learn a lot of lessons from a failed business. I’ve been part of successful startups. I’ve been part of failed startups, not my money. But in the internet days, I worked at all sorts of places. And if you’ve put your own money into it, you can wreck your life. And I totally understand betting on yourself. But be very careful. And I want to share as the last one here. Before we get to a couple of comments.

The question from the comment from Arash because it is a it is about to be Fourth of July, escaping my birth country for a chance to live free in America. That is a risk moving away from where you’re from. Welcome. I don’t know how long ago this happened. But that is what this country is all about. Creating opportunity. And we are so glad to have you here. We are so glad that we have so many viewers all over the world. Let’s close the show taking a couple of questions and comments here. Mike Fee has had a second comment but we’ll go in order here, Sam. Thanks for the discussion on pharma cost. It’s complicated, but also misunderstood. I agree that separate episode is a good idea. drug companies are generally price takers, not price makers. The PBM’s have a significant role in negotiating and determining price, Dana, I have nothing to add to that. I’m hoping you do.

Dana Abramovitz  30:00

Yeah, so yeah, the pricing is really complicated, and we can definitely talk about it some more, I get that, you know, pharma spends a lot in investing, they take a risk as well. It’s very possible that, you know, all the the science and the drug development work that they do, the drug won’t get approved, and so that money is lost, so they want to get a return on their investment. But that said, a drug that’s been on the market for decades, you don’t need to raise the price just because the market improves. And then it’s interesting, a lot of their costs go into marketing, and not necessarily drug development. So, you know, like, the fact that you can see ads on TV. Do we really need that?

Dan Kline  31:04

A vast majority of the ads here in Florida, given the age of our population are for drugs. And there are times where I’m like, do I have that? Do I want that like, those people look so happy, they’re, they’re dancing on them. Wait a minute, I don’t have moderate to severe, whatever it is, it’s always moderate to severe, nobody is curing mild, whatever disease you particularly have. Of course, we also have a lot of ads for KitKats. And Reese’s Peanut Butter Cups. I’m not sure why those need to advertise, either. Max Lucas had a question for me. I’m happy to take it here. Hey, Dan, do you think the court’s decision to dismiss antitrust cases against Facebook will eventually lead to a regulatory committee like OSHA? I hope so. That is my prescribed way that I’d like to see big tech regulated, I think we’ve seen in the television space that the FCC has largely been a failure, they have not done a good job.

And I know coming from the construction space, Look, my dad’s been on OSHA committees and, and wrote a lot of the, you know, the standards for a step stool and things like that. And if you’re a company that makes ladders, you have that expertise, and if you’re an industry that makes ladders, you have an absolute interest in having a standard where the cheapest worst thing doesn’t get someone hurt, and that there is a clear, but there’s more to that we need. And some states have this, if in the state of Virginia, and I know this because I defended a lawsuit there. If you meet the OSHA standard, you can’t be sued, even if it ends up coming – you can be sued, but you won’t lose, even if it ends up true that your product hurt someone. So if the whole industry agrees at a safety standard, and then someone gets hurt. So the case I did where the person was absolutely lying, and they did not get hurt the way they said they got hurt. But their lawyer introduced that they acknowledged that the ladder met the safety standard. And the judge immediately threw the case out.

So I do think we need that in tech. But I think we are heading towards Congress coming up with some sort of a new anti trust standard that we are going to see, you know today, you know, there was a big deal that that there’s a lot of talk about scrutiny and and I can’t speak about the specific deal. But that one, I looked at it like wait a minute, here’s a company that’s buying something that doesn’t do in an area that has a tremendous amount of competition. So we’re gonna have to figure out what anti trust is we’re gonna have to figure out what competition looks like. What data privacy looks like, these are not going to be easy things.

Let’s close out with a final comment from Daniel Delgado before we hit our finisher. Walmart is huge. But where Walmart fails is customer service at the pharmacy counter customer service everywhere in a Walmart it took me longer to make a key there that it probably would have taken me to wittle a key and I’m not a wittler. Also, the whole store customer experience is quite terrible. And checkout is terrible with the unfriendly checkout person. That is not universal. I have met many kind nice Walmart checkout people. But yes, this is a problem. Look, there are also cheap drugs at Costco and Sam’s Club and BJs. And because they’re so low frills, they don’t do a great job because they don’t promote them. You can definitely get a lot of your prescriptions. I don’t know specifically, but when you go into a Costco if it has a pharmacy, there’s like a deli board of like what the prices are and they’re definitely cheaper than if you get them normally.

But because there’s so little customer service there, it doesn’t work well. So yeah, but I will argue and I’ve been as critical of Walmart as anyone. There there was one point I was getting angry calls from Walmart PR. Walmart when they launched two day shipping, it was a disaster. Your order would show up in five boxes. They’d asked you to go to the store to pick up things. They’ve done a really good job improving that. So I do think if they’re going to make a big play into pharmacies, they are likely going to have to acknowledge that you need trained people.

You know CVS isn’t a great experience but you need to be at least that good. I find it odd Dana, and tell me if this is weird, that if you’re going to pick something up at CVS, and I was actually paying for a non prescription thing, because the line at this particular target was so long, but the person in front of me was getting a prescription, and the person behind the counter filling it, yelled out their name and said, it’s for this, right? And I went, Oh, God, like, that can’t be like, like, what if you’re taking something embarrassing, or just have a condition you don’t want people to know? So that has to be illegal, right? That that violates patient privacy in some level?

Dana Abramovitz  35:29

I don’t know if it’s illegal and, you know, where it would like violate HIPAA, which is the Health Insurance Patient Protection Portability Act is a, um, you know, if they included their name and address and stuff like that, but like asking somebody, you know, like, hey, this drug is for this, you know, within earshot of other people. It’s not necessarily good customer service, but I don’t think that they’re going to get penalised.

Dan Kline  36:10

No, it’s and I only bring it up, because customer service is generally an area that I talked about, it will be sort of, like, you know, some waterslides have a weight limit, and God forbid, you’re over the weight limit, they should find a way to be discreet about it, you know like whispered in your ear, and then be like, oh, like, you can’t wear that belt on the waterslide. And like the whole world needs to get more sensitive. I only pointed this out, because it just seemed to be like a training thing. And that’s neither here nor there.

Sam Bailey, thank you for being on the ball with our graphics, and let’s hit our finisher. Which of these are you most likely to do in the next year? I was just curious here. 21.3% said quit your job. And I asked this question, because they’re saying so many people are quitting their jobs. 25% said move. 48.5% said start a side hustle. And only 4.5% said, break up with your partner. I found this interesting, Dana, because people only start a side hustle because they need more money. And I actually do think we’re at a bit of a reckoning point at the lower end of the workforce, where we are starting to see wages pretty rapidly increase here in Florida, you’re seeing sign on bonuses, you’re seeing above $15 an hour. It’s acute in the Orlando area, are you seeing that in Houston, where you drive by a taco bell, and they’re offering a signing bonus?

Dana Abramovitz  37:31

So I haven’t seen that. But I do know that too, more and more people are looking for help. And certainly, you know, the pandemic has kind of shifted things around a little bit. So I actually have a side hustle and it’s just kind of fun, right? So I know a lot of people that do. If you have some extra time, you know, want to be creative. Side hustle, go for it.

Dan Kline  38:04

I haven’t done a lot. But I would argue that I have a side hustle in that I do sometimes take on non stock market related writing or editing projects. And, and generally, at this point, it isn’t so much about the money as it is, you know, something I’m interested in though, occasionally I’ll get offered something I’m like, if I do that, I can take this trip or or do this thing that I otherwise wouldn’t have. And I’d argue we own an investment property, which is a side hustle to a point. It’s an investment. Let’s close out with Max Lucas’s comment. He is a friend of the program, a 7investing friend, I’ve started multiple side hustles not because I need extra money. But making extra money is a hobby of mine. That’s a great, that’s a great point.

But I will also tell everyone, and I’ll tell Dana cuz I know she doesn’t necessarily do this in her life. Make sure you take time for fun. And I am an absolute believer – like so I’m traveling like pretty much every day for the rest of July. And some of those trips are going to be work in the middle, I’m going to be at our investment property. And I’m going to hang out at the pool, I’m gonna do all sorts of fun things. I’m gonna have dinners out. But I’m also going to host the show and I’m also gonna go to our meeting on Friday, because that’s not a real vacation just sort of a change in locale. On the other hand, this weekend, for the first time in the pandemic, certainly, I’m taking actual days off and I am going to be in the Bahamas, I will wave to you from the cruise ship.

I think it is really important to deplug from work and for people like Maxx are people like Dana, for people like me, who have these sort of amorphous jobs that you know, the stock market doesn’t stop because I take a day off and as a long term investor, it’s not that important, but you still don’t want to see like stuff in the Slack channel we saw today. Matt was away for a few days at a conference. And he’s like, wait, what happened? What are these things and I get the temptation, but I can promise all of you I will personally answer you on Slack for fun things. I will share some photos from where I am if any of you want to follow the progress of my vacation I’ll share photos @worstideas7 on Twitter. But I’m not going to work because this is the rare time Monday is a holiday there’s no show. So when I get back Monday night I’ll spend the day with my family and then Tuesday I’ll get up and start again. It is really important especially coming off what we’ve all come off. With that Have a Happy Fourth of July.  There will be a show on Friday it’s a little bit different but but please tune in for that show or watch it on any of our channels. If you’d like to get in touch with us that is info@7investing.com – that is questions about your membership, questions about the service, questions about Dana’s business. Whatever you would like. If you would like to reach out to us on Twitter and interact with us that is @7investing. If you are a member and you share your referral code which gets you a free month for every person that signs up using that code. Tag us @7investing and some of us will retweet it. Tag our individual Twitter’s, we are happy to share. But with that I am getting closer and closer to being on vacation, which again, I haven’t taken actual time off since we’ve had a pandemic. I’ve been places, I’ve gone places but you saw I was in Vegas .I hosted a show. I was in the Carolinas, I hosted a show. We’re going to actually. Not we it’s just me going to have some downtime. My wife won’t get in the cruise ship. With that I look forward to seeing all of you a week from today. Until then for Sam Bailey, for Dana Abramovitz. I’m Dan Klein. We will see you on Friday.