Marketplace: News Archives

Thursday, September 28, 2000
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It's Thursday, the 28th of September. I'm David Brancaccio.

The controversial pill to end early-term pregnancies will soon go on sale in the U.S. The Food and Drug Administration today gave approval to RU-486, the so-called "French abortion pill" that will soon have a new name in the U.S. From the Marketplace health desk, Helen Palmer reports.

Palmer: "Call it Mifeprex. That's the name it'll be sold under here and it already has its own toll-free number."

Recorded Messsage: "Thank you for calling the Mifeprex hotline. Mifeprex is the first FDA-approved, early-option pill that provides women with a safe and effective non-surgical method for ending early pregnancy."

Palmer: "That message hits all the right spots. It alerts callers to the fact that this pill regimen is only effective within the first 49 days of pregnancy. Hundreds of thousands of women in Europe have found it safe and effective in the 11 years it's been legal there. Over 2,000 American women tested the method in FDA trials in 1994-5. It was about 92 percent effective and, though it can cause side-effects like heavy bleeding, it's also been deemed safe. And, of course, it can be done in any doctor's office as it's non-surgical: a matter of swallowing pills that block a key pregnancy hormone, and two days later, taking a different drug that causes contractions. For the pro-choice movement, it's a godsend."

Luby: "We're absolutely thrilled."

Palmer: "Diane Luby, president of Planned Parenthood Federation of Massachusetts."

Luby: "It's really comparable to when birth control pills were approved 40 years ago."

Palmer: "She points out that 86 percent of counties in the U.S. don't currently have any abortion provider. Many rural doctors answering a recent poll by the Kaiser Family Foundation said they would be interested in having the medical abortion option to offer patients, and advocates think it could be used by about a third of the 1.3 million American women who currently have abortions each year. Yet this FDA approval is not making a stir among drug stocks, says drug analyst Mark Ravera of Mehta Partners. The manufacturer Danco is a privately held company."

Ravera: "RU-486 was really a political lightning rod, and the large pharma companies did not feel that the market potential of this drug by any measure would compensate them for the flak that would be generated from their promoting this drug."

Palmer: "The flak's already flying. The approval was blasted by the Republican leadership in Congress today and abortion opponents are attacking the current administration, calling the FDA 'careless and reckless'. Olivia Gans, of National Right to Life, advises people to 'consider the Presidential race'."

Gans: "A pro-life President at this point might be the only possibility of preventing the difficulties that could ensue if this drug hits the marketplace as quickly as it might."

Palmer: "Supporters of Mifeprex expect it to hit the marketplace before the election in November. From the Health Desk at WGBH Boston, I'm Helen Palmer for Marketplace."

The U.S. manufacturer of RU-486, Danco Laboratories, keeps a resolutely low profile although The Wall Street Journal recently uncovered some sources of its capital. They include the foundation created by the late founder of Hewlett-Packard, billionaire investor Warren Buffett's foundation, and the Open Society Institute, chaired by hedge fund manager George Soros, which gave money to Danco's non-profit affiliate, the Population Council, to train doctors in the use of RU-486.

Two points for cigarette companies and one point scored for the Justice Department in the government's huge lawsuit against the tobacco industry. A judge today dismissed in important portions of the lawsuit, saying an obscure 1962 law originally designed to help the Pentagon defray the costs of treating the car crash injuries of armed forces personnel doesn't apply to the tobacco case. Ditto a 1980 law designed to be sure that the government's Medicare program isn't paying things that should have been picked up by private insurance. In a statement today, one of the companies being sued, Philip Morris, called the ruling a "big step in the right direction." The federal judge, however, did allow the government to keep after the tobacco industry using the federal racketeering law, or RICO. Richard Daynard is a law professor at Northeastern University and chairman of the Tobacco Product Liability Project.

Daynard: "The RICO claims are much more sweeping than the Medicare reimbursement claims. The RICO claims are for the ill-gotten gains that the industry has gathered since 1953, since the alleged conspiracy began. So, you almost five decades of claims there."

The tobacco industry argues the racketeering claims are also without merit, but Daynard believes this is not a time for the companies to celebrate.

Daynard: "I think this gives the government the power to basically clean out the assets of most, if not all, of the tobacco companies. The government attorney who argued the motions to dismiss indicated that they probably wouldn't fully exercise that power, but it certainly gives the government tremendous power to deal with this industry and bring them to heal for the first time, perhaps, ever."

Philip Morris shares rose 4.1 percent. RJR Tobacco gained 1.75 percent.

If the weather doesn't work for you, one way to create a common bond with a stranger is to commiserate about the state of air travel, which got particularly ugly during the summer travel season. Consumer complaints to the Department of Transportation have jumped 60-percent so far this year. There was a hearing on this in Washington today and Marketplace's John Dimsdale was there.

Dimsdale: "This being an election year, politicians want you to know they feel your pain."

Shuster: "We've had the worst summer ever with delays. Something should be done. And the good news is that help is on the way."

Dimsdale: "House Transportation Committee chairman Bud Shuster of Pennsylvania is referring to a $40-billion infusion of cash for new airport gates, runways and radar equipment for the air traffic control system, which kicks in October 1st. Supporters say better radar will reduce weather-related delays and increase the useable airspace. Airport improvements will expand capacity to meet the soaring demand generated by the booming economy. But critics, like Oregon Democrat Peter DeFazio, say spending the government's money only bails out airlines which continue to over-schedule flights at peak hours and rake in profits while taxpayers foot the bill for better infrastructure."

DeFazio: "The airlines are driving this. And they're driving it in a way that has huge, billions of dollars of public costs in terms of new construction. And billions of dollars in costs to their passengers with delays."

Dimsdale: "Airline presidents at today's hearing respond they're already spending billions on airport and equipment improvements. They put most of the blame for the summer's congestion on bad weather, outmoded air traffic control equipment and labor slowdowns at United Airlines. Committee members called on the airlines to give ticket agents and fliers better information about flight delays, and encouraged more use of regional airports or abandoned military airfields to keep passengers moving. In Washington, I'm John Dimsdale for Marketplace."

Saudi Arabia today announced an outright ban on Firestone tires, the first country to take such a dramatic step since a global controversy erupted last month over scores of deaths linked to Firestones installed on Ford Explorer SUV's. Also today, Ford announced new Explorer buyers would get a choice of tires: Firestone or Michelin. When it comes to tires, crisis, as we know, can also be the mother of invention, as Bob Moon reports.

Moon: "Out here in the scenic Marketplace studios courtyard, David, next to the Harbor Freeway. Just checking the tires… 30 psi... That one's a little low. You know, I've got a great idea: What if you took one of these little electronic tire gauges, attached it to your tire somehow, and beamed the readout to your dashboard. Pretty cool, huh?"

Mount: "Bob, essentially we've done that at SmartTire. We manufacture a tire monitoring device that will give you a readout on your dashboard."

Moon: "It would fit right here on the dash. In fact, given all the attention tire troubles have been getting lately, turns out more than one company is rushing to get its products into the marketplace. Robert Mount is with a Canadian company called SmartTire Systems, which is just hitting the market with a wireless sensor that straps around the wheel and sits inside the tire."

Mount: "As the vehicle begins to move, it trips a centrifugal switch. A dash-mounted receiver picks up the signal and tells you what your tire pressure is."

Moon: "This kind of thing's been around for years on semi-trucks. And it seems pretty common-sensical."

Mount: "You get a Cadillac, and it tells you if your trunk lid's ajar, if your fuel-filler door is ajar and everything else. But the one thing that keeps us attached to the road is the tires."

Moon: "Of course, that relic once known as the service station attendant used to take care of this for us."

Shore: "Self-service is what brought a lot of these problems on, because people just don't have their tires checked anymore, and they don't realize the importance of it."

Moon: "That's Bill Shore of Fleet Specialties here in the LA area. He helped design the New Tire Sentry, another kind of sensor you can easily install."

Shore: "It's about as big as your thumb. It screws right on the valve stem, and it replaces your existing valve cap."

Moon: "And it's wireless, straight to your dashboard. They tell me these two competing systems should both retail around $300. If they catch on as a mass-market item, expect that price to go much lower. And conceivably, carmakers could see the value of making these things standard equipment, especially if it helped put some liability on the driver. Of course, you can always use one of these little handheld electronic gauges. Picked this one up an auto parts store for six bucks. You could afford it if your life depended on it. I'm Bob Moon for Marketplace."

Let me tell you about the stock market today. The Dow went up 1.8 percent or 195 points. I called around and here's what's going on. The end of the financial quarter is tomorrow and a lot of money managers loaded up on brand name Dow stocks to make their portfolios look good. Also, Proctor and Gamble is reanimating itself after its disastrous profit news in March. P&G gained 8.2 percent. The Nasdaq after five down sessions in a row rose 3.33 percent today. More details when we do the numbers.