Last Thursday’s report that Amazon has obtained wholesale pharmacy licenses in 12 states has caused a ripple in the healthcare field. Public records indicate that Amazon’s ambitions may include distribution of medical devices. First alleged in May, Amazon’s entry into the pharmaceutical industry would be its second attempt into retail pharmacy. Amazon previously owned 40% of the unsuccessful online pharmacy company, Drugstore.com.

CVS Health is vulnerable to Amazon’s move on both the retail pharmacy and pharmacy benefit manager areas. Unconfirmed reports have surfaced that CVS has submitted a bid to buy Aetna, the third largest U.S. health insurer. A joint CVS-Aetna is expected to leverage patient data to manage healthcare costs, whether in drug price negotiations or customized health plans that encourage use of lower-cost clinics. As a defensive measure, a joint CVS-Aetna would help CVS recover its stock price, which has dropped amid speculation of Amazon’s entry into the healthcare field. Meanwhile, Aetna’s revenue has been affected by Obamacare policies and the company expects to lose $200 million this year. An industry-wide health insurance tax of 3% is expected to affect profits for 2018.

Analysts have noted that Amazon’s move into pharmaceuticals is expected to most affect retail pharmacy chains like Walgreens Boots Alliance, CVS Health Corp., and Wal-mart Stores Inc. However, Amazon has not previously entered into a regulated market and without readily available assets to purchase, building out pharmacy capabilities may prove to be a challenge for Amazon.

Previous reports have indicated that Amazon was hiring an internal pharmacy benefit manager to serve its 128,000 employees. These managers often negotiate with drug makers to obtain discounts and also help patients save by converting them from name brand versions to generic versions. Amazon’s technology and experience in purchasing and inventory management may give them an advantage and eventually serve as a platform when the program is expanded and added to the plethora of other goods and services offered by Amazon.

Express Scripts Holding, the largest standalone pharmacy benefit manager, sees potential in partnering with Amazon. The company indicated that it saw no threat to its business that sold pharmaceutical drugs to cash-paying customers. Most people are guided in their pharmaceutical drug purchases by their insurance plan coverage and such strategic partnerships may be vital for Amazon to enter this market. Regardless of how this plays out, Amazon’s entry is likely to shake up the pharmaceutical drug distribution business.

CVS and Aetna First Signs of Amazon’s Effect on the Pharmaceutical Industry (PDF)

In the face of the increasing economic, cultural, and political influence of big tech companies, there is a growing sentiment that the ‘Frightful Five’ (Amazon, Apple, Facebook, Google, and Microsoft) need stronger government regulation.

When you consider Facebook’s recent revelation that Russian entities purchased ads to influence American political opinion and myriad examples of the use of social media to radicalize individuals, it is becoming increasingly clear that big tech firms have created the means to do immense harm, all the while still raking in immense profits. British Prime Minister Theresa May and the EU feel that “enough is enough” when it comes to the freedom of big tech companies, but does Washington feel the same?

One New York Times author, Farhad Manjoo, writes that it is unlikely that the growing cultural influence and marketplace dominance of big tech companies will be effectively combated by Washington lawmakers. These companies’ increasing political clout and a lack of consensus among representatives of Big Tech’s potential harms are two main reasons many argue Washington will be unable to curtail the power of Big Tech.

Even if the legislature mobilizes against tech companies, the methods further complicate the issue. Lina M. Khan, a fellow at Open Markets Institute (a liberal think-tank that opposes concentrated corporate power), argues that our antitrust laws are out of date. Because antitrust legislation is focused on punishing corporations for unfair prices, tech companies (who typically offer their services at little or no cost) are overlooked by regulation. Khan suggests that modernization of our antitrust laws could be an effective solution.

On the other hand, EU lawmakers are demonstrating a willingness to crack down on big tech companies, using both current and future legislation. After fining Google $2.7 billion in June for violating European antitrust laws, regulators have also chosen to implement new privacy laws to combat tech companies’ misuse of consumer data. Beginning in 2018, EU data protection authorities will be permitted to slap fines of up to 4 percent of a company’s worldwide revenue for violations of new privacy rules approved by the European Parliament.

A unique solution is to regulate tech firms like utilities. This method would treat the Frightful Five like monopolies that provide essential services. In this scenario, users would not only be given more control of their information by retaining the choice of whether to sell their personal data to advertisers, but would also profit by providing advertisers with access to their information.

Though big tech companies have generally experienced tremendous freedom from government oversight thus far, legislatures around the world, recognizing the cultural, economic, and political implications of allowing tech companies free reign, are trending towards imposing control on how big tech companies influence our society. Whether through antitrust legislation, privacy laws, or more creative alternatives, tech companies should prepare to brace themselves for stricter regulation.

Privacy, Antitrust, or Utilities Finding the Best Way to Regulate Big Tech (PDF)

Johnson & Johnson currently faces suits from 4,800 plaintiffs nationwide alleging that its talc-based products cause ovarian cancer. The women claim that for over three decades, Johnson & Johnson ignored studies linking its talc products to ovarian cancer.

On October 17th, the Eastern District of Missouri reversed a $72 million verdict against Johnson & Johnson. The court ruled that Missouri did not have jurisdiction over the claim brought by Jacqueline Fox, an Alabama resident, in light of a recent Supreme Court ruling in a case involving Bristol-Myers Squibb Company limiting where injury suits can be brought. After the reversal, shares of Johnson & Johnson rose 3.2 percent.

The plaintiff, Jacqueline Fox passed away in 2015 from ovarian cancer, four months before the trial began. She used Johnson & Johnson products for more than 35 years. The Fox family is now considering an appeal. Many of the cases against the company were filed in Missouri by out of state plaintiffs, and are now facing jurisdictional questions as well in light of the recent Supreme Court ruling.

Johnson & Johnson won a similar case in California on October 20th, when a Los Angeles court reversed a $417 million award for plaintiff Eva Echeverria. The court granted a new trial, saying that there were errors and jury misconduct in the previous trial. The judge also ruled that there was not enough evidence that the company had acted with malice, and furthermore, held that the award in favor of Echeverria was excessive. Echeverria’s attorney also plans to appeal the decision.

Johnson & Johnson Wins Reversals in Ovarian Cancer Cases (PDF)

On Monday, October 23, the office of New York Attorney General Eric T. Schneiderman launched an investigation into the Weinstein Company. Mr. Schneiderman’s inquiry into the working conditions at the Weinstein Company is at least partially designed to determine if sexual harassment, abuse of power, or any of the other number of claims leveled against Weinstein Company co-founder, producer Harvey Weinstein, are or were present in the environment or policies of the Weinstein Company.

In a statement on Monday following the submission of a subpoena to the Weinstein Company, Mr. Schneiderman said that “no New Yorker should be forced to walk into a workplace ruled by sexual intimidation, harassment, or fear. If sexual harassment or discrimination is pervasive at a company, we want to know.”

In the interest of this objective, the subpoena’s content focuses particularly on the Weinstein Company’s hiring and termination practices. Many commentators suggest that the Weinstein Company may have granted preferential treatment to young women in the initial hiring process, only to later terminate them rather than field their complaints. Similar theories are being proposed as to the subpoena’s focus on casting criteria.

The New York Attorney General office’s probes into the extent of the Weinstein Company’s knowledge of any abuses, comes amidst a firestorm of contentions that Mr. Weinstein’s behavior was an open secret in the film industry. Hollywood icons, like actresses Meryl Streep and Dame Judi Dench, suggest it was well known among film industry insiders that Mr. Weinstein was prone to sexual harassment.

The Weinstein Company is already beginning to see itself named on lawsuits along with Mr. Weinstein as the scandal concerning nearly three decades of alleged sexual harassment unfolds. Moreover, the Weinstein Company’s already precarious financial position in the beginning of October has become increasingly dire. Mr. Schneiderman’s investigation is only the latest in a series of disastrous events for the company. These events include the resignation of nearly all of the Weinstein Company board of directors and the cancellation of some of its most valuable deals.

The lone stream of capital from Thomas Barrak’s private equity firm, Colony Capital, seems to be the sole source of financial aid for the Weinstein Company. The credit comes amid rumors that Mr. Barrak will be the buyer when what remains of the company is sold.

Weinstein Company Under Investigation by New York Attorney General’s Office (PDF)

Businesses who take on unpaid training interns or participants under job shadowing programs may want to take notice of this ruling from the Eleventh Circuit Court of Appeals, which indicates that it is possible for those participants to be entitled to wages under the Fair Labor and Standards Act.

Scott Axel was having trouble finding work. His father worked as a wholesaler at an auto dealer and persuaded his employer, Fields Motorcars, to bring his son in as a training intern. For fifteen months, Scott Axel shadowed his father on the job, but his activities took a turn when he took on retail and sales tasks, such as posting cars for sale on social media and auction websites.

The plaintiff’s father’s employment with the dealer was terminated and as a result, Axel’s training activities ended. He sued under the Florida Labor Standards Act (FLSA) and the Florida Minimum Wage Act (FMWA), estimating that over his fifteen-month tenure, he worked over sixty hours per week without pay.

The district court granted summary judgment in favor of Fields Motorcars. Upon appeal, the Eleventh Circuit Court of Appeals vacated the summary judgment ruling for the defendant and remanded the case to the district court. The Court of Appeals noted that Axel’s activities were sometimes consistent with the activities of an employee, and other times a trainee.

While the Eleventh Circuit concluded that it did not have enough information about the plaintiff’s time spent on his father’s work (wholesaling tasks) or retail tasks under the supervision of other employees, the court noted that the proper outcome was not necessarily an “all or nothing” determination.

The circuit court’s ruling poses a cautionary tale for businesses that may consider offering unique training opportunities as part of their business. Here, the circuit court suggests that depending on the activities performed by a person who is an informational intern, a job shadower, or a trainee, those activities could entitle a person to wages under the FLSA or state minimum wage laws.

Is a Training Intern Entitled to Wages under the FLSA The Eleventh Circuit Court of Appeals Says Maybe (PDF)