"These states will bend over backwards to give them the farm-and the land the old farm was on." -- Kim Hill of the Center for Automotive Research, on incentives Southern states give to carmakers like Kia Motors, which will build its first U.S. plant in Georgia, as reported by The Washington Post
It may not sound like an item at the top of the corporate wish list. But both the Los Angeles and San Francisco Chambers of Comm-erce are supporting an initiative on the California ballot to tax the rich and finance free, voluntary public preschool for all the state's 4-year-olds.
Proposition 82, which recently got the 600,000 signa-tures needed to put it on the June ballot, would raise $2.4 billion a year from a 1.7% surtax on incomes of the Golden State's richest 1% -- individuals earning more than $400,000 and couples making more than $800,000. Says Los Angeles Chamber CEO Russell Hammer: "California is underachieving in education, so we decided not to take a knee-jerk reaction to a tax hike." Studies show that kids who attend preschool -- especially those from low-income families -- are less likely to drop out of high school.
Despite business backing, the proposal faces an uphill climb in the land of Prop 13. Anti-tax groups complain that the initiative subsidizes middle-class families who can afford preschool on their own. If it passes, Prop 82 will make California the latest to join a "universal preschool" movement. Florida, Georgia, and Oklahoma offer preschool classes to all 4-year-olds.
In a report that gives new meaning to the term "universal health care," a RAND study concludes that all Americans -- including the well-heeled and the well-insured -- get lousy medical treatment. Published in the Mar. 16 issue of The New England Journal of Medicine, the study -- part of the largest ever to look at quality of care -- shows that people receive only 55% of the treatments they require. The report doesn't contradict earlier studies showing that minorities, the poor, and the uninsured have less medical access. It measures the quality of care given to those who get in the door. On that scale, families with incomes over $50,000 scored a measly 3 to 5 percentage points higher than those with incomes below $15,000. The insured vs. the uninsured? No difference. The study, funded by the Robert Wood Johnson Foundation, analyzed care given to 7,000 patients in 12 cities from 1996 to 2000. Scores were based on 439 quality indicators for 30 acute and chronic conditions. Preventive care also was assessed. Says Dr. Steven M. Asch, associate research chief for the Veterans Affairs Greater Los Angeles Health Care System and the study's lead author: "Everyone is equally at risk for receiving poor quality of care. No place is safe, and no one is safe."
The past few weeks have been anything but restful for the makers of sleep-inducing drugs. Sanofi-Aventis' (SNY) Ambien has come under attack for prompting some patients to eat in their sleep, or worse, sleepwalk to their cars and cause bizarre traffic accidents. A quieter campaign has been building against rival Sepracor's (SEPR) new drug, Lunesta. In Internet chat rooms, patients gripe about a bitter aftertaste that goes way beyond the "unpleasant" effect mentioned on the label. "Lunesta tastes like a herd of wild animals nested in my mouth," reads one post. Nancy Munroe of Florida, who has taken Lunesta since its launch last year, says: "I've never tasted urine, but I could imagine it would taste something like that."
Lunesta's label says that 17% to 34% of patients in a six-week trial suffered from the side effect. The company declined to comment. A Sanofi spokeswoman said via e-mail that "although sleepwalking may occur," it may not be caused by Ambien. There's a lot at stake. Last year Ambien sales rose 11%, to $1.8 billion. Lunesta brought in $329.2 million in its first few months. With Pfizer (PFE) readying a sleep pill for later this year, these drugmakers have even more reason to lose sleep.
The Chinese enclave of Macau -- an hour's ferry ride from Hong Kong and easily reached from China's other affluent coastal cities -- may soon displace Las Vegas as the world gambling capital. Gaming revenues rose 11% last year, to $5.5 billion. "By 2008 or 2009, we are talking about an $8 billion to $10 billion market," says Grant Bowie, president of Wynn Resorts (WYNN) (Macau). Vegas, now at roughly $6 billion, isn't expecting that kind of growth. Wynn, which will open a $1.2 billion casino this fall, is just one of the big gaming companies flocking to Macau. The draw: high rollers. Average daily take per gaming table is $8,500, almost three times higher than in Vegas.
WHY READ ITBacked by Harvard Law's Berkman Center for Internet & Society, it tracks news blogs globally.
Moroccan blogger Jawad's take on the Dubai Ports World flap: "Globalization is not the sole property of American enterprise. It is called 'globalization' for a reason -- it is why a government-owned Spanish company (Aena) is managing several airports in Mexico; why private foreign companies control some 45% of Algeria's crude oil production; and why private Indian firms are competing for major stakes in the U.S. software industry."
When it comes to pitching drugs to doctors, the thinking goes, the best sales reps are those who are best liked by physicians. That's why Big Pharma closely follows surveys that ask physicians to rate rep effectiveness. Last year just such a poll from GfK Market Measures put Pfizer (PFE) and Merck (MRK) on top.
But popularity may not be the point. TargetRx, a consulting firm co-founded by a former Merck executive, Michael Luby, claims it can identify what really makes a sales rep effective. For the past six years, Luby has conducted his own surveys of physicians, using a computer program that links responses to actual prescribing habits. The results: In marketing to primary-care doctors, Abbott Laboratories (ABT) reps have the most impact; Pfizer and Merck reps rank seventh and eighth, respectively. Some key factors that move a pitch onto the prescription pad: good written material and the ability to describe a drug's target patient.
Surf the Web for vacation spots this summer, and you're likely to encounter an alternative route: a dot-travel domain in addition to the usual dot-com or dot-net.
The new domain became a dot on the e-map last fall after getting the go-ahead from the Internet Corporation for Assigned Names & Numbers, the nonprofit group that coordinates Internet addresses worldwide.
Ronald Andruff, CEO of Tralliance, which oversees the selling of names in the new domain and maintains a registry, says a dot-travel Internet address will signal both authenticity and convenience. Now, consumers looking for "Paris vacation" get back millions of hits, including many repeats. Tralliance checks the credentials of the travel and tourism outfits it registers to be sure they are bona fide groups with rights to the names they wish to use. All of the new domain's Web sites will be listed at www.directory.travel.
Some tourism groups, such as the Travel Industry Assn., won't add or move to a dot-travel address right away. "Dot-com and dot-org seem to work fine," says TIA spokesperson Cathy Keefe.
But heavy hitters such as British Airways, Disney, and the state tourism boards of Utah and Florida have already signed on. The Canadian Tourism Commission will make Canada.travel its primary site this spring. Tralliance says about 21,000 dot-travel domain names have been sold since October, at $100 to $250 a year (compared with $8 to $35 annually for dot-com domain names).
Will consumers keep doing Google (GOOG) searches for "Florida resorts" when they can type in "Florida.travel" instead? For the time being, Dale Brill, chief marketing officer for Florida's tourism arm, Visit Florida, is betting on both domains. "Dot-com is such an established standard," he says. "Nobody can predict how consumers will react."
Convoluted financing schemes are catching up with some hedge fund managers. The latest example: On Mar. 14 three hedge funds and their portfolio manager, Jeffrey Thorp, agreed to pay the Securities & Exchange Commission $15.8 million to settle fraud and insider trading charges in connection with 23 deals involving private investments in public equities, or PIPEs. The SEC says Thorp and the funds -- Langely Partners, North Olmsted Partners, and Quantico Partners -- made more than $7 million in illicit profits from 2000 to 2002. Thorp allegedly used unregistered shares obtained in the private placements to cover short positions, a violation of federal securities laws. The defendants settled without admitting or denying wrongdoing.
The case also is the latest sign that regulators are cracking down on hedge fund abuses of nonpublic information ("More heat on hedge funds," BW -- Feb. 6). Thorp allegedly traded seven stocks in advance of the public announcement of their private sale. "We've been devoting substantial resources to investigations involving unlawful trading practices by hedge funds and others in PIPEs deals, including cases involving insider trading and other deceptive trading schemes," says Scott Friestad, an associate director at the SEC's Enforcement Div. "We're determined to...deter others from engaging in these practices."