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Brainstorm Health: Digital Privacy and the Opioid Crackdown, Novartis Share Buyback, California Soda Tax Ban

Happy Friday, readers! This is Sy.

California has a prominent history as a public health provocateur. The state legalized medical marijuana all the way back in 1996, has pursued stringent environmentally-focused policies (including under Republican governors), and even toyed with classifying coffee as a cancer risk for a hot second (on the latter point, the state’s health department recently recanted).

So a tax on sugary beverages like soda wouldn’t exactly be out of character for local California governments, disagreements about such taxes’ ultimate effect on public health aside. But any cities, towns, or counties looking to put a surcharge on sugary drinks will be out of luck until at least 2030 following the passage of a statewide soda tax ban signed by Democratic Gov. Jerry Brown on Thursday.

Why would Brown, a seeming devotee of aggressive public health measures, put his signature on such a bill—and why would the overwhelmingly like-minded California state legislature approve it in the first place? The answer: A successful, no-holds-barred campaign by the beverage industry and its supporters to nix even the possibility of local soda taxes in exchange for standing down on a controversial tax-related ballot measure.

Here’s what went down, as the Sacramento Bee reports: Major beverage companies like Coca-Cola, PepsiCo, and their trade organization the American Beverage Association backed a ballot measure in California that would have made it extremely difficult to raise local taxes and fees for any reason whatsoever (including non-beverage-centered taxes). The measure would have forced supermajority, rather than simple majority, votes to implement new local and state taxes or raise existing ones. Now that the industry-backed legislation barring soda taxes has passed, the popular referendum measure’s supporters have agreed to pull it from the ballot.

The prospect of such a ballot initiative concerned local government officials who said their revenue-raising capacity would have been hamstrung by the measure, potentially stunting new social programs or any sort of project that required more tax revenue, including balancing budgets.

That’s a sentiment that Brown echoed in a statement following his signing of the bill, which came together in just a matter of days.

“Mayors from countless cities have called to voice their alarm and to strongly support the compromise which this [soda tax ban] bill represents,” Brown wrote, adding that the inability to raise revenue “would be an abomination” for local governments.

“For these reasons, I believe Assembly Bill 1838 is in the public interest and must be signed,” said Brown.

The beverage industry had asserted that their proposed ballot referendum was meant to prevent unfair tax hikes. Its opponents saw it in a very different light.

“This industry is aiming a nuclear weapon at government in California and saying, ‘If you don’t do what we want we are going to pull the trigger and you are not going to be able to fund basic government services,'” said Sen. Scott Wiener of San Francisco, a city with an existing soda tax, according to the local KCBS outlet. Wiener was one of the few lawmakers to vote against the bill banning soda taxes.

Fortune has reached out to the American Beverage Association for comment on the issue. We’ll include an update if it responds.

A handful of cities with existing soda taxes will be able to maintain them going forward, including San Francisco. But any other locales considering such measures will be barred from doing so for the next 12 years.

Read on for the day’s news, and enjoy your weekend.

Sy Mukherjee


Electronic databases play a major role in the opioid abuse crackdown. Politico’s Darius Tahir is out with a fascinating report that sits at the corner of two hot button issues: Privacy and the opioid epidemic. Tahir explains that electronic databases are increasingly being used as a tool to crack down on opioid drug abusers and those who might facilitate their habits alike—but the increasing focus on the former has some civil rights and medical groups concerned. “[These systems] were designed to find those bad doctors—and that kinda shifted at one point to also find those bad patients,” says Corey Davis of the Network for Public Health Law. (Politico)


Novartis’ Vas Narasimhan is leaving his mark. On Friday, drug giant Novartis announced that the company will spin off its oft-struggling eye care unit Alcon and launch a $5 billion stock buyback program. Both of those moves are expected to close in 2019; but, on a larger level, they represent Narasimhan’s desire to get back to the basics of prescription drug development at the company. From a business perspective, Alcon hasn’t exactly been a golden child for Novartis, and the spin off may net just $20 billion to $30 billion (as opposed to the cool $52 billion Novartis paid for it back in 2011). (Fortune)


FDA: Dirty water caused the romaine lettuce outbreak. The Food and Drug Administration (FDA) is providing some new details on what may have caused the nationwide romaine lettuce E. coli outbreak this past spring. One potential culprit? Dirty water. “To date, CDC analysis of samples taken from canal water in the region has identified the presence of E. coli O157:H7 with the same genetic fingerprint as the outbreak strain,” said the FDA in a statement. “Analysis of additional samples is still ongoing, and any new matches to the outbreak strain will be communicated publicly and with industry in the region.” (NBC News)

The WTO calls foul on big tobacco-producing countries. The World Trade Organization (WTO) is dismissing claims by heavy tobacco-producing nations like Cuba, Indonesia, and Honduras that Australia had broken international free trade agreements by implementing plain-packaging laws for tobacco products back in 2012. (Plain packaging is the kind that, well, might not make cigarettes and other such products look particularly sexy or appeal to younger people.) “The ruling clears another legal hurdle thrown up in the tobacco industry’s efforts to block tobacco control and is likely to accelerate implementation of plain packaging around the globe,” the World Health Organization (WHO) said in a statement. (Fortune)

Federal judge blocks Kentucky’s Medicaid work requirements. In a ruling likely to be the first act in a long-running, and contentious, policy story, a federal judge has blocked a Kentucky law that would force low-income Medicaid beneficiaries to work in order to continue receiving health benefits. The Trump administration has been overwhelmingly supportive of the work requirements; opponents (as well as several independent health care organizations) say they are discriminatory and will likely lead to significant coverage losses. (Washington Examiner)


Facial Recognition Used to Identify Capital Gazette Shooting Suspectby Don Reisinger

A New Data Breach Scandal Hits Facebookby Renae Reints

How Red State Politicians Are Reviving Hempby Jeff John Roberts

Labeling GMO Foods Could Be a Hit With Consumersby Brittany Shoot

Produced by Sy Mukherjee

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