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Brainstorm Health: Shrinking Middle Class, Drones Flying Vaccines, Altria Juul Stake

Hello, Dailies! Today, I am commandeering these pages back from Sy, our wise and gifted steward, who has done such a terrific job informing and enlightening the Brainstorm Health faithful these many weeks. (Sy will be back at the helm tomorrow, and then Brainstorm Health Daily is taking a delightful two-week holiday break. We’ll be back in action on Monday, January 7. It would be a great experiment to see how long each of us can suspend reading any form of email in these wonderful waning days of the year. Consider this a challenge and write us in the New Year to tell us how long you lasted.)

I’ve grabbed the wheel this morning to highlight what I think is one of the most important editorial packages Fortune has done in some time—our January 19 cover stories on America’s shrinking middle class. We’re giving online readers a preview today, and releasing other pieces over the next several days. Please take a moment, if you would, and read the introduction and Part One of the package here.

As I write in my Editor’s Letter for the January issue (which you can read here), this was an extraordinary effort that fused together the talents, insights, and passions of 51 writers, editors, designers, photographers, illustrators, graphic and video artists, and more—all of them guided by Fortune Digital Editor extraordinaire, Andrew Nusca.

The message of this package is a simple one at heart: Even as the economy has expanded and median income has risen, a surprisingly large swath of Americans have felt like they’re falling further behind. I’ll let the smart and thorough reporting of the cover package reveal the details, but the conclusion shouldn’t be glossed over by either business leaders or policy makers. It will be very hard to sustain robust long-term growth—and a truly higher standard of living for the vast majority of Americans—unless and until we deal with some of the key structural issues that are straining millions of households today.

One of those “structural” issues noted above is the profound burden of health care costs in this country—an ever-growing investment that, quite frankly, is not paying off as well as it should.

We’ve been thinking about that A LOT lately as we put together the agenda for our fourth annual Brainstorm Health conference on April 2-3, 2019. The question, as my co-chairs Arianna Huffington and Dr. David Agus have been framing it—and trust me, you could not ask for two more brilliant, generous, and indefatigable partners to build anything—is: “What is health’s bottom line—and how do we improve it?”

Arianna, the CEO of Thrive Global and legendary founder of the Huffington Post, whom I regard as the Divine Disrupter—part holy woman and part technology guru—has been leading us to think about the “upstream” forces that are shaping our health needs and consumption. Dave Agus is, as Brainstorm readers know well, a top-of-the-heap cancer doc, multi-titled professor at USC and founding director of the Lawrence J. Ellison Institute for Transformative Medicine—and when he’s not writing New York Times bestsellers (three of them), is a health correspondent for CBS. Still, the dude has found time to guide us to the coolest technologists, entrepreneurs, shaker-uppers, and more across the medical landscape.

Our 2019 conference, I have to say, is going to be our best yet. Here is just a smattering of confirmed speakers, in alphabetical order: Albert Bourla, Incoming CEO of Pfizer; Bruce Broussard, CEO of Humana; Dr. Toby Cosgrove, Executive Advisor at Google Cloud Healthcare and Life Sciences; psychologist and author Dr. Lisa Damour; Amy DuRoss, CEO of Vineti; Marcie Frost, CEO of CalPERS; Mindy Grossman, CEO of WW; Dave Hodgson, CEO of Project Ronin; Mei Mei Hu, CEO of United Neuroscience; Dr. Jaewon Ryu, Interim CEO of Geisinger; Camille Samuels, Partner at Venrock; Shyam Sankar, Director at Palantir Technologies; Scott Serota, CEO of Blue Cross Blue Shield Association; Marvelle Sullivan Berchtold, Managing Director at JP Morgan Chase; Dr. Eric Topol, Director & Founder of Scripps Research Translational Institute; and Bernard Tyson, CEO of Kaiser Permanente.

We’ve also got a brand new academic partner this year: Stanford Medicine, led by its trailblazing dean, Dr. Lloyd Minor. (And, as anyone who has been to a previous Fortune Brainstorm Health can tell you, we’ve got a bunch of exciting surprises in store, too. Check out our previous conference highlights to get a hint.)

The gathering, out of necessity, is invitation-only. (I’m sorry—I wish we could open the doors to everyone—though we will put as much of it as we can online.) That said, if you want to apply for an invite, please feel free to do so here. (There’s a registration form you’ll have to fill out—and, yes, a fee.) We’ll be at the glorious Grand Del Mar in San Diego.

Or drop me a line and let me know.

Have a wonderful holiday, everyone, and I’ll be back with a few more thoughts in the new year.

Clifton Leaf, Editor in Chief, FORTUNE


Drones are being used to deploy vaccines. I’ve previously reported on the promise of drone technology to deliver medical assistance in hard-to-reach regions. NBC News highlights how this is already becoming a reality; in fact, the outlet reports, a one-month-old baby in the remote Pacific island of Vanuatu became the first person in history to have a vaccine delivered via the use of a commercial drone. Drones hold special promise in this sector because of the restrictions associated with vaccine delivery—they have to be preserved in certain temperatures and survive what can be perilous land journeys to their destinations. The project was facilitated by Australia’s Swoop Aero and the local governments. (NBC News)


Pharma’s ROI continues to crater. It’s no secret that big pharma’s return on investment has been absolutely dismal over the past decade. Deloitte pegged ROI at the 12 largest biopharma companies at a meager 3.2% in 2017. Well, here’s some bad news: Things aren’t getting any better. Deloitte’s latest report on the subject finds that pharma R&D returns sunk to a nine-year low in 2018—just 1.9%. “The increase in average cost to develop and win marketing approval for a new drug is behind the declining returns,” says Deloitte. (Deloitte)


Altria claims massive stake in Juul e-cigs. Marlboro maker Altria reportedly snatched up a 35% stake in e-cigarette maker Juul, even while the latter firm faces strong regulatory headwinds amid accusations of unsavory marketing tactics that target teens. The $12.8 billion deal would give Juul a $38 billion valuation (and will give Altria a much bigger say in how the company goes forward). Tobacco manufacturers have seen the writing on the wall regarding the future of combustible smoking products (spoiler alert: It’s not good) and are elbowing their way into this space. (Fortune)


The Shrinking Middle Classby Fortune Staff

Fed Rate Rise Strips Global Markets of All Christmas Cheerby Natasha Bach

These Holidays, A Reminder That the Health of the Many Depends on the Health of the Fewby Sandro Galea

Coinbase to Pay Users to Try Crypto Assetsby Jeff John Roberts

Produced by Sy Mukherjee

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