Political corruption that exists in brazil. Tell us how you guys took decades of corruption and synthesized it into this really good piece. We wanted to show that even decades of corruption is actually sentries old in brazil and sort of deal back the layers as of the carwash scandal, which is this latest scandal thats been enveloping brazil. It takes us back to the president before her and its enveloping in the existing president and has the roots in the structure of brazil generally, one of the last countries in western america to have a monarchy that was departed in 1889. But if you go back that far and see the sequence of scandals they have grappled with, its a natural outgrowth of how the government was set up over not just decades, but centuries now. I think when de la rue set when rousseff was ousted, it brought a lot of hope that the carwash scandal was behind them. Thats not the case. When you are looking through this and when your reporters are assessing this, how do they figure out whether we are on the downswing or this is a scandal that keeps going . What are the signs of an end . Carwash is a perfect example of every time you thought the boyle has been carter rise, you are exactly right, people thought it was going to be the sign. You have to look at the magnitude of companies involved. You are talking about the Construction Company that has been at the center of this scandal, as well. It reaches to the very highest levels, but also what we do a good job of showing in this piece is that on a local level, how it stretches and help desk its just a officialdom of life. People can earn in those type of kickbacks they take. My favorite quote is along the lines of, anytime you think you are moving into new brazil, you will likely end up in old gazelle. That summarizes the state of affairs. Its a great story. You have the Company Angle and specific examples of politicians and what they use money for and a good history lesson. Lets shift gears and talk about the cover story because its a fantastic look at what i think is a microcosm of a broader conversation that has really gripped politics and markets for the better part of the last couple years, thats the prices for drugs. Specifically, you guys are looking at orphan drugs. How exciting was it to see the story come together . We are incredibly proud of this story and it reporting that has been done on it. Some of the stuff we have uncovered. They sell this drug that is an orphan drug, drugs that treat very rare diseases. They can be profitable for pharmaceutical companies and we are talking about 500,000 to 700,000 a year per patient. But there are very few people that are affected by this disease that you need the drug for. When you have that model, a conundrum is, its viewed as a wonder drug for people who have taken it, but the kind of the sales tax that has gone in to make sure the market continues to exist are incredible. We opened that story with an anecdote where a doctor, who had taken one of her patients off the drug, got a call from a sales rep while she was still treating the patient, asking white they are taking the patient off the drug. You should keep them on it. Those aggressive sales tactics, in an industry known for aggressive sales tactics, are beyond. Is a lot of great anecdotes, a complex math story behind the pricing as well. We talked to a reporter in bloomfield. You write about the pharmaceutical company, alexi on. Tell us about the company and what are the successful for . They have been around since the early 90s, but they surprised everyone around 2007 when this drug for a very rare disease, so the risk, came out of nowhere and begin a blockbuster, making almost 3 billion last year, a really tiny number of patients. With they have been known for is taking this one drug and making it an enormous success even though it treats a very small number of patients, under 11,000 patients. It also costs a huge amount of 500,000 andn 700,000. Its really only known for that one drug and work big sales even though it only treats rare conditions. In laymans terms, what exactly is the disease and are there other sort of products that service it . Do they have a monopoly on one of the best service for or the best drug . How do they quarter this market . You have two conditions, both of them are having to do with part of the immune system called the complement system. What soliris does is clamp down on that system. There are two systems that they deal with and in both of them, the system goes haywire and starts attacking red blood cells and causes really horrific problems. Before this drug came around, neither of these really had a drug that was aimed at treating it. You had to do things like go on dialysis machines for many patients, whose kidneys failed, or get blood transfusions. There is really nothing else on the market right now im a though are working on things, because there is nothing else that targets this part of that immune system, which is overreactive in both these conditions. This should be a good thing, right . Defined a drug that helps a bunch of people that normally didnt have any other options in terms of treatment. So this should be a good story, but this is a little bit of a twist. Whats going on . Indeed. These are called orphan drugs. They treat a very small Patient Population and for a long time, these Patient Populations were elected. Companies wanted to make drugs that Service People with arthritis or heart disease, that have millions and millions of patients. They can recoup costs, make profit, so its indicative of a good trend, more often drugs being made, however, whats happened is, there has been a lot of stories late as of soaring drug prices. At the forefront is the orphan drug industry. These drugs cost far more than most other drugs and for instance, in the case of soliris, you are talking almost 700,000 per year. And thats every year. A lot of these patients are on this drug for life. Thats more than the cost of a new home. So there is governments around the world that is groaning under the cost of this drug and how do they pay for this . They have to take the money out of somewhere else. There is a lot of tension now between the cost of these drugs and the folks that have to pay for it. Turning the orphan drug store into a cover image was the job of bob vargas. Big story this week, an indepth look at what goes on the pharmaceutical industry. How did you guess process all the information and condense it into in image . After reading the article and how they turned this insane amount for this drug, we were thinking about waste to do it and we wanted to get across that this corporate powers are almost forcing this drug on the people that depend on it. Its actually administered through infusion, so we had this idea of a hand wearing a suit, which is kind of represents the pharmaceutical companies as corporations, squeezing the infusion bag, almost forcing the drug into the patient system. Did you really use a hand model . We did. Which is why it is so well manicured. I always am curious when you feel comfortable enough to go to the Bloomberg Businessweek, its a brand, you want the name act, but you are ok putting the image out there. How come . We do it selectively. In this case, we cover not so much of it that you dont recognize it, but i think our rationale for doing it is that we want the idea to come forward and it gives this effect that we think is nice. Dimensional. Right. I think the text is interesting because its bold in some sense. Theres not a lot of text. The kerning is kind of wide. The photo has a clinical feel and we didnt want to over the text, syndicate simple. Was this pretty much the only idea . Yeah we thought about it for , a little bit for me landed on this, but once we discussed it up, we knew it was the one. The art within the magazine is fantastic as well. There was some concern that people may miss it for the sake of advertising, but because it kind of looks like one of those health ads . Exactly. Next, behind the classic english profession of looking for a barrister. And why rich british expats rome the globe. We will find a certain Brokerage Office angling for their money. This is Bloomberg Businessweek. Welcome back to Bloomberg Businessweek, im carol massar. And im oliver renick. In the futures section, a very english story about an english profession. Clicking for barristers. We talked to our correspondent. S inrk are pronounced the english system, even though they are spelled like clerks. The english legal system is divided between solicitors who, more or less, are the equivalent of attorneys in america. They work at firms. They are due in court. Barristers are selfemployed and they band together in this Organization Called chambers where they share expenses but not profits. And clerks are middlemen. The clerks sell the services of barristers to solicitors. The crux of the piece is it is very unclear who works for who. If you are a barrister i do have a problematic relationship with your clark, it strangles your supply of work. It a complicated power dynamic. As with many things in the u k, social clarks is a big factor. Often from quite upperclass sections of society and clarks are workingclass, so its a professional interaction that crosses social class boundaries and thats why its so fascinating. A layer on top of that, sometimes clarks can make a lot of money and in some cases more than the barristers. It is a very wellpaid job in relative to the formal qualifications you need to have it, you dont really need any. Historically, the clark, chief clark in the chamber is paid 10 of the overall take of the barristers. As chambers expanded, it became unsustainable and was dialed down. Most of them are now on some kind of salary and bonus structure. But at the top end, the amounts paid off considerably. About half a Million Pounds upward. Its a lot of money. Not a bad gig. Theres a pretty wide range there, as well. Where you start out and a lot of these clerks start out very young and they work their way up and become personalities and wellknown figures of their own. What are the skills that make a good clerk . I use a phrase in the story, wheeler dealer, which is a british phrase. The way we used it in the piece was hustler. Oh, yeah, we have both of those here. Didnt you also use the word pimp a little bit . Yes, that came up with varying degrees of irony, yes. Traditionally, its a dynastic profession historically. They would historically come in and after living school, to the chambers. But then they work their way up. They have to sell a commodity and they have to know how much barristers are worth. One of the thing a clerk said to me was that barristers are very bad at knowing how much they are worth and clerks handle money negotiations. So barristers and sometimes all know how much they are being paid, which is a weird situation. That creates this sort of abnegation of response ability. Barristers are proud of their independence. They are selfemployed. Nobody can tell them to tidy their room. Thats a big deal. They even have their power to give their clerks new names in case there is another clark. If you arrived at a junior clerk and someone had the same name is you, you had a new one. Speaking of english, there is a brokerage that has a reputation for going after wealthy british. Their tactics have landed them in the crosshairs of financial regulators. Heres reporter zeke fox. I feel like this is of story coming to a movie theater. But i feel its already been done. All these stories are movies coming soon. They say they are the Worlds LargestFinancial Advisory firm, whatever that means. They have offices all over the world like hong kong, africa, basically anywhere you might find bruce expats with money. Oil workers in dubai. They are there. They hire brits to call other brits and say, never you are offshore, you need to move your money and a save for retirement in this new way. So the World LargestFinancial Advisors have a duty to their clients to do whats best. To some extent, but they werent necessarily doing either. They were operating on the fringe. So what my story is about is that they came to the u. S. A couple years ago. Regulations are much looser. The u. S. Operation from what im told by former brokers, did not comply with u. S. Rules. So they were double dipping, charging both upfront commissions and ongoing advisory fees. Thinks you could get away with in dubai, but dont fly here. So im told that securities and Exchange Commission is now investigating their u. S. Operations. Nigel queen is the guy behind this since he was like 15 years old. Hes been very successful, hes british, founded it after working at another offshore brokerage that collapse. He started in hong kong and opened in offices all over the world. Its a successful formula. Its aided by this loophole in british tax law that allowed people in certain situations to move their pensions to countries like multiand avoid being taxed when they withdrew the money. Sounds too good to be true. Yes, no recommendations here. Im sure its complicated to pull it off, but its better than your average hits. Now the u. K. Government has change that law and made it more difficult, so its restructuring. They havent addressed any allegations that the former employees told me about. What are those allegations . After ive heard about the investigations, i sorted talking to former employees. They did describe a boiler room type atmosphere in the new york office. People were come up some were taking during the office. It was just a party culture, people were making a lot of money. Up next, why President Trump doesnt actually want his budget passed. There is one republican compass medical may be key to getting any kind of deal done at all. Bill cassidy. This is Bloomberg Businessweek. Welcome back to Bloomberg Businessweek. Im oliver renick. And im carol massar. You can also catch us on the radio at series channel 119, and in new york and in 200 in boston, 90 one fm in washington, d. C. , a m naik 60 in the bay area. And in london and asia on the Bloomberg Radio plus at the President Trumps budget isnt expected to get passed congress. But that could be what it white house wants. Peter coy explains. We got a first look at what the budget looks like. Give us the rundown on how both sides of the aisle are reacting and what the hope is to accomplish what trumps are. The budget of course is very ambitious. The concept is that trump inks he can wipe out the entire federal budget deficit and produce a surplus like 2027. At the same time that he raises spending on the military and Border Control and protects the retirement portion of Social Security and medicare. Provide some scope on that. How big of a challenge is that when you talk about wiping out the budget . Its a huge challenge because most people who have looked at the budget said the biggest portions of the spending are interest on the debt, which has to be paid, Social Security, medicare, and the military. Those are all being set aside, written off as being out of bounds, which puts more pressure to do something about the discretionary portion of the budget, which is spending everything on the National Weather service to the post office to the courts and the state department and on and on and on. Its picking away at the tangential things rather than the big buckets of money that need to be addressed . Right. Then the tax side comes. I do think people would say is, if you want to balance the budget, unit might need more tax revenue. When we got that one pager about the trump administrations plan for taxation, they said we will cut rates but get Economic Growth that will get us back to neutral, so we will be revenue neutral. But in the budget i came out this week, they said, we are going to get more tax revenue, which will help us bounce the budget. Republicans may not be able to test any kind of Health Care Reform without the help of one republican smith from louisiana. Republican congressman from louisiana. Heres editor matt phillips. In politics, you guess right about dr. Bill cassidy, first time republican senator from louisiana, shaping up to be a critical vote in the senate, especially when we talk about health get. Health care. Thats right. Lets remember, republicans have 52 seats in the senate, not a big majority. They need 51 to pass anything that Health Care Bill. If conservatives get their way, whatever Health Care Bill would defund planned parenthood, that immediately loses the support of two female senators. Collins and murkowski. That sets up cassidy to the crucial 50th vote with mike pence, the Vice President being the 51st boat. Even though hes not on the working group that is working on the group behind closed doors, this gives him a huge amount of leverage come fairly moderate when it comes to health care of it and they need him if they want to do anything. He has a lot of leverage here. Who is this guy . Where does he come from . Hes a louisiana senator, medical doctor, spent a lot of his career working in a charity hospital. He got into politics after hurricane katrina. It shook him seeing how inactive the government was in taking care of its people. He set up a Medical Center in an abandoned kmart, spent time in the state senate, then went to the house visiting louisiana. He beat Mary Landrieu in toy 14, in 2014, so hes been in the senate for two years. His mission was to do what trump promised on the campaign trail, he wants more health care for everyone and make it so that they can afford it. Thats right. In a politically savvy move, it ties the president to his words on the campaign trail, to lower costs and broaden coverage, which isnt something that the bill that came out of the house does. In fact, it goes extremely in the opposite direction and it probably result in 20 million plus people losing coverage and premiums going up. He said we can do the opposite and he has some plans that are pretty radical in terms of the conserva