Power lunch starts right now. All right. Hi everybody. I am brian sullivan. Happy monday. Heres what else is happening at this hour. Apple sending out invitations to an event it will hold on september 7th, a new iphone, new ipad, new tv . We got to wait to find out. Environmental groups in colorado failing to gather enough support to put two antifracking measures on their ballot this november. And stocks are sitting near session highs as we head deeper into the trading day. Right now the dow is up triple digits. Lets kick things off with bob pisani live on the floor of the New York Stock Exchange with more on what is moving your money on this monday. Bob. And, brian, we got a very broad rally. Lets take a look at the market internals. Whats broad 3to1 advancing to declining stocks been there most of the day. You want to complain the volume is light, its august, the volatility its subdued, 11 or 12 on the vix. But its been there for a while. I want to see some new breakouts on the new high list. Only five on the s p at a new high. I get excited when i see 10, 15, 20 . Were not there yet. Sectors, take a look, big leaders materials, energy, telecom and utility stocks. Generally thats our Leadership Group today, the stuff thats been working throughout the year is whats been moving up. But weve got a new leader too. Financial stocks were laggards all throughout the year, recently have been moving to the upside, and you can see some of the names here. Not just the banks like suntrust or bankcorp, but prudential, whats it all mean . Over the weekend a lot of people think the economys getting better, risks are declining and maybe rates might be higher by the end of the year . Thats the likely explanation. The funny thing about it is if you look at yields on the treasuries, down right across the yield curve today. Kind of hard to reconcile the stock market thinking with the bond market right now all i can tell you a fairly broad rally. Finally september were going in and everybody complains august is lousy and september is worse, but be careful. In president ial Election Years, september is often a lot better than people think. In nonElection Years its true, september is the worst month, 12th out of 12, but in Election Year what were in now it actually ranks 7th out of 12, back to you. Good to point out that outlier. Thanks, bob. Mylan announcing it is launching generic epipens following the backlash over the companys pricing. But the controversy continues. Meg tirrell has the latest details on what they announced today. So pretty surprising announcement coming out this morning from mylan essentially saying theyre going to provide their own authorized generic to the branded epipen. The price will be 300, about half that of the list price of the branded epipen. The socalled authorized generic will be identical to the branded product and it will be whats known as abrated. So that means its so identical, really the same product, that a pharmacist can swap it in automatically when a doctor prescribes epipen. Now, mylans ceo Heather Bresch saying in a Statement Today that because of the complexity and opaqueness of todays branded pharmaceutical supply chain and the increased shifting of costs to patients as a result of High Deductible Health plans, we determined that bypassing the brand system in this case and offering an additional alternative was the best option. Now, of course we know a lot of the criticisms of the system here was that there was no competition to mylans branded epipen and that teva had tried and failed. Now the competition is being provided by mylan itself, which of course is traditionally a generic company. Now the question people are asking though is how much revenue is mylan going to get from the generic version of its own epipen, what kind of hit is this going to have. You can see mylan stock there up more than 1 . Its really been seesawing today as people are trying to figure this out. Literally just got an email from mylan just now from their pr, because theres been some question about this because they mentioned a direct ship program, which is what weve talked about are they going to go around to try to change that cost structure that we had. Thats right. Theyre going to work on that, but they also said this is going to be available in pharmacies, its going to take a few weeks, just like any other epipen and that insurers should push you to that because the Insurance Companies want you to use the generics. But if not, you should ask for it. So mylan confirming just now to us this will be available like the normal epipen in pharmacies. And whats fascinating about this though, analysts are coming out questioning whether this is going to further tweak off, anger the pharmacy benefits managers here, which you know got a chunk of a rebate that mylan had put into place on the branded epipen. So further infighting potentially in the supply chain here. Sure. What about wells fargos analyst put out a note today raising questions about the epipen for Schools Program. And when you read it, he has so many questions about the confusion of who was the distributor, who owns the distributor, what is going on here . Is there yet another round of questions to be asked about the School Program . Well, so davids note coming out this morning was kind of overshadowed in all the epipen news this morning. Sure. What hes doing is raising questions about when you go to the epipen for schools website you see theres a name of another company on there, Bioridge Pharma. And his questions are just surrounding what is this company, who owns it, how does it work. And mylan i want to go to a place that is potentially i dont know whats the word, but as i read it, it reminded me and was it supposed to remind me of valeant and philador. Yes. Which is an explosive question. He does not mention valeant or philador in his note. He is not saying it is similar. He is raising a lot of questions though. So one might wonder whether it is reminiscent. He does not say that. And we did reach out to mylan on this. They gave us a statement saying that their epipen for Schools Program is a mylan program for which Bioridge Pharma provides services, completely unaffiliated entity to mylan and mylan has no ownership stake in the company. You can go to the website to see it works with other companies as well. I think youve pointed this out, meg, but we have to remember mylan has a partner on this, pfizer. This is not just a mylan product. So pfizer is also involved. Theyre the Biggest CompanyPharmaceutical Company in the world. The question now is also as another wall Street Research firm put out, if because this price cut is mylan going to have to look to cut some costs internally if they make less revenue now. But thats a pure stock story on mylan. But were cnbc. Exactly. What are you going to see in the guidance. If generic comes out isnt there potential possibility they could make more on the generic based on the way they get around Distribution Models . This is a fascinatinining question. We have a lot posted on cnbc. Com. If we remember the economics of the supply chain that mylan actually gave us last week. They said they netted about 274 out of 608 list price for the branded epipen. Now, if theyre going to supply a generic epipen at a 300 list price, what analysts are trying to figure out now is does anything else come out of that . How much does mylan net of the generic list price of the epipen . And if its 270 for the branded, could it be more for the generic. A lot of people are raising that question. We dont actually know the answer yet. I think thats why this email we just got that we highlighted its not just the direct channel. Theyre going to try to do that, but right now the Distribution Channel is going to be the same as it was. So you can still get it at your local pharmacy. Sure. And your insurer should push you toward it. Its not just some direct sale. Which in cable they talk about over the top. You can get your hbo over the top, you can get your drugs to you over the top, skip the distribution. I cant imagine pharmacy benefit managers would be happy about this price guide. If the reverse from what we talked about last week, they benefit from increases, they must not benefit from price cuts. Stick around, talk more about one of the great issues of our time trying to fix americas expensive and somewhat broken Health Care System. One manager says the entire system is broken is lawyer and author steven brill, he wrote a book called americas bitter pill, money, politics, back room deals and a fight to fix our broken Health Care System. We bring him in. Steven, you wrote this book before all this stuff were talking about came out. Why do you say the system is broken and has been for some time . Well, it wasnt before all this stuff happened. Its before the press started to focus on it. In this case with epipen there was a salvadi before that. Sitting here listening to you and lets sort of step back for a second because i think this whole thing is a metaphor for how crazy and dysfunctional the system is. You have a company that has said we are selling something for 600. We used to sell it for 100. Its the exact same product. Now were simply going to take the brand name off it, but we promise you its the exact same product and now its going to be 300. It used to be 100, but now its a great bargain at 300 because its half the price of the 600. That is insane. There is no other Consumer Product in this country that works that way. Why has that happened . Only the Health Care System works that way. And why is that . And it happens because we are the only country that doesnt regulate Health Care Prices in some way or another. Do you think that would be a solution to regulate Health Care Prices . Well, its not a hypothetical. Every other country in the world does it and does it successfully, produces Better Health care results and much less expense. Now, if you look at what the epipen product is or what a cancer drug is, it is a patented product which means the government has given it a monopoly. And therefore the Drug Companies are free to charge anything they want. But in this case unlike the patent that you might get on a cell phone or something, this product is used to save your life. Therefore you must buy it. You dont have a choice to say, well, its too expensive, im not going to buy it. Mr. Brill, all of those points have been brought up. Let me ask you about the broader issue of pricing that you so correctly highlight, which is that we pay more here in the United States. And the argument has always been on the other side that if we the United States start to regulate drug prices the way every other advanced economy does, there will be no other country left paying for r d and drug advancement will slow dramatically. And that maybe the answer isnt the United States regulating drug prices just like everyone else but other countries in the world that have very advanced economies actually controlling it less and paying their fair share of the research and development that happens. Well, frankly that point is absurd for two basic reasons. The first is the Drug Companies make a lot of money in all of those other countries. They sell very aggressively. And their Profit Margins are very high. Theyre just not astronomical the way they are here in the United States. And the simple fact is and this is cnbc so you guys can do this, look at the percent that these Drug Companies spend on r d. What they classify as r d on a lot of which actually isnt r d, its a very low percentage. In no way justifies a margins of 80 , 90 . So the price is too high not because of r d. Its too high because here they can charge what they can. The second point is, who signed the United States up to subsidize the r d for the rest of the world . Assuming thats what were doing, which again were not because the r d is not that high. But, you know, why were we signed up to do that . We are the Health Care System unique in the world that is struggling under the cost of health care. Do we need to do more on other Health Care Costs as well . Oh, absolutely. Of course hospital stays are more expensive in the United States as well. But its a harder thing to pinpoint. Well, its not terribly hard to pinpoint. If you look at the p ls of the socalled nonProfit Margins, they have very high margins, executives make 2, 3, 5 and 10 Million Dollars a year. You pay 10 if you have an aspirin in a hospital. You pay 150 for the use of the cuff that goes around your arm when they take your blood pressure. And, again, were the only country that allows that. When you look at, steven, and i posted last week on my Facebook Page the income statements of a number of different players on this chain. A couple of insurers, a couple of pharmaceutical companies, a couple of pbms, because were trying to highlight that the entire chain has been going up. In fact, you just mentioned hospital, so a moment ago i just brought up Tenant Health care, not picking on tenant but tenant isnt even a high profit margin. Look at the nonprofit hospitals. Well, i can only go with my Public Company systems right now on live television. Im doing the best i can. The point is at the end of 2012 tenants revenue has a doubling in about four years. Weve seen that with Insurance Companies as well. Right. You know, weve had this argument before, steven. Last year, a year and a half ago when Gilead Sciences priced the once a day hep c treatment, its what 1,100 per pill. Right. 1,000. A thousand. Huge outrage then. Nothing changed. Is Congress Going to do anything . No, of course not. But lets come back to your point though. The one player in the Health Care Economy whose margins are the lowest are the Insurance Companies. Step back and think of it, theres an obvious reason. Theyre like us, theyre paying bills, theyre not writing bills. They have no control over the prices. Theyre on the receiving end of all the price increases from the hospitals, the device makers and the Drug Companies. Theyre writing bills, steven, i disagree with you 100 right there. Everybodys premiums in america have gone up. Theyve gone up, but look at their margins. Look at United Health cares margins compared to umera or mylans margins. They dont compare. Theres nothing like it. Mr. Brill, thanks. It was provocative. Thanks so much for joining us. Hes got a whole book on the subject. Sure enough. Happy to do it. Thank you, meg. Im sure meg will be around for tomorrow because we have this other big interview to tell you about here on power lunch. Were going to be joined by u. S. Surgeon general vivek murthy at 1 00 p. M. Eastern time. Pretty cool. A new storm, a real physical one developing south of florida. The latest straight ahead. And later, two pilots pulled from a united flight for allegedly being drunk. Why does this keep happening . Power lunch back in two minutes. This just got interesting. Why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. 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Corrections corp. And geo group taking a leg lower, the department evaluating whether the agency should continue to use private prisons which run some of the Detention Centers for migrants. The announcement comes after the justice departments decision last week to phase out contracts with private prisons which send geo group and corrections corp. Stocks sharply lower. Theyre down about 35 or more over the past one month. Just in the past couple of minutes geo group has responded to the department of Homeland Securitys announcement saying its facilities are highly rated and provide high quality Cost Effective services. But we are looking at those