Game over.

MARKETS

• U.S. markets: The Dow held onto its longest win streak since late last year. Markets reacted to the president's comments on drug pricing (more on that later) and weaker than expected inflation results.
• Crypto: With several blockchain-focused events happening in NYC this week, crypto bulls are looking for Bitcoin to get a boost.

PHARMA

Trump Releases Plan to Lower Drug Prices

On Friday, President Trump released a "blueprint" of more than 50 proposals to try to make out-of-control drug prices more...in control.

Keyword: "Try." Because before we dive in, here's some important context from a NYT healthcare reporter:

So why are drug prices so expensive?

Here's one reason: When a pharma company debuts its new, blockbuster treatment, it receives exclusive control of the market for years. This policy was supposed to promote risky R&D spending, but now it just allows companies to set any price they want...and then use a variety of tactics to maintain their monopolies.

Then there's the dizzying supply chain: Drugmakers, insurers, and middlemen like pharmacy benefit managers (PBMs) all contribute to put greater pressure on consumers' wallets.

So how does Trump propose lowering prices?

Here are just a few of the ideas:

• Consider ways to make that dizzying supply chain more transparent, potentially by eliminating rebates and discounts negotiated by PBMs.
• Force drug companies to reveal list prices in advertising ("Side effects could include nausea, heartburn, and a $50,000 check").
• Outlawing a gag rule that "punished pharmacists for telling patients how to save money," according to Trump.

How did the industry react?

Like they just swallowed a happy pill.

• Merck shares rose 2.8%
• CVS Health jumped 3.2%
• Express Scripts finished up 2.6%
• The Nasdaq Biotechnology Index increased 2.7%
• Anyone got another synonym for "increased"?

The main takeaway: Pharma companies and PBMs don't see any real threat to their bottom lines in what Trump proposed. Some of his more industry-threatening campaign promises (like having Medicare directly negotiate prices) did not find their way into the blueprint.

So what happens now?

Well, nothing immediately. Some of the proposals will require congressional action (good luck during an election year), while other initiatives need input from stakeholders before anything is solidified.

So hang tight, because as Health and Human Services Secretary Alex Azar says, it's going to take "months" before anything meaningful happens.

TECH

The President Offers a Lifeline to ZTE

Chinese smartphone maker ZTE—the U.S.' fourth largest seller that (ironically) most of us have never heard of—is turning into the ultimate case study on U.S.-China business relations.

Refresher: Last month, the U.S. said, ‘Sorry ZTE, but American firms will no longer supply you with parts or services until 2025.' Why's that? Because the company allegedly violated sanctions by selling parts to Iran and North Korea. Then? It lied about reprimanding the employees responsible.

Here's the thing: It's all fun and games until your suppliers cut you off. ZTE almost immediately stopped its main operation, leaving its 75,000 workers scratching their heads.

The Crew's take: Feels like President Trump's got ZTE right where he wants it—with leverage to negotiate as the U.S. cracks down on Chinese companies.

GAMING

GameStop's CEO Signs Off

In honor of Arrested Development coming back for Season 5, GameStop's brand new CEO said, 'I've made a huge mistake.' After only three months on the job, Michael Mauler stepped down, leaving the struggling video game shop to fend for itself.

Which is no small task: The traditional gaming industry has been uprooted by downloadable content and microtransactions (i.e. that time you bought yourself a new glider in Fortnite). And at this pace, GameStop's future could be destined for the same sad fate as Blockbuster—with only a handful of Alaska stores and a Twitter feed of nostalgia.

• Acting CEO and co-founder Daniel DeMatteo is staying positive. The company has been diversifying from its core offering by branching out into different types of tech hardware.
• But some analysts see that as just kicking the can down the road: "Investors like stability and continuity and GameStop is anything but."

Bottom line: Shares are down 48% in the last 12 months.

PROXY

Xerox's Proxy Fight Is Giving Us Whiplash

No one told Xerox Sunday nights were for meal prep and HBO: it agreed to a major settlement with two activist investors, Carl Icahn and Darwin Deason, who collectively own 15% of the company.

What'd it agree to? It backed out of its $6.1 billion deal with Fujifilm (blaming a delay in receiving audited financials), overhauled its board, and sent CEO Jeff Jacobson packing—for the second time.

Remember, it was only two weeks ago when it seemed like a similar settlement had been reached...but in a chaotic series of events, the agreement fell apart and Jacobson kept his job. Well, until now.

But for Icahn, it's a happy ending: "We are extremely pleased that Xerox finally terminated the ill-advised scheme to cede control of the company to Fujifilm...With that behind us and new shareholder-focused leadership in place, today marks a new beginning for Xerox."

CRYPTO

Is Facebook Getting into Crypto?

Is this...is this a joke? Apparently not.

While details are thin, Facebook does look to be jumping into the thick of it (per Cheddar), potentially creating a crypto for payments across its platform.

At the very least, it told The Verge, "Like many other companies Facebook is exploring ways to leverage the power of blockchain technology. This new small team will be exploring many different applications."

Bottom line: Bitcoin might've fallen below $9,000 last week, but Facebook rolling up its sleeves is a BIG vote of confidence for the industry.

CALENDAR

CALENDAR

Monday: CoinDesk's Consensus conference kicks New York's "Blockchain Week" into high gear

Tuesday: Ramadan begins in the evening; Earnings (Home Depot)

Wednesday: Earnings (Cisco)

Thursday: Paul Ryan's deadline for a NAFTA deal; Earnings (Walmart, Nordstrom, Manchester United)

Friday: Earnings (AstraZeneca, Deere & Company, Campbell Soup)

Have a great week!

WHAT ELSE IS BREWING

• David Tepper, the billionaire hedge fund manager, is reportedly the front-runner to buy the NFL's Carolina Panthers.
• AT&T CEO Randall Stephenson said hiring Michael Cohen for insights into the Trump administration "was a big mistake."
• Uber isn't making much headway in its search for a CFO (WSJ).
• Symantec, a cybersecurity firm, lost a third of its value after it disclosed an "internal audit."

BREAKROOM

PRODUCTIVITY TIP
Make your bed—Navy Admiral William H. McRaven famously said, "If you want to change the world, start off by making your bed." If that feels too simple, good. That's the point. McRaven argues that by completing the day's first, albeit simple task, it only compels you to complete more tasks throughout the day.

TRIVIA
With what product did the term "brand name" originate?

(Answer located at bottom of newsletter)

Breakroom Answers