Good morning readers. Get ready for a Super Bowl showdown that's the stuff of legends. Super Bowl LVIII promises a gridiron clash between a reigning dynasty and a resurgent powerhouse. The Kansas City Chiefs, with their eyes on a repeat, punched their ticket with a commanding 17-10 victory over the Baltimore Ravens. Meanwhile, the San Francisco 49ers, a five-time champion, staged an epic comeback, erasing a 17-point halftime deficit to claim a 34-31 victory in the NFC championship game. Mark your calendars for February 11 in Las Vegas – it's old school meets new school at Superbowl 58.

Let’s jump into today’s storylines.

In today’s digest:

• Big Pharma sees key patents expire

• Headline Hustle: U.S. troops killed in drone attack near Syria, American Airlines makes hard landing in Maui, countries halt aid to UN agency amid links to attacks in Israel

• Earned Wage Access programs are taking off in the U.S.

• The Week Ahead: What to Expect

• Pulse Points: What’s Trending

HEALTH

Expiring patents are about to hit pharma (and consumers) in a big way

While most industries worry about market dips, Big Pharma is facing its own version of a cliffhanger. The industry is on the verge of a transformative challenge known as the "patent cliff", a scenario poised to reshape pharma’s financial landscape and influence patient access to medications (in a good way).

So what’s a “patent cliff”? It’s a term coined for the impending expiration of patents that guard the monopoly status of leading branded drugs. As these patents crumble, rival companies swoop in to churn out more affordable generic versions, potentially slicing into the revenue pie of the original drugmakers. While this may spell a drop in revenues for these pharmaceutical behemoths, it's a silver lining for patients seeking more affordable treatment options.

It's a game of numbers and nerves

The impact of the patent cliff isn't a one-size-fits-all ordeal. The top 20 biopharma giants are collectively staring down the barrel of an estimated $180 billion in potential sales losses by 2028, as per EY's calculations. Key players like Merck's Keytruda, Bristol Myers Squibb's Eliquis, Opdivo, and Johnson & Johnson's Stelara are all set to lose their exclusivity, but how each company weathers this storm is a matter of strategic finesse and perhaps a dash of governmental intervention.

But not all drugs are created equal. Distinguishing between small-molecule drugs and biologics becomes crucial in this scenario.

• Many of the drugs confronting patent expirations belong to the biologics category, which may not immediately face competition from biosimilars (the small-molecule drugs) – similar but not identical versions of the originals.

• Biosimilars are intricate to develop and manufacture and may not seamlessly replace their branded counterparts, making physicians hesitant to switch patients to them.

To weather this impending storm, pharmaceutical companies are pulling out all the stops — bolstering drug pipelines, forging acquisitions and partnerships, and more. Analysts at JPMorgan anticipate industry sales to remain relatively steady through 2030 as drug pipelines evolve.

Looking ahead…as the patent cliff looms large, the pharmaceutical industry stands at a crossroads. With billions in sales hanging in the balance, companies are adopting varied strategies to soften the impending blow. While the future is filled with challenges, it's clear that adaptation and innovation will be key to navigating this new era in pharmaceuticals.

IN PARTNERSHIP WITH BAY AREA TIMES

Headline Hustle

🇺🇸 Three U.S. troops were killed in drone attack near Syrian border. Three U.S. service members lost their lives while dozens were wounded in an unmanned aerial drone attack on a U.S. military base located near the Syrian border in northeastern Jordan. President Joe Biden swiftly attributed the attack to Iran-backed militant groups operating in Syria and Iraq. This marks the first deadly strike against U.S. forces since the Israel-Hamas conflict began, further escalating tensions in the already volatile Middle East. The attack has led to calls for a strong U.S. response, with some critics questioning the administration's approach to confronting Iran and its proxies in the region.

✈️ American Airlines flight makes hard landing at Maui airport. A flight from Los Angeles, operated by American Airlines, made a heart-pounding landing at Maui's main airport, resulting in hospitalization for five flight attendants and one passenger. Fortunately, all six individuals have been released from medical care, as reported by the airline. Flight 271, with 167 passengers and seven crew members on board, arrived at Kahului Airport on Saturday around 2 p.m. The Federal Aviation Administration is currently probing the incident, with both the airline and FAA maintaining tight-lipped silence regarding specifics.

🌎️ Western nations suspend aid to UN agency amid allegations of involvement in Israeli attacks. Western countries, including the US, UK, Canada, and Australia, have halted aid to the United Nations Relief and Works Agency (UNRWA) following allegations that some of its staff participated in the October 7 attacks in Israel, which resulted in significant casualties. The UK called the attack a "heinous act of terrorism" and, while suspending aid, remained committed to delivering assistance to Gaza. The European Union expressed extreme concern but has not frozen its aid. This move poses challenges for UNRWA, the primary conduit for aid to Gaza during the ongoing conflict.

PERSONAL FINANCE

Payday lending on steroids

In a world where instant gratification is king, millions of American workers are turning to "earned wage access" programs to get their hands on their paychecks before payday. Sounds convenient, right? But hold that thought – this quick cash fix is sparking debates that have some comparing it to the risky business of payday loans.

A movement on the rise

These programs, available both through employer-sponsored models and direct-to-consumer apps, have seen significant growth, with early access amounts reaching $9.5 billion in 2020, a threefold increase from $3.2 billion in 2018.

While earned wage access provides a vital lifeline for users during emergencies, it has sparked concerns within the financial community.

• The fees associated with these programs, often equating to exorbitant interest rates of up to 400%, have drawn comparisons to high-cost debt instruments, notably payday loans.

• The result is a contentious debate over whether earned wage access is merely a convenient financial tool or a disguised form of lending.

Fees related to earned wage access vary, encompassing per-transaction fees, subscription fees, and optional tipping. While industry supporters argue against comparing these fees to traditional loan APRs, critics contend they closely resemble payday loans, a notion that hinges on whether earned wage access should be classified as loans or not.

Big picture: EWA programs offer expedient access to funds, but the debate surrounding their categorization highlights the necessity for enhanced transparency and regulation to safeguard consumers, particularly those who frequently avail these services and risk falling into a spiral of financial uncertainty.

WEEK AHEAD

What to expect

• Several major companies, including Apple, Starbucks, General Motors, Microsoft, Alphabet (Google's parent), Amazon, and Boeing, are scheduled to report earnings this week, providing insights into consumer spending and the U.S. economy's health.

• Microsoft, now the largest U.S. company by market value, surpassing Apple, reports Tuesday. Apple reports Thursday amidst concerns about slow sales earlier in the year.

• Boeing reports Wednesday, facing production limits on the 737 MAX after recent air-safety concerns. Oil companies Chevron and Exxon Mobil report Friday, with United Parcel Service reporting Tuesday amid a global shipping slowdown.

• Starbucks, Mondelez International, Clorox, and Procter & Gamble's reports will provide insights into consumer behavior and their response to higher prices.

• Pharmaceutical companies Pfizer, Merck, and AbbVie will release their quarterly results following major acquisitions in the industry.

• General Motors reports Tuesday, focusing on its electric vehicle and driverless car production.

SNIPPETS

Pulse Points

• President Joe Biden's campaign is planning an unprecedented fundraiser featuring Biden, Bill Clinton, and Barack Obama, aimed at boosting both funds and Democratic voter enthusiasm for the 2024 ticket.

• Social media users were unable to search for Taylor Swift on platform X on Saturday, following the viral spread of nonconsensual sexually explicit deepfakes of the pop star.

• Cruise, General Motors' autonomous vehicle division, revealed it is under two federal investigations related to its response to a serious accident involving one of its "robotaxis."

• A group of developers is planning to build what would be America's tallest building in Oklahoma City.

• A federal jury has ordered Donald Trump to pay over $83 million in damages for defaming writer E. Jean Carroll, marking a significant financial and legal setback as he nears securing the Republican nomination for the upcoming presidential election.

• A Hong Kong court has ordered the liquidation of property developer China Evergrande Group, concluding the prolonged saga of a company whose default significantly impacted the world's second-largest economy.

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