"Obesity is becoming as large a factor as tobacco once was." -- Ford Motor's director of health-care management, Dr. Vince Kerr, on health-care spending by corporations Protests and boycott threats haven't forced Augusta National Golf Club to lift its male-only members policy. Would a law that wipes out the tax deduction for the two-martini lunch do the trick?
A bill introduced on June 11 to nix tax write-offs for companies when they entertain at restrictive clubs is pressing the issue. The bill would cut the 50% break for meals at clubs that exclude women or minorities as members. Augusta is the most prominent of the two dozen U.S. golf clubs that have no female members. But Representative Brad Sherman (D-Calif.) says the bill is aimed at all restrictive clubs. "If Augusta admitted 500 women tomorrow, this bill would still be important," he says.
Opponents say enforcing such a tax change would be a nightmare. And House Majority Leader Tom DeLay is less than enthusiastic. Says the Texan: "Last time I checked, they [the bill's sponsors] were Democrats." Game on: now corporate america sees electronic gaming as a hot marketing vehicle. Consumer-products companies are vying to plunk their wares into popular games and are building new games around their brands. And on June 9, Starcom MediaVest, a unit of Paris-based marketer Publicis Groupe (PUB) launched Play, a division that will focus on the $10.3 billion gaming market.
Games let advertisers redefine product placement. "Now companies will go beyond just placing an ad on a blimp," says Tim Harris, a Play director. In a Disney game out this fall, players deliver McDonald's (MCD) burgers, collect Nokia ring tones, and skate as Disney characters. Another fall title features a detective using Motorola's phones and global positioning system to hunt crooks. Nike (NKE) converted a television ad into the online soccer game Scorpion Knock-Out.
And recording artists are getting into the act, too. April's Def Jam Vendetta video games includes 18 tracks from the hip-hop label Def Jam. The label even named its most recent tour Def Jam Vendetta. Now that's synergy. Asthma specialists can barely contain their excitement over Xolair, the first drug to treat an underlying cause of this chronic disease. As BusinessWeek went to press, the drug, developed jointly by Genentech (DNA), Novartis (NVS), and Tanox (TNOX), was expected to win FDA approval on June 20.
Genentech investors are excited about an FDA nod, too. It's one of the reasons the stock has soared 130% since mid-March, to about $76 per share. But Xolair will be slow to break any sales records, despite its promise. Why? A likely $10,000-a-year price tag. And it will be approved for only one-third of the nation's 17 million asthma sufferers.
Xolair blocks an antibody that triggers allergic reactions. It is designed to combat allergic asthma -- about half of all asthma sufferers -- and is approved only for those 12 and over with moderate to severe conditions. The drug is meant to supplement rather than replace standard asthma treatments, so biotech analysts assume that insurers will balk at reimbursement. Merrill Lynch (MER) is projecting annual sales for Xolair of $355 million by 2006, far short of blockbuster status. It's a slimy business. Contractors and insurers are already furious over individual lawsuits claiming that toxic mold in buildings causes health problems. Now there's a new tactic: class actions.
More than a dozen such mold-related lawsuits are taking shape. In January, plaintiffs suing developers, contractors, and the city of Carson City over mold in a housing development settled for $14 million. In April, a judge certified a suit against real estate investment trust Archstone-Smith over mold in a 452-unit condo. And the Hilton Hawaiian Village is the target of a class action because of mold growing in its Waikiki resort.
These suits come in response to home insurance companies' efforts to exclude mold damages from policies. Since 1999, they have paid $4 billion in claims in Texas alone. Lawyers have figured out that class actions, especially against commercial property owners, could bring more ways to claim damages and bigger awards. Moreover, "a class action lets you shop around for favorable venues," says Robert Hartwig, chief economist at the Insurance Information Institute. Not something owners or insurers want to hear. What would you do if your hard drive crashed and everything on your computer seemed lost forever? You might panic. But would you consider suicide? That's what the folks wonder at DriveSavers Data Recovery, a company that specializes in retrieving lost data from damaged computers. The Novato (Calif.) company keeps a former suicide-prevention counselor on staff to handle its most distressed clients.
Kelly Chessen hasn't lost a client yet. She averages up to three freaked-out callers an hour, using her counseling skills to calm the troubled souls. "These people are in crisis and imagine this is a much bigger deal than it is," says Lee Judy of the American Association of Suicidology.
One recent caller had a huge presentation due and thought he had lost it. He worried that he would lose his job and wouldn't be able to pay his mortgage or take care of his children. Chessen reassures callers that their worst nightmares are unlikely to become reality. "They just want to be heard. So I listen, and I empathize," she says.