Current Events in February 2019

Six years ago, when auto enthusiasts first questioned how the lithium ion batteries that power Teslas and others EVs would fare in a wreck, Elon Musk was unequivocal that the chances of a Tesla battery catching on fire after a crash were almost non-existent.

“You are more likely to be struck by lightning in your lifetime than experience even a non-injurious fire in a Tesla,” Musk said in 2013.

“The theoretical probability of a fire injury is already vanishingly small and the actual number to date is zero,” he added.

While industry experts disagree over whether there’s enough independent data to back that claim (watchdog groups like the Center for Auto Safety say there isn’t), the risk of a Tesla catching on fire isn’t an abstract problem, and it may be higher than the company has previously let on.

Tesla fires are a big enough concern that first responders are learning to approach EV battery fires differently than they would fires in gasoline-powered cars.

“We are going to be coming up with some training in the near future, as far as how to deal with this kind of stuff,” Sgt. Mark Leone with the Davie Police Department in south Florida tells ConsumerAffairs.

The Davie Crash

On a Sunday night, a physician and father of five was driving his 2016 Tesla Model S on a busy road between 75 and 90 miles per hour when “the vehicle left the roadway for unknown reasons,” according to the Davie Police Department. The driver crashed into a tree.

Police officers happened to already be in the area and pulled up to the scene immediately after the crash. Officers tried to break open the windows to get the victim out of the car, according to police.

“The car was not on fire yet.” when the officers arrived, Leone tells ConsumerAffairs. The fire broke out soon after though, and became too overwhelming for the officers to continue.

Leone says that Davie police officers are trained to do everything they can to pull people out of burning cars. This is the first fiery crash in recent years, Leone says, “where we haven’t been able to get the person out.”

Fire response

Firefighters with the Davie Fire Department arrived shortly after and extinguished the blaze.

En route to the salvage yard, the Tesla caught fire a second time while in the back of the tow truck. Firefighters had followed the tow truck and quickly acted to extinguish the car again, according to Davie Fire Department Marshal Robert Taylor.

Then, at the tow yard, the car reignited that night and again the next morning. At one point, in between the fires Taylor says that he received a call from a fire chief in California, who shared some helpful advice about putting out EV battery fires. Tesla officials also called the fire department to check on everyone and offer help, Taylor says.

The victim, Omar Awan, died at the scene.

Did Tesla adequately warn the general public?

In a statement to ConsumerAffairs, Tesla spokespeople did not answer whether the company stands by its claim that people are more likely to be struck by lightning than experience a fire in a Tesla.

Instead, Tesla spokespeople point out that the company published a manual online specifically addressed to first responders. The manual describes the unique risk of putting out an EV battery fire, namely that “battery fires can take up to 24 hours to extinguish” and require 3,000 gallons of water.

Taylor, the Davie Fire Department marshal, says he was already familiar with that Tesla manual and with the idea that EV fires require more long-term monitoring and enormous amounts of water.

“Once it’s extinguished, you have to keep monitoring it using a thermal imager,” Taylor tells ConsumerAffairs.

Other fire departments have also prepared for situations like this. The town of Mountain View, California is in the heart of Silicon Valley. The local fire department got hands-on practice for putting out battery fires in 2014, in a special training session right at the Tesla factory, the Mountain View Fire Department chief said in a previous interview.

But not everyone got the message. Leone, the sergeant with the Davie police department, says that he only learned after the recent crash that Tesla has a special manual for first responders.

"It’s something that I just heard about yesterday,” Leone tells ConsumerAffairs. "I don’t own a Tesla so I never thought to look at the owner’s manual.”

"We are going to come up with some training for dealing with an issue like this, because Tesla is not the only battery-operated car,” he adds.

What experts say

Whether first responders are universally aware that EV cars can catch fire and require a different approach for firefighting has major public safety implications. According to researchers, the techniques that firefighters use for putting out gasoline-fueled fires could actually make the fire worse in a battery-powered car. Researchers say that lithium ion batteries in general pose an inherent fire risk.

“We’re in uncharted waters here,” Massachusetts Institute of Technology professor Donald Sadoway told Bloomberg magazine last year.  

The battery industry has improved lithium ion batteries over the years, but in situations where the battery cells are violently torn apart in a crash, “it's basically like a firecracker,” University of Pittsburgh engineering professor Prashant Kumta told the magazine. “You have one battery that catches fire, then the next one catches fire and pretty soon they’re all on fire.”

The comparison between fire rates in battery-powered cars and gasoline cars is an unsettled science, but Musk can no longer claim that “the actual number [of fire injuries] to date is zero,” as he did in 2013.

The National Transportation Safety Board (NTSB) is currently investigating several fatal car crashes in which a Tesla caught on fire following a violent crash. The family of a teen killed in a high-speed Tesla crash in Fort Lauderdale recently filed a lawsuit alleging that the battery in the car was defective and “had inadequate measures to prevent a post-collision fire.” The fire in that crash also reignited several times after it was initially extinguished.

Tesla’s press team declined to answer questions from ConsumerAffairs about their outreach efforts to first responders or the likelihood of a Tesla catching on fire. A full statement from the company is below:

"We are deeply saddened by this accident and our thoughts are with everyone affected by this tragedy. We have reached out to the local authorities to offer our cooperation. We understand that speed is being investigated as a factor in this crash, and know that high speed collisions can result in a fire in any type of car, not just electric vehicles.”

The House of Representatives now has its own answer to the Medicare-For-All legislation that Sen. Bernie Sanders has long championed in the Senate.

Rep. Pramila Jayapal (D-Wash.) and Rep. Debbie Dingell (D-Mich.) on Wednesday introduced the “Medicare for All Act of 2019.” Like Sanders’ legislation, the House version of the proposal would establish a government plan to cover all medical expenses for Americans and would ban private insurers from selling private plans to compete, though private insurance for services not covered by the government would still be allowed.

The House bill would also cover “comprehensive reproductive health,” including abortion, as the Sanders bill does. However, the new legislation would be rolled out faster -- two years instead of four in the Senate version -- and offers more expansive coverage than its counterpart.

In particular, the House bill would cover long-term care, which currently isn’t even available on Medicare. Such a provision would benefit people with disabilities and the elderly, experts say.

“The long-term care piece is unbelievably significant,” Harvard public health researcher Robert Blendon told Kaiser Health News.

Sanders and others running for president in the Democratic primaries have made healthcare costs a leading campaign issue.

Amazon has launched a program designed to combat the surge in counterfeit products on the site by allowing brands to flag and remove counterfeit listings of their products from the platform on their own.

The e-commerce giant said its new program relies on machine learning technology to offer what it calls “automated protections.” The company says the technology scans listings and will automatically remove products that it determines are counterfeit.

Brands that are invited to participate in the program can remove listings off the site as well.

“With Project Zero, brands no longer need to contact us to remove a counterfeit listing,” Amazon said in a statement. “Instead, they can do so, quickly and easily, using our new self-service tool.”

Amazon said it will be monitoring this “self-service” ability closely.

"Brands must maintain a high bar of accuracy in order to maintain their Project Zero privileges," Amazon notes in its FAQ section about the service. "We have a number of processes in place to promote accuracy, including required training as part of Project Zero enrollment and ongoing monitoring to prevent misuse of our tools."

Working towards the goal of zero counterfeits

Due to the sheer size of Amazon’s marketplace, the company has had a hard time contending with the issue of counterfeit products on its site. Amazon has been taking steps to drive down counterfeit sales for the past several years.

The company’s latest counterfeit-spotting initiative has already been tested by a number of brands, including Vera Bradley, Thunderworks (a maker of pet calming solutions), Kenu, and Chom Chom Roller.

Under the Project Zero program, Amazon said it was able to stop 100 times more suspected counterfeit products than what it’s usually able to take down in response to brands’ reports.

“Project Zero, with its automated protections and the self-service removal of counterfeit products, is a significant development that will help ensure our customers receive authentic Vera Bradley products from Amazon,” said Mark Dely, chief legal and administrator officer at Vera Bradley.

“Amazon’s product serialization service has been a game-changer for us. We are excited to have this self-service counterfeit removal tool for the U.S. Marketplace and consider this to be an insurance policy,” said Ken Minn, CEO, Kenu.

Do you have a favorite airline? If you’re like most consumers, probably not.

Like most people, you probably look for the best price, the shortest time, and the fewest number of add-ons you have to pay for, like luggage. Simply put, passenger loyalty is hard to come by for most airlines.

Yet, you’re probably sitting on at least one frequent flyer program that you chose because you actually liked the airline -- you had a good experience flying with them, there’s lots of flights in and out of your hometown, etc.

But, did you pick one of the so-called “best” frequent flyer programs?

WalletHub got out its calculator and ran the numbers on 23 key metrics ranging from the actual value of a rewards point/mile to the blackout date policies for the 10 largest domestic airlines’ loyalty rewards.

Here’s what the researchers came up with as the best frequent flyer programs:

1. Delta SkyMiles

2. United Airlines - Mileage Plan

3. JetBlue Airways - TrueBlue

4. Southwest Airlines - Rapid Rewards

5. Hawaiian Airlines - HawaiianMiles

To find out which airline miles program is best for you, you might give WalletHub’s frequent flyer miles calculator a spin. The calculator can customize the results of this study based on your own annual airline budget.

The “best” may not necessarily be the best for you

While JetBlue’s loyalty program may be a Top 3 winner, you might not be anywhere close to an airport where JetBlue flies to or from, and paying extra to get to a JetBlue departure could cost you hundreds more.

To gauge which programs might work best for you, take a few minutes to see how each airline fared in each of WalletHub’s 23 categories. Look at the number of destinations served, how long before your miles will expire, comments from other program users, and perks like if your membership gets you a freebie on luggage or if your program is tied to other brands such as the one Delta announced with Lyft.

LifeHacker cites travel experts interviewed by WalletHub who say that consumers are likely to expect loyalty programs to pull back on their generosity as time goes on.

“Airlines have been moving to more of a ‘bus in the sky’ experience, where any additional value has been stripped, when you analyze the offerings from only a decade ago,” says Donna Wertalik, director of marketing at the Virginia Tech Pamplin College of Business. “The model will continue to move in this direction.” Wertalik says you can expect the value of miles and points to decline over time.

The Federal Trade Commission (FTC) has launched a new task force that will be dedicated to monitoring competition in the technology industry, the Wall Street Journal reported.

The federal agency said Tuesday that the new task force will focus specifically on “monitoring competition in U.S. technology markets, investigating any potential anticompetitive conduct in those markets, and taking enforcement actions when warranted.”

“The role of technology in the economy and in our lives grows more important every day. It makes sense for us to closely examine technology markets to ensure consumers benefit from free and fair competition,” FTC Chairman Joe Simons wrote in a statement.

Breaking up deals

The tech industry has been rocked by a series of privacy scandals in recent years, and critics have been increasingly vocal about the need for more regulation of the industry. Consumer advocates, lawmakers, and others have expressed growing concern about Facebook, in particular.

Although the agency didn’t discuss specific companies that would be targeted by the new task force, its creation will likely mean that large social networks like Facebook will face more regulatory hurdles.

Reports recently began circulating that Facebook is looking to combine its messaging platforms, and both Amazon and Google have continued to gain more control over the internet as a whole.

The FTC said its task force will employ about 17 attorneys with the goal of preventing big tech companies from monopolizing the sector. Officials said they would consider breaking up deals that are creating harm, according to the Journal.

“By centralizing our expertise and attention, the new task force will be able to focus on these markets exclusively – ensuring they are operating pursuant to the antitrust laws, and taking action where they are not,” Bureau Director Bruce Hoffman said in a statement.

The FTC said it will also be “re-examining mergers that already have been approved by the government.”

J.C. Penney announced Thursday that it plans to shutter 24 stores this year -- 15 of its department stores and nine home-and-furniture locations -- due to disappointing sales.

The retailer said the stores that are slated to be shut down “represent a real estate monetization opportunity.” The chain hasn’t yet released a list of stores that will close.

"Comparable sales performance for the closing stores was significantly below the remaining store base and these stores operate at a much higher expense rate given the lack of productivity," J.C. Penney said in a statement.

"Associates who will be impacted by the store closures will receive separation benefits, which includes assistance identifying other employment opportunities and outplacement services, such as resume writing and interview preparation."

In January, the company announced that it would be closing three of its full-line stores due to poor performance. The following month, the retailer said it would stop selling major appliances in its stores starting February 28 in an effort to "better meet customer expectations, improve financial performance and drive profitable growth."

Course correcting amid online competition

J.C. Penney and other brick-and-mortar retailers have been modifying their business strategies in an effort to align with changing consumer preferences to compete with online shopping channels such as Amazon.

Back in 2017, J.C. Penney said it would be continuing to build its online presence while retaining its physical locations.

“It is essential to retain those locations that present the best expression of the JCPenney brand and function as a seamless extension of the omnichannel experience through online order fulfillment, same-day pick up, exchanges and returns," Marvin R. Ellison, chairman and CEO, said in a statement at the time.

Just recently, J.C. Penney rival Sears narrowly avoided Chapter 11 bankruptcy after it was purchased through the hedge fund of chairman and former CEO Eddie Lampert. However, falling foot traffic and declining sales have forced Sears to close hundreds of locations in recent years.

J.C. Penney is looking to recently appointed CEO, Jill Soltau -- who approved the company’s decision to stop selling appliances and furniture -- to move the chain in a positive direction, and fast.

"The future trajectory of the company will be down to her and success relies upon decisive action with a firm focus on the shopper," Neil Saunders, managing director of GlobalData Retail, told USA Today. "Our main concern is that JCP has very little time to course correct. The business needs to move at pace and without any missteps – a tall order in today’s complex and fast-moving retail environment."

Pregnancy is full of countless ups and downs for expectant mothers. With a seemingly endless list of things to worry about before giving birth, a new study conducted by researchers from the Society for Risk Analysis found that when -- and where -- the birth takes place could be cause for concern.

Researchers found that women who give birth in teaching hospitals -- during the night or on weekends or holidays -- are more likely to experience complications during delivery.

It matters when and where

The researchers were interested in seeing if delivery complications were affected by several different factors:

• Time of day

• Time of year

• How far along doctors were in their shifts

• Day of the week

• Teaching hospital versus non-teaching hospital  

Between 2005 and 2010, the researcher analyzed over two million births throughout the state of Texas. All of the women involved in the study were at least 20 weeks into their pregnancies, were having just one baby, went into labor naturally, and had a doctor handle their deliveries.

The researchers found that women who gave birth in teaching hospitals were over two times as likely to experience delivery complications. When looking at different times of the day, week, or year, the researchers found some surprising statistics. Holidays had the highest likelihood of women experiencing delivery issues, as holiday births were nearly 30 percent more likely to have some kind of complication.

Nighttime births were second on the list, as women were over 20 percent more likely to experience a complication after the sun went down. Researchers also found that there was a greater chance of complications if doctors were on shift for longer periods; the risk of complication goes up nearly two percent each hour a doctor works.

Lastly, when compared to weekdays, women giving birth on the weekend are over eight percent more likely to experience complications.

Based on these results, the researchers believe that if hospitals were to pay closer attention to staff scheduling, many of these delivery complications could be avoided.

“Across an ensemble of hospital situations where clinical quality is known to vary independently of patient characteristics and volume, we see corresponding variation in the risk of preventable harm to expectant mothers,” said researcher Sammy Zahran.

Countless things to consider

While this study focuses on all things hospital-related, recent studies have explored other risks expectant mothers should be mindful of before giving birth.

One group of researchers found that a deficiency in vitamin B12 could increase the likelihood of having a premature birth, while older fathers were linked to greater risk of birth complications.

Subscribing to Netflix, Amazon, or Hulu costs less than $15 a month -- a bargain some might say. But there are still a lot of people who avoid that modest monthly subscription by using a friend or family member’s login.

These video streaming services spend billions of dollars each year obtaining existing and producing original content yet they have to contend with consumers sharing a subscription. A new report from CordCutting.com estimates that about 20 percent of people watching a pay video streaming service are using someone else’s account.

The report finds that Netflix has the most freeloaders. Nearly half -- 48 percent -- are using their parents’ account. Another 14 percent use another family member’s login.

Netflix has responded to this trend by creating a level of service -- at a higher rate -- that allows two users to be logged in at the same time.

Freeloading millennials

Broken down demographically, the report shows that millennials tend to make up a large segment of the freeloaders. They make up 18 percent of the Netflix pirates and 20 percent of those piggybacking on someone else’s Hulu account.

No doubt they view it as a victimless crime, but the study shows that the practice can have a rather large impact on a video streaming service’s bottom line. In the case of Netflix, which spends more on content that Disney, the company is estimated to lose as much as $192 million a month from piracy.

Piracy losses for Amazon are estimated to be $45 million and Hulu loses about $40 million a month.

You could make the case that people freeloading on someone else’s Netflix account probably wouldn’t subscribe to the service anyway, but there are plenty of analysts who think otherwise. Netflix continues to add subscribers but much of its growth is coming from overseas.

How much better could it do?

The study suggests Netflix could be doing a lot better if everyone played by the rules. It surveyed a sample of people using someone else’s account and found that nearly 60 percent said they would pay for the service if they lost access. That would add an estimated $112 million a month to Netflix’s revenue.

That said, the company appears to be doing just fine. In its latest earnings report, Netflix said it added 8.8 million new subscribers, a better-than-expected performance. It earned 30 cents a share on revenue of $4.19 billion.

The days of searching for the perfect $42 bra at your local mall may be coming to an end. Victoria’s Secret plans to close 53 stores this year after sales dropped 7 percent during the last quarter of 2018, when millions of shoppers headed to the mall for Christmas and Black Friday.

Apparently, those Christmas and Black Friday shoppers weren’t interested in Victoria’s Secret, despite coupons and other promotions that the stores tried to use to bring more people inside.  

Victoria’s Secret has become "more promotional than we would like over the last several years," Ed Razek, the CEO of parent company L Brands, said in a call with analysts Thursday.

Consumers instead are turning to lower-priced bras sold by major retailers like Walmart and Target. Lingerie startups that offer cheaper bras through online sales are also becoming a hit.   

Experts say that the retailer’s lacey bras and airbrushed models have less cache with millennials, who are more interested in inclusive messaging and comfortable styles.

Last year, Razek faced backlash for telling Vogue that Victoria’s Secret would never cast plus-sized or transgender models in its fashion shows. He later apologized for the remarks.

Lately, there has been some concern about auto loans and consumers’ ability to make the monthly payments. But a new report from Experian suggests these concerns may be overstated.

New and used car prices are near record highs, and after several Federal Reserve rate hikes last year, auto loan rates are about a percentage point higher. A year ago, Fitch Ratings reported that consumers with subprime car loans were defaulting at the highest rate in two decades.

In mid-February, the New York Fed reported that more than 7 million consumers were 90 days behind on their car payments at the end of 2018. That’s at least a million more than in 2010 when the economy was struggling to overcome the financial crisis.

But the latest from Experian suggests these trends might not be as ominous as they appear. Its analysis of fourth-quarter car payment data shows the percentage of 30-day delinquent loans improved year-over-year, while the percentage of 60-day delinquencies saw only a minimal uptick over the same time period.

Stable numbers

Experian says the number of borrowers who were 30 days behind on their car payment fell to 2.32 percent -- down from 2.36 percent a year earlier. Sixty-day delinquencies increased, but only slightly.

Despite the fact that more consumers are borrowing money to buy cars -- which would normally lead to a corresponding increase in loan delinquencies -- Experian finds the delinquency rate is fairly stable.

"While delinquencies can be an indicator of automotive finance market health, it's important to examine these trends within the larger industry context," said Melinda Zabritski, Experian's senior director of automotive financial solutions. "With more car shoppers using automotive financing options, it's natural to see an uptick in the volume of delinquent loans.”

One reason for the focus on the delinquency rate is a growing concern that consumers are purchasing vehicles they really can’t afford. The average transaction price on a new car or truck is now over $37,000. To make the monthly payment even close to affordable, many buyers are forced to finance the vehicle for as long as seven years.

As car and truck prices have risen, so have interest rates. According to Experian, the average rate on a new vehicle loan is 6.13 percent, up from 5.11 percent a year ago.  For used vehicle loans, the average interest rate is 9.59 percent.

A question of affordability

A 2017 study from BankRate found that the typical American household in many of the U.S.’ larger cities doesn’t earn enough to afford the average new car. Trying to force the issue may stretch your budget too far and leave you in a tough financial spot.

Personal finance experts say a potential buyer should be able to make a 20 percent down payment, finance the vehicle for no more than four years, and make payments comprising no more than 10 percent of their household’s income. If someone can’t make those kinds of payments, then the experts say you can’t truly afford the vehicle.

A leading indicator for the housing market showed new signs of life in January as pending home sales rebounded sharply after months of declines.

Pending sales reflect sales contracts signed but not yet closed. In a home sale transaction, it typically takes 30 to 60 days for the sale to close and be recorded as an existing home sale. Existing home sales closing in January were down 1.2 percent.

January’s pending sales, meanwhile, increased 4.6 percent from December, according to the Commerce Department. However, the number is still down from January 2018.

The housing market has slumped in recent months as buyers faced the double whammy of rising mortgage rates and higher home prices. In a break for buyers, rates have fallen since December.

"A change in Federal Reserve policy and the reopening of the government were very beneficial to the market," said Lawrence Yun, NAR’s chief economist.

Positive outlook

A declining inventory of available homes has also been a drag on sales and discouraged some buyers who have been unable to find a suitable home in their price range. Yun says the combination of lower mortgage rates and rising inventory levels should mean sales pick up during the spring housing season.

"Income is rising faster than home prices in many areas and mortgage rates look to remain steady. Furthermore, job creation will help lift home buying," Yun said.

Despite Realtors’ optimism, home builders apparently remain cautious. In another housing market report this week, the Commerce Department released data showing that housing starts went into freefall in January, plunging 11.2 percent from the month before.

Builders slow down

That’s the slowest rate of builders having broken ground on new homes in nearly three years. It comes as new home sales have slowed, in part because builders have focused on large and expensive homes.

In November, the government reported the average new home price was over $362,000, well outside the price range for most first-time buyers. As builders have found fewer takers for homes in this price range, they have curtailed construction. Housing starts are down 10.2 percent on a year-over-year basis.

Taken together, the two reports suggest demand for homes may be picking up at exactly the time builders are cutting back. That could lead to further price increases for all types of housing and a reversal of rising inventories.

Mercedes-Benz USA is recalling 13 model year 2018-2019 GLA250s and GLA250 4MATICs.

The sunroof bonding may allow water to leak into the vehicle.

This could affect the electrical contacts of the window airbag, potentially causing it to fail to deploy as intended, increasing the risk of injury in the event of a crash.

What to do

Mercedes has notified owners, and dealers will inspect the bonding of the panorama sliding sunroof and the electrical contacts of the window air bag on the affected vehicles, replacing the components as necessary, free of charge.

An interim letter was mailed February 13, 2019, to notify owners of the issue. A second letter will be sent once the repair is available.

Owners may contact Mercedes customer service at 1-800-367-6372.

Bellisio Foods of Jackson, Ohio, is recalling approximately 173,376 pounds of frozen pork entrées.

The products may be contaminated with extraneous materials -- specifically pieces of glass.

There are no confirmed reports of adverse reactions or injuries due to consumption of the products.

The following items, produced from December 7, 2018, to February 15, 2019, are being recalled:

• 14-oz. black cardboard box packages containing “BOSTON MARKET Home Style Meals BONELESS PORK RIB SHAPED PATTY WITH BBQ SAUCE & MASHED POTATOES” with “BEST BY:” dates of 12/07/2019 lot code 8341, 01/04/2020 lot code 9004, 01/24/2020 lot code 9024, or 02/15/2020 lot code 9046, represented on the label.

The recalled products, bearing establishment number “EST. 18297” on the end carton flap of the package, were shipped to a Department of Defense facility in Tucson, Ariz., and retail locations nationwide.

What to do

Customers who purchased the recalled products should not to consume them, but discard them or return them to the place of purchase.

Consumers with questions about the recall may contact Krista Cummings at (855) 871-9977.

Both Republican and Democratic senators had tough questions for the seven drug company executives who appeared before the Senate Finance Committee on Tuesday.

The lawmakers wanted to hear the justification for skyrocketing prescription drug costs, in particular why the the prices of older drugs keep rising much faster than the rate of inflation.

For the most part, the executives -- representing AbbVie, AstraZeneca, Bristol-Myers Squibb, Johnson & Johnson, Merck, Pfizer, and Sanofi -- recounted the billions they spend on research and development and blamed the system for eye-popping list prices.

Benefits not consistently distributed

More than one executive said most insurance companies don’t pay the list price because of rebates and discounts. But they acknowledged that doesn’t help consumers who lack adequate coverage.

"We want these rebates, which lower net prices, to benefit patients," said Sanofi CEO Olivier Vrandicourt. “Unfortunately, under the current system, savings from rebates are not consistently passed through to patients in the form of lower deductibles, co-payments or coinsurance amounts."

According to the committee, the price of Sanofi’s insulin drug Lantus has risen from $244 in 2013 to $431 today. During the hearing, some lawmakers appeared skeptical of drug company claims that there is little they can do to control prices.

"Prescription drugs did not become outrageously expensive by accident," said Sen. Ron Wyden (D-Ore.). "Drug prices are astronomically high because that's where pharmaceutical companies and their investors want them."

‘Rebates don’t explain all price hikes’

The Pharmaceutical Care Management Association (PCMA), the trade group representing pharmacy benefit managers, agreed with Wyden and said drug manufacturers should stop trying to shift the blame for high costs to consumers.

“Drugmakers alone have the power to set prices, and, contrary to the narrative promoted by some, their pricing strategies are unrelated to the rebates they negotiate with pharmacy benefit managers,” said PCMA CEO J.C. Scott. “In fact, nearly 40 percent of branded pharmaceuticals are not rebated, yet prices on those drugs also continue to increase.”

Scott also accused some drug manufacturers of abusing the patent system to prevent generic competition, including biosimilar competition, from entering the marketplace.

AARP Executive Vice President Nancy LeaMond says policy changes are needed to lower prescription drug prices, not simply shift them around within the health care system.

"The pharmaceutical industry refused today to take responsibility for out of control drug prices and the harm it is causing older Americans, patients, and family caregivers,” LeaMond said. “Americans continue to pay the highest brand-name drug prices in the world, and prescription drugs cannot work if people cannot afford them.”

Fiat Chrysler (FCA) has announced plans to invest $4.5 billion in existing Michigan auto plants and to build a new Detroit assembly plant to handle production of two new Jeep models.

FCA said the expansion is needed to meet the demand for its Jeep and Ram truck products. The investment would also cover the cost of developing and producing two new Jeep models, including a new full-size SUV. The expansion is expected to create 6,500 jobs.

FCA said its move is a response to the continuing shift in consumer demand toward SUVs and trucks and away from compact cars. FCA has already retooled plants in Illinois, Ohio, and Michigan to produce larger vehicles, that have become more popular in an era of relatively low gasoline prices.

The company recently revamped the Jeep Wrangler and introduced to its line-up the Ram 1500 and Jeep Gladiator.

Banking on Jeep and Ram

“Three years ago, FCA set a course to grow our profitability based on the strength of the Jeep and Ram brands by realigning our U.S. manufacturing operations,” said Mike Manley, CEO of  FCA N.V. “Today’s announcement represents the next step in that strategy.”

Manley says the expansion will allow the company to put more resources into all-electric Jeeps and plug-in hybrids.

FCA has made a proposal to the city of Detroit to sell property it says it needs to build a new assembly plant. The company says the planned investments are subject “to the successful negotiation and final approval of development packages with the state and other local governments.”

According to plans, FCA would spend $1.6 billion to modify two plants that make up the Mack Avenue Engine Complex and turn them into an assembly plant for the next-generation Jeep Grand Cherokee and a new three-row full-size Jeep SUV and plug-in hybrid.

Return to Detroit

Construction will begin in the second quarter of the year with production estimated to begin by the end of next year. FCA says its plan will produce one of only two automotive assembly plants within the boundary of Detroit, a city once synonymous with the auto industry. The company says the facility would be the first new assembly plant to be built in the city of Detroit in nearly three decades.

At the same time, FCA says it plans to invest up to $900 million on its last remaining Detroit vehicle assembly plant -- the Jefferson North Assembly Plant. The money will be used to modernize the facility for production of the next-generation WL Grand Cherokee and continued production of the Dodge Durango.

On Tuesday, the Oregon Legislature passed the nation’s first statewide rent control policy. Senate Bill 608, which passed by a vote of 35-25, caps rent increases at 7 percent (plus inflation) annually and places new limits on landlords’ ability to evict tenants.

Under the measure, landlords are prohibited from terminating month-to-month leases without cause after the first year of occupancy, and rent increases are limited to once per year. Landlords must also have a government-approved reason for evicting a tenant (such as failure to pay rent or violating a lease agreement) and must pay the tenant one month’s rent in the event that eviction is necessary.

The measure would allow for some “landlord-based” eviction causes, such as a major renovation or the landlord moving into the unit. But before evicting the tenant for one of these reasons, the landlord would have to provide 90 days’ notice and pay one month’s rent to the tenant.

Landlords with fewer than five units are exempt from the bill, as are those with rental properties that are less than 15 years old.

Protecting renters

"This first-in-the-nation legislation will protect renters and ensure we have a fairer system for everyone," said Rep. Jennifer Williamson (D–Portland) after the measure passed.

In the runup to the measure’s passage, Republicans argued that rent control will discourage investment in housing and add to the rental shortage.

“I am deeply concerned about the rent control bill that passed out of the house today,” said Rep. Jack Zika, R-Redmond. “Studies have shown that rent control policies will reduce the quantity and quality of housing available.”

Gov. Kate Brown, a Democrat -- who has voiced her support for the measure and said she will sign the legislation -- argued that there is “no single solution — not one entity, or one person — that can solve Oregon’s housing crisis.”

“This new legislation is one of many actions Oregon needs to take to address our housing crisis. While it will provide some immediate relief, we need to focus on building supply in order to address Oregon’s housing challenges for the long term,” Brown said in a statement.

The Federal Trade Commission (FTC) announced on Tuesday that it had settled a case against an Amazon seller that allegedly used fake paid reviews and false claims in order to sell more of its product.

The agency accused Cure Encapsulations Inc. and owner Naftula Jacobwitz of paying AmazonVerifiedReviews.com to post glowing reviews for the product and maintain its 4.3 out of 5 star rating.

The product was previously listed as “Quality Encapsulations Garcinia Cambogia,” an herbal supplement marketed as a weight loss aid.

"Please make my product... stay a five star," Jacobowitz allegedly said in his communication with the fake review provider. According to the FTC, Jacobowitz paid the website $1,000 for 30 positive reviews.

Unsubstantiated claims

In its complaint, the FTC also accused the company of making false and unsubstantiated claims about the weight loss product. For example, one claim on the product’s listing page stated that it “literally blocks fat from forming.”

"People rely on reviews when they're shopping online," Andrew Smith, director of the FTC's Bureau of Consumer Protection, said in a statement. "When a company buys fake reviews to inflate its Amazon ratings, it hurts both shoppers and companies that play by the rules."

The Commission has fined the defendants $12.8 million for using fake reviews to boost sales. The company will pay the FTC $50,000 right away, and the remainder will be contingent on how much money the company has.

Cure Encapsulations is also barred from “making weight-loss, fat-blocking, or disease-treatment claims for dietary supplements, food, or drugs, unless they have reliable scientific evidence from clinical trials in humans” under the terms of the settlement.

Additionally, Jacobowitz must inform all previous buyers of the allegations and tell Amazon which reviews were paid for.