GAUTAM: TONIGHT ON "GREATER BOSTON."

DRUG COMPANIES ARE AT ODDS WITH THE BIDEN ADMINISTRATION TO NEGOTIATE THE PRICE OF PRESCRIPTION MEDICATIONS.

WHAT DOES THIS MEAN FOR WHAT YOU PAY AT THE PHARMACY?

PLUS, HAVE LABOR STRIKES BEEN PAYING OFF FOR AMERICAN WORKERS?

WE WILL DISCUSS, AHEAD.

COMING SOON TO A PHARMACY NEAR YOU, LOWER PRESCRIPTION DRUG PRICES.

THAT'’S THE GOAL AT LEAST AS MEDICARE TAKES STEPS TO NEGOTIATE PRICES STARTING WITH 10 MEDICATIONS THAT COVER A WIDE RANGE OF COMMON AND SERIOUS CONDITIONS INCLUDING DIABETES, HEART FAILURE, AND ARTHRITIS.

AFTER A LENGTHY NEGOTIATION PROCESS, NEW PRICES ARE EXPECTED TO KICK IN IN 2026.

THAT IS, IF LAWSUITS FILED BY SEVERAL OF THE DRUG COMPANIES HIND THOSE PRESCRIPTIONS DON'’T SUCCEED IN BLOCKING THE PROCESS ALTOGETHER.

SO WHAT DOES THIS MEAN FOR MEDICARE, ITS PATIENTS, AND THE REST OF US?

I'’M JOINED BY MIKE ASTRUE, FORMER GENERAL COUNSEL FOR THE U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES AND FORMER CHAIR OF MASS-BIO, AND DR. HUSSEIN LALANI, A PRIMARY CARE PHYSICIAN AT BRIGHAM AND HEALTH POLICY RESEARCHER FROM HARVARD MEDICAL SCHOOL.

WHEN DON'’T WE START WITH YOU.

IS THIS GOING TO AFFECT PRICES FOR CONSUMERS AT ALL?

MIKE: YES.

IT WILL HURT CONSUMERS IN THE SHORT RUN BECAUSE OF THE CHANGES IN MEDICARE PART D. THE LEFT WING OF CONGRESS HAS NEVER LIKED THE MANAGED CARE ELEMENTS OF MEDICARE.

PART OF THE WHOLE PACKAGE, THEY HAVE STRIPPED THAT OUT.

ORDINARY PEOPLE ON MEDICARE WILL PROBABLY BE PAYING A LITTLE BIT MORE AND THEY WON'’T BE BENEFITING FROM THESE PRICE REDUCTIONS.

IT IS TO PUNISH COMPANIES PRIMARILY, BUT ALSO SAVE MONEY FROM A BUDGETARY POINT OF VIEW.

THE AVERAGE AMERICAN PERSON WILL NOT SEE FINANCIAL BENEFIT FROM THIS AND WILL ALSO SEE, BEFORE TOO LONG, IF IT IS SUCCESSFUL, WHICH I DON'’T THINK IT WILL BE BECAUSE I THINK IT'’S BLATANTLY UNCONSTITUTIONAL, BUT IF IT DOES GET PAST THE COURTS, IT WILL GREATLY DAMAGE THE DEVELOPMENT OF INNOVATIVE DRUGS THE SAME WAY 30 YEARS AGO, THE CLINTON PROPOSALS TO CONTROL DRUGS CAUSED A NUCLEAR WINTER LOCALLY IN BIOTECH AND SHUT DOWN MOST NEW DEVELOPMENT FOR SEVERAL YEARS.

DR. LALANI: I STRONGLY DISAGREE.

I THINK WE'’VE ALREADY STARTED TO SEE THE INFLATION REDUCTION ACT AS LOWERING PRICES IN COSTS FOR PATIENTS.

WE'’VE CAPPED INSULIN AT $35 PER MONTH.

IT IS HELPING MY PATIENTS WHO HAVE DIABETES.

THESE NEW DRUGS THAT ARE GOING TO BE NEGOTIATED, THEY ARE ACCRUING SAVINGS FOR A LOT OF THE OTHER FEATURES OF THE INFLATION REDUCTION ACT.

THE MOST NOTABLE OF WHICH GOES IN PLACE IN 2025.

WHICH CAPS THE OUT-OF-POCKET COST FOR THE WHOLE YEAR FOR PATIENTS WITH MEDICARE AT $2000 PER YEAR.THAT WILL SAVE TONS OF PATIENTS CURRENTLY PAYING UPWARDS OF THAT $5,000, $10,000, ESPECIALLY FOR EXPENSIVE CANCER MEDICATION.

MIKE: I THINK THAT IS JUST NOT GOING TO HOLD UP.

THERE ARE GOING TO BE TONS OF PATIENTS WHO ARE BENEFITING FROM THE CURRENT COMPETITION IN MEDICARE PART D. YOU TAKE THAT AWAY ON THE DRUG SIDE AND THE DRUGS WILL GET MUCH MORE EXPENSIVE.

ARE THERE GOING TO BE SOME PATIENTS THAT GAIN?

YES.

ARE THERE GOING TO BE PATIENTS WHO LOSE?

YES.

I THINK IT IS GOING TO BE GENERALLY A NET LOSS FOR PATIENTS, BUT YOU CAN'’T CREDIT THE ACT WITH DOING ANYTHING OF SUBSTANCE.

YOU CAN'’T SAY BECAUSE THEY'’VE ALREADY GONE AHEAD AND CAP INSULIN PRICES, WHICH THEY'’VE -- THEY SHOULD HAVE DONE ANYWAY.

I THINK THERE WERE INAPPROPRIATE AGREEMENTS MADE.

BUT THAT DOESN'’T SUPPORT THE NOTION THAT THIS WILL BE A HUGE SUCCESS.

YOU TAKE TIME OF THE MOST SUCCESSFUL DRUGS ON THE MARKET AND PUNISH COMPANIES FOR HAVING THEM, AND IT IS A PUNITIVE PROCESS.

THERE ARE NO STANDARDS.

THERE'’S NO ADMINISTRATOR'’S APPEAL.

THERE IS NO LEGAL APPEAL.

ONLY CHALLENGE YOU CAN MAKE IS CONSTITUTIONAL.

IT IS A FRAUD ON THE PUBLIC TO CALL THIS A NEGOTIATION PROCESS.

IT'’S NOT A NEGOTIATION.

IT IS A NEGOTIATION THE SAME WAY IF I SNUCK UP ON YOU IN THE PARKING LOT AND PUT A GUN TO YOUR HEAD AND SAID GIVE ME YOUR WALLET OR ELSE.

BUT THE OR ELSE IS THE SAME THING.

HHS WILL SET A PRICE.

IF YOU DON'’T LIKE IT AS A COMPANY, YOU DON'’T HAVE THE OPTION OF NOT TAKING IT.

YOU HAVE TO CONTINUE PROVIDING THE DRUG.

IF YOU SAY NO, YOU PAY A 95% TAX ON YOUR REVENUE.

NOT YOUR PROFITS, BUT THE REVENUE.

IT MEANS MOST OF THEM WILL BE RUNNING THESE PRODUCTS AT A LOSS.

THE CONSEQUENCE OF MOVING SO DRAMATICALLY IN THAT DIRECTION IS GOING TO PUT A FREEZE ON THE ABILITY OF SMALL COMPANIES TO ATTRACT THE FINANCING THAT THEY NEED TO CONTINUE TO DEVELOP INNOVATIVE DRUGS.

DR. LALANI: I DON'’T SEE THIS AS A PUNISHMENT.

THIS LAW ALLOWS MEDICARE TO NEGOTIATE DRUG PRICES FOR DRUGS THAT HAVE BEEN ON THE MARKET FOR AT LEAST NINE OR 13 YEARS.

THIS IS NOT ALL NEW DRUGS AT ALL.

IT'’S A SMALL SLIVER OF OLDER DRUGS THAT HAVE BEEN ON THE MARKET FOR A WHILE.

WHAT I CAN TELL YOU IS MY PATIENTS WITH MEDICARE STILL CAN'’T AFFORD MEDICINES.

ONE IN FOUR AMERICANS OVER THE AGE OF 65 CANNOT AFFORD MEDICINES.

THAT LEADS THEM TO RATION MEDICINES OR NOT USE THEM AT ALL.

ONE OF MY PATIENTS WHO HAS ATRIAL FIBRILLATION, A COMMON CONDITION WHERE THE HEART FLUTTERS INSTEAD OF SQUEEZING, IT INCREASES A RISK OF BLOOD CLOTS.

THERE ARE TWO MEDICATIONS THAT REDUCE THE RISK OF BLOOD CLOTS.

THEY COST HIM $500 A MONTH.

HE JUST CAN'’T AFFORD THAT.

BECAUSE OF THE RULES MEDICARE HAS IN PACE -- PLACE, HE CAN'’T QUALIFY FOR THE OTHER PROGRAMS.

HE APPLIED FOR THE PATIENT ASSISTANCE PROGRAM AND HE WAS DENIED.

AND HE'’S LEFT WITH $500 BILL PER MONTH.

YOU CAN'’T TELL HIM IT'’S NOT GOING TO HELP HIM.

IT WILL ABSOLUTELY HELP HIM.

HE SPENDS $6,000 A YEAR RIGHT NOW ON THAT DRUG.

IT WILL BE CAPPED BUT NOT UNTIL 2025.

MIKE: BUT IF YOU DON'’T HAVE THE DRUG IN THE FIRST PLACE, I HAVE TAKEN SOME OF THESE DRUGS.

THERE IS AN ALMOST EQUIVALENT DRUG NOT ON THIS LIST.

ONE OF THEMSELVES 7.5 BILLION AND THE OTHER 5.5 BILLION.

I'’M ON THE OTHER DRUG THAT IS NOWHERE NEAR MAKING AS MUCH MONEY.

IF THE SYSTEM HAD BEEN IN PLACE 20 YEARS AGO, THE DRUG I'’M ON NEVER WOULD HAVE BEEN DEVELOPED IN THE FIRST PLACE.

THEY WOULD JUST SAY RA IS A TARGET, WE ARE JUST NOT GOING TO DO THIS.

I'’VE SEEN IT HAPPEN WHEN I WAS AT BIOGENIC.

THEY DROPPED THEIR HAV -- HIV PRODUCT IN PART BECAUSE OF THE PRESSURE TO KEEP PRICES DOWN.

IT'’S A SHAME BECAUSE IT'’S A PRODUCT THAT COULD HAVE HELPED PEOPLE IF IT WAS DEVELOPED IN A TIMELY BASIS.

LATER, TECHNOLOGY WAS BETTER.

WHEN IT FINALLY DID START MOVING ALONG WITH ANOTHER COMPANY, IT DIDN'’T BENEFIT ANYONE.

BUT THE DEVELOPMENT PROCESS IS DIFFICULT.

IT'’S EXPENSIVE, IT'’S UNPREDICTABLE.

FOR THIS STRUCTURE TO ADD ADDITIONAL COST AND UNPREDICTABILITY TO IT, IT IS GOING TO DAMAGE THE DEVELOPMENT OF NEW PRODUCTS.

SO IF YOU HAVE FRIENDS AND RELATIVES WITH CANCER, SERIOUS AUTOIMMUNE DISEASES, RARE CONDITIONS, THIS IS A REAL THREAT TO YOU GETTING THE MEDICINES YOU WANT TO HAVE.

DR. LALANI: I WANT TO PUSH ON THIS A LITTLE BIT.

THIS IS EXACTLY THE ARGUMENT PHARMA HAS MADE.

IT HAS ECONOMIC VALIDITY, BUT I WOULD SAY A LOT OF THE ARGUMENT HAS BEEN DAMAGED BY THE BEHAVIOR OF PHARMACEUTICAL COMPANIES.

GAUTAM: MAY BE THE MOST EGREGIOUS IS A CLEAR CASE OF PHARMACEUTICAL COMPANIES PAYING GENERIC COMPETITORS NOT TO ENTER THE MARKET IN WAYS THAT PROBABLY SHOULD BE ILLEGAL.

SO IF THE INDUSTRY CHOOSES TO ACT IN WAYS THAT MAKE IT SEEM LIKE IT IS IN SOME WAYS PREDATORY, DOESN'’T THAT UNDERCUT THE CREDIBILITY THAT WE NEED THIS TO INNOVATE?

MIKE: SO IF THE ARGUMENT IS THE INDUSTRY HAS DONE SOME DUMB THINGS, I AGREE WITH THAT.

WHEN I WAS CHAIR OF MASS BIO, I WAS VERY UNPOPULAR BECAUSE I KEPT SAYING WHY ARE YOU DUMPING PRICES IN CANADA?

IT'’S NOT FAIR, YOU WILL CREATE A POLITICAL CONTROVERSY.

IF YOU WANTED TO REGULATE DRUGS BY SAYING YOU GET THE BEST PRICE OF ANY DEVELOPED COUNTRY, I WOULD BEFORE THAT.

-- I WOULD BE FOR THAT.

I THINK THE LAST ADMINISTRATIONS HAVE DONE AN ABSOLUTELY CRUMMY JOB AT THE FDA ON WHAT I THINK IS THE MOST IMPORTANT THING FOR BRINGING COSTS DOWN WHICH IS WE DON'’T HAVE A BIO GENERIC INDUSTRY AT.

THE FDA CULTURALLY HAS NEVER WANTED TO DO THIS.

PUBLIC CITIZEN PLACES ARE GETTING IN THE WAY TO THE KIND OF THINGS YOU NEED TO DO TO HAVE A BIO GENERIC INDUSTRY.

IT IS NOT AN ACCIDENT THAT MOST OF THESE DRUGS ARE BIOTECH PRODUCTS.

THE SMALL MOLECULES, THE CARE -- CHEMICALS, ARE GETTING GENERIC COMPETITION WHEN THEY GO OFF PATENT.

YOU ARE NOT SEEING THAT IN THE SAME WAY AS CONSISTENTLY ON THE BIOTECH SIDE.

SOMETIMES YOU ARE SEEING IT.

THERE ARE SOME DRUGS THAT ARE PRODUCTS OF THE OLD SYSTEM AND THAT'’S ABOUT READY TO CYCLE OUT.

IT CREATES A PROBLEM IN TERMS OF WHEN THEY COULD GO GENERIC.

BUT THE SINGLE BEST THING YOU COULD DO TO BRING DOWN DRUG PRICES IN THIS COUNTRY IS TO MAKE SURE THE FDA GOT ITS ACT TOGETHER AND PUT IN THE REGULATORY STRUCTURE AND INCENTIVES TO HAVE A REAL BIO GENERIC INDUSTRY AND THEN YOU WOULD SEE SERIOUS PRICE REDUCTIONS.

DR. LALANI:DR. LALANI: THE MAIN REASON WE HAVE HIGH PRICES IN THE UNITED STATES IS BECAUSE WE HAVE MONOPOLIES.

THE GOVERNMENT GRANTS PRICES TO MONOPOLIES AND ALLOWS THEM TO SET THE PRICES.

NOW THE GOVERNMENT SAYS WE WILL SET THE PRICE AND NEGOTIATION FOR 10 OF THE DRUGS.

THE THOUGHT THAT WE HAVE LIKE EVERY SINGLE DRUG IS A BLOCKBUSTER OR HOMERUN IS FALSE.

LESS THAN HALF THE DRUGS ARE HOME RUNS.

THE STUDY WE DID AT OUR RESEARCH GROUP, PORTAL, AT HARVARD MED SCHOOL, WE FOUND OF THE 50 TOP SELLING DRUGS IN MEDICARE IN 2020, LESS THAN HALF WERE BETTER THAN THINGS ALREADY ON THE MARKET.

THIS IS REALLY IMPORTANT BECAUSE WE SHOULDN'’T BE PAYING TOP DOLLARS FOR DRUGS THAT ARE NOT REALLY BETTER THAN WHAT WE HAVE ALREADY.

EVERY OTHER COUNTRY IN THE WORLD ASSESSES DRUGS AND THEIR VALUE COMPARED TO OTHER DRUGS ON THE MARKET.

YES, LET'’S ACCEPT IT.

DRUG DEVELOPMENT IS EXPENSIVE.

I DON'’T THINK ANYONE IS SAYING THAT.

BUT IT'’S NOT LIKE THE DRUG INDUSTRY IS DOING IT ALL ON THEIR OWN.

THE FEDERAL GOVERNMENT AND TAXPAYERS ARE CONTRIBUTING TO THIS IN MANY WAYS.

PRECLINICAL DEVELOPMENT, THE NIH FUNDS NEARLY EVERY SINGLE DRUG HAS RECEIVED A FORM OF NIH FUNDING.

THE LAST DECADE PLUS, CLINICAL TRIALS ABOUT A QUARTER OF DRUGS ARE DEVELOPED WITH GOVERNMENT FUNDING.

THE GOVERNMENT GIVES TAX CREDITS TO RESEARCH AND DEVELOPMENT, OF TO 20% -- UP TO 20%.

THE LIST GOES ON.

IT'’S NOT LIKE THIS IS BEING.

DONE ON ITS OWN THERE IS A ROLE FOR GOVERNMENT HERE .

AND THE INDUSTRY.

MIKE:MIKE: IT'’S A MYTH THAT NIH ORIGINAL RESEARCH SPONSOR A LOT OF THIS RESEARCH -- DEVELOPMENT.

IF YOU LOOK FOR INSTANCE AT THE NIH ROYALTIES, IF THEY WERE A UNIVERSITY, THEY WOULD BE LIKE 60TH IN THE UNIVERSITY -- COUNTRY.

THE AMOUNT THEY PUT TOWARD CLINICAL TRIALS IS SMALL.

IT'’S ALREADY A HOMERUN COMING AND THEY WANT TO PLAY AT THE PARTY.

THEY ARE NOT THAT SIGNIFICANT.

IF YOU TALK ABOUT MONOPOLIES, IF YOU MEAN BY PATENTS, SOME MONOPOLIES ARE IMPORTANT.

PATENTS ARE IMPORTANT.

WITHOUT THOSE THINGS, THEY WOULD BE NOTHING AT ALL.

THERE'’S A REASON WHY CONGRESS PASSED THE ORPHAN DRUG ACT.

IT IS BECAUSE THEY WERE ALL THESE PRODUCTS THAT WERE NOT BEING DEVELOPED THAT THEY WANTED TO SEE DEVELOPED.

IT HAS BEEN ENORMOUS SUCCESSFUL.

YOU CAN SAY MONOPOLY BECAUSE PEOPLE DON'’T LIKE THE SOUND OF MONOPOLY, BUT THERE'’S BEEN NOTHING THAT HAS SAVED MORE LIVES IN THIS COUNTRY IN THE LAST 30 YEARS THAN THE ORPHAN DRUG ACT.

THAT CREATES SEVEN-YEAR MONOPOLIES TO COMPANIES AND IT'’S A GOOD THING NOT A BAD THING.

DR. LALANI: MONOPOLIES ALLOW COMPANIES TO SET PRICES.

SO WHEN YOU TALK ABOUT HOW THE DRUG PRICE IS SET, THAT IS HOW.

THE DRUG COMPANY SETS THE PRICES AND SOMETIMES FOR A VERY LONG TIME.

THERE ARE ABUSIVE PATENTS.

ONE OF THE DRUGS HERE ON THIS LIST IS A GREAT EXAMPLE.

DO YOU KNOW WHEN THAT DRUGS INITIAL PATENT WAS APPROVED?

1990.

MIKE: BUT THAT PROBLEM HAS ALREADY BEEN SOLVED.

DR. LALANI: IT HASN'’T BEEN SOLVED.

MIKE: IT HAS.

WE CHANGED THE SYSTEM.

OTHER DRUGS GOING FORWARD WILL NOT BE ABLE TO DO WHAT THEY DID WITH EMBRIL.

IT'’S NOT POSSIBLE ANYMORE.

WE HAVE MOVED TO THE EUROPEAN SYSTEM WHERE IT'’S 20 YEARS TO APPROVAL.

NO EXTENSIONS.

THIS MAKES A HUGE DIFFERENCE.

WHEN YOU FACTOR IN THE LENGTH OF TIME THAT IT TAKES TO DEVELOP A DRUG, PROBABLY 13 OR 14 YEARS ON AVERAGE, THERE IS A VERY SHORT WINDOW GOING FORWARD FOR MOST COMPANIES, NOT ONLY TO RECRUIT -- RECOUP THEIR COSTS FOR THE DRUGS THAT ARE APPROVED, BUT FOR ALL THE DRUGS THAT DON'’T MAKE IT.

IF YOU'’RE TRYING TO SERVE PEOPLE WHO ARE NOT BEING SERVED NOW, YOU HAVE A LOT OF FAILURES.

BIOGENIC HAS A LOT OF FAILURES.

ALL THE INNOVATIVE COMPANIES HAVE A LOT OF FAILURES.

YOU HAVE TO PAY NOT ONLY FOR THE DRUGS THAT WIN, BUT THE ONES THAT DON'’T WIN.

GAUTAM: MIKE ASTRUE, DR. HUSSEIN LALANI, THANK YOU FOR BEING WITH US.

FROM HOLLYWOOD ACTORS AND WRITERS TO UPS DRIVER'’S, AND TEACHERS, NURSES, AND STARBUCKS BARISTAS, WORKERS IN LABOR UNIONS HAVE HAD A BUSY YEAR FIGHTING FOR HIGHER PAY AND BETTER WORKING CONDITIONS.HOW HAVE THEIR EFFORTS BEEN PANNING OUT FOR COMPANIES AND THEIR EMPLOYEES?

I'’M JOINED BY CLARE HAMMONDS, PROFESSOR OF PRACTICE AT LABOR CENTER AT UMASS AMHERST, AND ROY BAHAT, HEAD OF BLOOMBERG BETA, AN EARLY-STAGE VENTURE CAPITAL FIRM.

HOW DO YOU ACCESS --ASSESS THE SUMMER OF LABOR TUMBLED?

CLARE: I WOULD LOOK AT A COUPLE THINGS.

FOR ONE, WE HAVE SEEN MORE LABOR ACTIVITY THAN WE HAVE IN MANY YEARS.

IT DOES NOT JUST START THE SUMMER.

EVEN IF WE LOOK BETWEEN 2021 AND 2022, WE WERE SEEING BIG INCREASES.

THE PAST SUMMER THOUGH, AS THE INTRO MENTIONED WITH THE WRITERS STRIKE AND ACTORS STRIKE AT A COUPLE OF BIG VICTORIES FROM UPS AND AMERICAN AIRLINES, WE ARE STARTING TO SEE SOME OF THOSE ORGANIZING EFFORTS AND STRIKE PREPARATION EFFORTS TRANSLATE TO ON THE GROUND GAINS FOR WORKERS AND THEIR CONTRACTS.

I THINK WHAT WE WILL WAIT TO SEE IS WHAT HAPPENS WITH THE BIG THREE AUTOMAKERS AS THEY ARE GEARING UP FOR A POSSIBLE STRIKE THAT WOULD START NEXT WEEK.

GAUTAM: ROY, ARE YOU SEEING CHANGES IN CORPORATE BEHAVIOR BEING DRIVEN BY INCREASED LABOR PRESSURE?

ROY: I THINK CORPORATIONS ARE JUST STARTING TO WAKE UP TO THIS.

I THINK FOR DECADES, BUSINESS LEADERS IN THE U.S. HAVE MOSTLY BEEN ABLE TO IGNORE ORGANIZED LABOR BECAUSE THE PERCENTAGE OF PEOPLE IN THE PRIVATE SECTOR WHO WERE UNIONIZED WAS SO LOW, LOW TEMPERATURE, THAT A LOT OF -- BELOW 10%, THAT A LOT OF BUSINESS LEADERS SAY IT IS LIKE THE LIBRARY.

THEY KNEW IT WAS IMPORTANT YEARS AGO, MAYBE THEY RESPECTED IT, BUT THEY DID NOT THINK ABOUT IT VERY MUCH.

WITH THIS ATTENTION RENEWED ON ORGANIZING, NOT JUST UNIONIZATION, BUT ALL KINDS OF EMPLOYEE ORGANIZATION.

PEOPLE PASSING AROUND SPREADSHEETS SHARING EACH OTHER'’S SALARIES.

PETITIONS CALLING ON THE COMPANY TO BE MORE ACTIVE ON A SOCIAL ISSUE LIKE CLIMATE CHANGE.

THERE'’S NOW A WHOLE TOOLKIT OF HOW TO RELATE TO YOUR WORKFORCE THAT BUSINESS LEADERS HAVE NOT PRACTICED IN A LONG TIME.

IT'’S TIME FOR THEM TO PRACTICE IT.

GAUTAM: HOW MUCH OF THIS IS A PRACTICE OF HISTORICALLY TIGHT LABOR MARKETS?

ROY: I PERSONALLY THINK VERY LITTLE.

I WOULD BE CURIOUS WHAT CLARE THINKS.

WE LEAD A GROUP AT THE ASPEN INSTITUTE, A GROUP OF BUSINESS LEADERS TRYING TO RE-EXAMINE THEIR RELATIONSHIP WITH ORGANIZED LABOR.

MANY OF THEM ARE IN INDUSTRIES WHERE THE LABOR MARKET IS NOT TIGHT.

IN SEGMENTS WHERE IT IS TIGHT, THAT CAN CHANGE CONDITIONS.

LIKE MANY FORMS OF INTENSE SOCIAL ACTION, THAT OFTEN HAPPEN NOT WHEN THINGS ARE GETTING WORSE, BUT WHEN THINGS HAVE BEEN BAD FOR A LONG TIME AND THEN THEY GET BETTER, AND PEOPLE HAVE A LITTLE HOPE.

SO THE HOT LABOR MARKET DID GIVE WORKING PEOPLE A SENSE THAT THEY HAD LEVERAGE.

CLARE: I THINK FROM MY PERSPECTIVE, THE TIGHT LABOR MARKET COMING OUT OF THE PANDEMIC CERTAINLY HAD AN IMPACT ON THIS, BUT I THINK IT'’S ALSO IMPORTANT TO REMEMBER THAT THERE IS OFTEN A CONTAGION EFFECT WITH THESE SORTS OF THINGS, WHICH IS TO SAY THAT A LOT OF THE WORKERS WE ARE SEEING ORGANIZED NOW -- I LIVE IN WESTERN MASS, AT AMHERST.

WE HAVE A LITTLE STRIP OF SEEING BARNES & NOBLE'’S WORKERS ORGANIZED, MICHAEL'’S, TRADER JOE'’S, ALL IN ONE BLOCK.

A LOT OF THE ISSUES THEY ARE RAISING ABOUT LOPE, ABOUT SCHEDULING ISSUES -- ABOUT LOW PAY, ABOUT SCHEDULING ISSUES, NONE OF THOSE ARE NEW.

WHAT WE DO SEE IS WORKERS PERSPECTIVE ON WHAT'’S POSSIBLE, WHAT'’S POSSIBLE WHEN THEY ORGANIZED, AND THE FACT THAT THEY CAN WIN, THAT IS A SHIFT.

THAT'’S JUST TO SAY THAT I THINK THE TIGHT LABOR MARKET AS A PART OF THAT STORY.

I THINK ONCE THAT GETS GOING, WORKERS LOOK AROUND AND SEE THE OTHER FOLKS NEXT TO THEM STARTING TO WIN CONTRACTS.

THAT SPURS ON ADDITIONAL ORGANIZING EFFORTS.

ROY: THAT CONTAGION POINT I THINK IS SO IMPORTANT, JUST A SHOW LIKE THIS ONE PROPAGATES THE IDEA.

IF YOU LOOK AT WHO'’S ORGANIZING, IT DOESN'’T FEEL LIKE TRADITIONAL ORGANIZING.

LOOK AT A GUY LIKE CHRIS SMALLS WHO LED THE AMAZON LABOR UNION, HE'’S A CELEBRITY.

HE LOOKS LIKE A CELEBRITY AND ACTS LIKE ONE.

IT CREATES INSPIRATION FOR PEOPLE.

WHEN YOU CAN FIND ACCOUNTS ON TWITTER THAT HAVE FASHIONABLE UNION LEADERS, THAT IS A KIND OF THING THAT INSPIRES FOLKS.

PLUS, NEW FOLKS ENTERING THE WORKING CLASS.

THE FOLKS WHO ORGANIZED THAT STARBUCKS DON'’T LOOK LIKE THE PEOPLE WHO ARE STRIKING AT AN AUTO FACTORY.

THEY ARE A DIFFERENT KIND OF A PROFESSIONAL AND PERSONAL BACKGROUND, SO WHEN PEOPLE ENCOUNTER CONDITIONS, EVEN IF THEY HAVE EXISTED FOR A LONG TIME BUT THEY SEE THEM IN A NEW AND FRESH WAY, IT GETS ACTION.

GAUTAM:GAUTAM: WE'’VE SEEN UP SURGES IN UNION MEMBERSHIP, BUT AS A FRACTION OF THE LIVER FORCE, IT HAS NOT GONE UP VERY MUCH.

IS THAT GOING TO TAKE STRUCTURAL CHANGE, OR ARE WE GOING TO SEE UNIONS ADAPT THIS NEW TACTIC AS THEY ARE LEARNING HOW TO STRIKE BETTER?

CLARE: WELL, I DON'’T THINK IT'’S A MATTER OF JUST UNIONS GOING OUT AND RECRUITING.

A LOT OF THIS IS WORKERS THEMSELVES STARTING TO COME TOGETHER.

I THINK THAT WE WILL CONTINUE TO SEE THAT INCREASE.

WE ARE ALSO SEEING SOME POLICY CHANGES THAT ARE ABLE TO SUPPORT THAT.

THERE HAVE BEEN A COUPLE RECENT DECISIONS FROM THE NATIONAL LABOR RELATIONS BOARD THAT HAVE BEEN FAVORABLE TOWARDS UNIT AS IT -- UNIONIZATION AND WILL OPEN THE DOOR IN THE FUTURE TO ALLOW UNIONS TO WIN ELECTIONS, AND TO CLOSE SOME OF THOSE LOOPHOLES THAT FOR A LONG TIME HAVE MADE IT POSSIBLE FOR EMPLOYERS TO ACT ILLEGALLY WITH IMPUNITY.

ROY: AND PERSONALLY, I THINK IT IS TOO EARLY TO TELL.

WE DON'’T KNOW HOW MUCH THIS WILL CHANGE.

I THINK THAT WHAT'’S CLEAR IS THAT WHETHER OR NOT THE UNION MEMBERSHIP CHANGES, THE PERCENTAGE OF THE POPULATION, THE WAY CEOS LEAD IS GOING TO HAVE TO CHANGE.

WE HAVE WRITTEN A MAGAZINE ARTICLE IN HARVARD BUSINESS REVIEW WHICH IS THE FIRST TIME THEY'’VE HAD A MAGAZINE ARTICLE ABOUT LABOR UNIONS IN 32 YEARS.

WHAT WE SAY IS CEOS OFTEN HAVE TO LEAVE AS IF THEIR WORKFORCE IS ORGANIZED, WHETHER OR NOT IT IS, BECAUSE THAT IS WHAT WORKERS ARE STARTING TO DEMAND.

FOR YEARS, COMPANIES HAVE SUCH A WORKERS, WE WANT YOU TO FEEL LIKE THIS COMPANY REFLECTS YOUR VALUES, WE WANT IT TO BE MORE THAN JUST A JOB, AND ON SOME LEVEL, WORKERS ARE JUST TAKING THEM AT THEIR WORD.

IF THAT'’S WHAT YOU WANT, THEN THIS IS WHAT I WANT TO SEE.

SO I REALLY THINK THAT LEADERSHIP SKILL, AND I TEACH AT BERKELEY'’S BUSINESS SCHOOL, THE MOST IMPORTANT UNDER PRACTICED LEADERSHIP SKILL FOR BUSINESS LEADERS OF THE NEXT 20 YEARS MIGHT BE HOW TO LEAD AND ORGANIZE WORKFORCE.

GAUTAM: YOU ARE MAKING ME FEEL GUILTY, I'’VE PUBLISHED ENOUGH THAT I SHOULD HAVE PUBLISHED SOMETHING EARLIER.

WHY HAS IT BEEN SO HARD FOR SO MANY BUSINESS LEADERS TO ACKNOWLEDGE THAT ALL THE STUFF I'’VE BEEN SAYING ABOUT LEADERSHIP AND VALUES AND MY WORKERS BEING PART OF THIS, PEOPLE WERE ACTUALLY GOING TO LISTEN TO ME AND TAKE IT SERIOUSLY?

ROY: I THINK THAT BUSINESS LEADERS, THEIR ROLE MODELS WERE MOSTLY MONARCHS.

THE PEOPLE WHO LEAD PUBLIC COMPANIES WITH TWO CLASS SHARES AND THAT KIND OF THING.

THEY END UP HAVING A SENSE OF INFLATED POWER.

SHARING POWER IS JUST NOT THE KIND OF THING THAT COMES NATURALLY TO THEM.

IT IS A NEW SKILL.

GAUTAM: WHAT ADVICE WOULD YOU GIVE TO A BUSINESS LEADER TRYING TO LEAD SUCCESSFULLY IN THIS NEW ENVIRONMENT?

CLARE: WELL, I SUPPOSE I SHOULD SAY THEY SHOULD BE AWARE OF WHAT THE LAWS ARE AROUND WORKERS'’ RIGHTS TO UNIONIZE.

I THINK A BIG PART OF THE STORY ON WHY UNIONS HAVE DECLINED SO MUCH OVER THE LAST -- SINCE THE 1970'’S, HAS BEEN ABOUT CORPORATIONS GETTING VERY GOOD AT BOTH STOPPING UNITIZATION EFFORTS AND BREAKING -- UNIONIZATION EFFORTS AND BREAKING UNIONS.

I WOULD SAY FOR EMPLOYERS GOING FORWARD, BEING AWARE OF WHAT THOSE RULES ARE AND THE FACT THAT WORKERS DO HAVE A PROTECTIVE RIGHT TO ORGANIZE IN THE U.S., THAT IF THAT'’S WHAT WORKERS DECIDE TO DO, THAT IS THEIR RIGHT TO DO SO.

GAUTAM: LET ME PUSH ON THAT A LITTLE BIT.

THEY NEED TO FOLLOW THE LAW IS A VERY LOW BAR, RIGHT?

ROY: MOST DON'’T HEED IT.

[LAUGHTER] GAUTAM: THE UNITED STATES HAD A UNIQUELY VIOLENT LABOR MOVEMENT AND PROBABLY THE MOST ANTAGONISTIC LABOR RELATIONSHIPS OF ALMOST ANY MOVEMENT.

IF SOMEONE SAID MAYBE THAT'’S NOT THE MOST FRUITFUL WAY TO GO FORWARD, WHAT WOULD YOU TELL THEM TO DO?

ROY: IT'’S LIKE ANY OTHER BUSINESS RELATIONSHIP, IF YOU HAVE A COUNTERPARTY THAT'’S POWERFUL, YOU NEED TO TREAT THEM WITH RESPECT.

IT IS A TWO-WAY STREET.

I'’VE SEEN CASES, I THINK IN A FIGHT, IT ONLY TAKES ONE SIDE TO THINK IT IS AN ACT -- AND HAS ANTAGONISTIC WAR TO THINK IT IS AN ANTAGONISTIC WAR.

UNIONS FOR SEVERAL REASONS OFTEN START THE ORGANIZING CAMPAIGN WITH PERSONAL ATTACKS AGAINST THE CEO.

THAT MAKES IT REALLY HARD FOR THAT PERSON TO ENTER INTO A COLLABORATIVE MINDSET.

IT'’S A TWO-WAY STREET, BUT ON THE BUSINESS SIDE, YOU ARE RIGHT THAT FOLLOWING THE LAW IS A LOW BAR.

MY GUESS IS YOU PROBABLY JAY WALKED IN THE LAST YEAR BECAUSE THE PENALTIES ARE NOT THAT STEEP .

THE NATIONAL LABOR RELATIONS BOARD HAS 1/10 THE BUDGET OF THE DISTRICT ATTORNEY OF THE CITY OF LOS ANGELES.

THAT MEANS IT'’S A WILDLY UNDERFUNDED AGENCY TO ENFORCE AND THE PENALTIES CAN BE MODEST.

THEY HAVE TO DO IT BECAUSE IT'’S IN THEIR SELF-INTEREST AND JUST INNOVATE AND EXPERIMENT ON HOW TO HAVE A HEALTHY RELATIONSHIP.

GAUTAM: I LEAVE -- LIVE IN BOSTON, I BELIEVE IT'’S ACTUALLY AGAINST THE LAW CANNOT JAY WALK HERE.

WHAT IS THE NEXT PHASE OF THIS LABOR MOVEMENT ACTIVISM?

WHAT DO YOU THINK WILL HAPPEN THAT WILL CHANGE THE WAY WE THINK ABOUT LABOR IN THE NEXT YEAR?

CLARE: I GUESS I WOULD SAY, I DON'’T KNOW IF I WANT TO SAY PHASE, BUT AS THE STRENGTH AND POWER OF ORGANIZED LABOR GROWS AND IF IT CONTINUES TO GROW IN THAT WAY, I THINK HAVING A MEANINGFUL SHARING OF POWER WITHIN BUSINESSES THAT ALLOWS WORKERS, THE PEOPLE WHO DO THE WORK AND OFTEN KNOW IT THE BEST, TO BE PART OF THOSE DECISIONS ABOUT HOW BUSINESSES PROCEED AND TO REALLY SEE A MORE EQUAL POWER SHARING BETWEEN EMPLOYERS AND WORKERS WOULD REALLY BE THE NEXT STEP.

GAUTAM: THANK YOU SO MUCH FOR JOINING US TODAY.

IT WAS GREAT HAVING YOU.

ROY: THANK YOU.

CLARE: THANK YOU.

GAUTAM: THAT'’S IT FOR TONIGHT.

WE WILL BE BACK TOMORROW.

THANKS FOR WATCHING.

I AM GAUTAM MUKUNDA, AND GOOD NIGHT.