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WASHINGTON — US President Joe Biden, who is campaigning for reelection with a heavy focus on easing voters' financial woes, on Tuesday launched a bid to lower the cost of certain prescription drugs — a move Big Pharma pledged to continue battling in court.

"Millions of Americans are forced to choose between paying for medications they need to live, or paying for food, rent, and other basic necessities. Those days are ending," the Democratic president pledged in a statement. 

Later, in a White House speech, Biden said pharmaceutical giants were "hoping the courts will do what Democrats in Congress wouldn't do: protect their exorbitant profits and keep negotiations from happening".

Using new powers under last year's Inflation Reduction Act, a major legislative package of energy transition policy and social reforms, the US government has chosen 10 drugs for which Medicare, the health insurance scheme for people over 65, will be able to negotiate the price. 

Medicare has previously not been able to negotiate drug prices, which has resulted in US drug costs being higher than "any other major economy in the world", Biden said.

The United States pays on average 2.5 times more for prescription drugs than countries such as France, according to a study by the Rand Corporation.

According to the US government, senior citizens last year had to spend a total of $3.4 billion out of their own pockets to buy the 10 drugs targeted in the list, which include treatments for blood clots, diabetes, heart problems, psoriasis and blood cancers.

White House officials would not specify how much cost-cutting they were expecting to see from the negotiations, but Biden cited the government's ability to get drug prices for veterans that were "50 per cent less than Medicare".

Under the IRA, the federal government can continue to add more drugs each year to its negotiating list.

The pharmaceutical industry has opposed Medicare price negotiations for decades, and several companies have already announced lawsuits against the action.

One of the treatments on the initial list, the anticoagulant Eliquis (apixaban), is used by more than 3.7 million Medicare beneficiaries.

The laboratory that manufactures it, Bristol Myers Squibb, says that Medicare beneficiaries who are prescribed this drug "are currently able to get it with relatively low out-of-pocket costs at an average of $55 per month", and claims that Biden's initiative puts that "at risk".

The Johnson & Johnson group, which produces two of the drugs on the list, said that the reform would "constrain medical innovation, limit patient access and choice, and negatively impact overall quality of care".

2024 in view 

With the change in prices not set to take place until January 2026, the immediate political benefit for Biden is uncertain.

The 80-year-old president, whose reelection bid has struggled to find much enthusiasm, is counting on announcements like the one made Tuesday, as well as a measure to freeze the price of insulin at $35 a month for many Americans, to bolster his campaign

Biden often touts his relentless optimism, and on Tuesday again criticized talk by Republican White House candidates — especially former president Donald Trump — of US "decline."

"Better days are coming," he promised.

TOKYO — Toyota said on Tuesday it has been hit by a technical glitch forcing it to suspend production at all of its 14 factories in Japan.

The world's biggest automaker gave no further details on the stoppage, which began Tuesday morning, but said it did not appear to be caused by a cyberattack.

The company said the glitch prevented its system from processing orders for parts, resulting in a suspension of a dozen factories or 25 production lines on Tuesday morning.

The company later decided to halt the afternoon shift of the two other operational factories, suspending all of Toyota's domestic plants, or 28 production lines.

"We do not believe the problem was caused by a cyberattack," the company said in a statement to AFP.

"We will continue to investigate the cause and to restore the system as soon as possible."

The incident affected only Japanese factories, Toyota said.

It was not immediately clear exactly when normal production might resume.

The news briefly sent Toyota's stocks into the red in the morning session before recovering.

Last year, Toyota had to suspend all of its domestic factories after a subsidiary was hit by a cyberattack.

The company is one of the biggest in Japan, and its production activities have an outsized impact on the country's economy.

Toyota is famous for its "just-in-time" production system of providing only small deliveries of necessary parts and other items at various steps of the assembly process.

This practice minimises costs while improving efficiency and is studied by other manufacturers and at business schools around the world, but also comes with risks.

The auto titan retained its global top-selling auto crown for the third year in a row in 2022, and aims to earn an annual net profit of 2.58 trillion yen ($17.6 billion) this fiscal year.

Major automakers are enjoying a robust surge of global demand after the COVID-19 pandemic slowed manufacturing activities.

Severe shortages of semiconductors had limited production capacity for a host of goods ranging from cars to smartphones.

Toyota has said chip supplies were improving and that it had raised product prices, while it worked with suppliers to bring production back to normal.

However, the company was still experiencing delays in the deliveries of new vehicles to customers, it added.

BEIJING — Chinese electric car (EV) giant XPeng said on Monday it would buy the EV subsidiary of ride-hailing platform Didi for more than $740 million and launch a new brand of vehicles.

Founded in the southern province of Guangdong in 2015, XPeng is one of dozens of Chinese startups to emerge in recent years to take advantage of the boom in electric vehicles in the world's largest auto market.

Didi is China's leading car-hailing app but also operates a subsidiary designing electric vehicles. 

In a filing to the Hong Kong Stock Exchange — where XPeng is listed — the car giant said it had reached a deal with Didi to buy that subsidiary for $744 million.

XPeng will also partner with Didi to launch a new brand of electric vehicles next year.

Markets welcomed the deal, which allows the Chinese manufacturer to eliminate a potential competitor and gain access to its advanced technology. XPeng shares gained almost 13 per cent Monday morning. 

The brand — which also markets some of its products in Europe — employs around 14,400 people and has offices in Silicon Valley and Amsterdam.

XPeng sold 41,435 vehicles in the first half of 2023, down 40 per cent year on year, according to results published this month. 

China, the world's largest emitter of greenhouse gases, is aiming for the majority of car sales to be electric and hybrid by 2035.

Generous purchase subsidies have fuelled a boom in EVs in recent years, driven by firms such as BYD, Nio, XPeng and others.

BEIJING — Deeply indebted Chinese developer Country Garden has delayed the deadline for a vote by bondholders on whether to extend repayment on a key note until next week, as it flirts with a potentially catastrophic default, Bloomberg reported on Friday.

One of China's biggest builders, Country Garden has accumulated debts of more than $150 billion and said this month it had failed to make interest payments on two bonds — putting it at risk of default.

The company has asked to extend payment on a 3.9 billion yuan ($535 million) note until 2026, originally setting an online vote among bondholders to end at 10pm Beijing time Friday (1400 GMT).

However Bloomberg News, citing a filing to the Shanghai Stock Exchange's private disclosure platform, reported just hours before the original deadline that the company had pushed it back to August 31.

If bondholders refuse, Country Garden could become the biggest Chinese real estate firm to default since rival Evergrande in 2021.

The company also faces a deadline for a separate bond payment at the beginning of September.

Country Garden's cash flow problems have ignited fears that it could collapse and spread turbulence through China's economy and financial system.

The nation's economic rise has been largely founded on property and construction, which account for about a quarter of GDP.

But a years-long government credit crunch and crippling debts among many developers have hit the sector hard in recent years.

Beijing has offered more support for the industry in the face of a wider economic slump, and on Friday announced a suite of new mortgage easing policies.

Country Garden is expected to publish its results for the first half of the year in the coming days and has said it expects a net loss of as much as 55 billion yuan ($7.5 billion).

Adding to the pressure on the firm, 31 billion yuan in bonds will expire in 2024, according to rating agency Moody's.

Ratings firm Fitch said on Wednesday it was downgrading a Country Garden subsidiary to junk, saying the unit's "growth, brand reputation, profitability and funding access may be negatively affected by the heightened liquidity pressure" at the developer.

WASHINGTON — The US Federal Reserve (Fed) is prepared to raise interest rates higher — and hold them there — to bring down above-target inflation, but will proceed "carefully" going forward, Chairman Jerome Powell said Friday.

"We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective," he told the Jackson Hole Economic Symposium in Wyoming. 

After 11 rate hikes in less than 18 months, the US benchmark lending rate now sits at a range between 5.25 and 5.5 per cent — its highest level in 22 years.

However, the rapid cycle of interest rate increases has failed to definitively quash inflation the rapid cycle of interest rate increases has failed to definitively quash inflation, which remains stuck above the Fed's long-term target of 2 per cent despite slowing sharply from recent multidecade highs.

Navigating 'under cloudy skies' 

Despite insisting the Fed could yet raise rates, Powell urged caution moving forward during his speech. 

"As is often the case, we are navigating by the stars under cloudy skies," he said.

"Given how far we have come, at upcoming meetings we are in a position to proceed carefully as we assess the incoming data and the evolving outlook and risks."

US stocks entered a bumpy period following Powell's remarks, before rising sharply in the afternoon.

"The overall tone of Chair Powell's Jackson Hole speech is one of cautious optimism coupled with clear determination to take no chances with the inflation outlook," Pantheon Macroeconomics' Chief Economist Ian Shepherdson wrote in a note to clients. 

"If that requires further tightening, in the Fed's view, then so be it. But nothing is guaranteed," he added.

"Relative to market expectations, Powell perhaps delivered a bit more on the side of potential further rate cuts, and a bit less on the idea that average policy rates will be higher," Citigroup economists wrote in an investor note after the speech. 

Reaffirming two per cent target 

Powell told the Jackson Hole retreat that the Fed's 2-per cent goal "is, and will remain, our inflation target".

"We will need price stability to achieve a sustained period of strong labour market conditions that benefit all," he said.

"We will keep at it until the job is done," he added.

Analysts and policymakers remained split ahead of Powell's speech on the likelihood of a 12th hike to tackle inflation at the Fed's next rate-setting meeting, in September.

Surprisingly strong jobs and growth data in recent months indicate that the US economy is in better health than many economists feared earlier this year when they forecast the country was headed for recession.

In his speech, Powell announced the Fed estimated a slight annual increase in its favoured inflation measure in July, known as the personal consumption expenditures (PCE) price index.

PCE inflation in July rose to an annual rate of 3.3 per cent, according to the Fed's calculations. Official figures will be published by the Commerce Department on Thursday.

Futures traders currently assign a probability of around 80 per cent that the Fed will vote to pause rates at its rate-setting meeting on September 19-20, according to data from CME Group. 

ECB reaffirms inflation target

The other notable speech Friday came from European Central Bank (ECB) President Christine Lagarde, who is grappling with the challenge of higher inflation and lower growth. 

Lagarde said it was crucial for central banks to "provide a nominal anchor for the economy and ensure price stability in line with their respective mandates", according to prepared remarks.

"In the current environment, this means — for the ECB — setting interest rates at sufficiently restrictive levels for as long as necessary to achieve a timely return of inflation to our two per cent medium-term target," she added.

Euro area inflation recently declined to an annual rate of 5.3 per cent, while growth was barely positive — in sharp contrast with the United States. 

However, there are variations within the 20-member Eurozone currency bloc.

Germany, which is Europe's largest economy, has in recent months been dealing with so-called "stagflation" — a toxic combination of economic stagnation and high inflation. 

It is the only G-7 economy expected to contract this year, according to the International Monetary Fund, while other large Eurozone economies, like France and Spain, are in better shape. 

Against this backdrop, the ECB has had to tread carefully, raising interest rates in smaller increments than the Fed.