Cameron Costa (2:04)

Plus, a snap election in Japan, a jobs Wednesday coming up and Congress takes on housing affordability. Our Emily Wilkins says building is not so easy.

Emily Wilkins (2:15)

A lot of lawmakers want to hold out for the more difficult things and that sometimes leads these bills being slowed down and held up.

Cameron Costa (2:23)

It's Monday, February 9, 2026 and Squawk Pod begins right now.

Kevin Hassett (2:29)

Stand Becky by in three, two, one.

Andrew Ross Sorkin (2:35)

Good morning everybody. Welcome to Squawk Box right here on cnbc. We're live from the NASDAQ Marketsite in Times Square. I'm Becky Quick along with Andrew Ross Ork and Joe is out today.

Becky Quick (2:46)

We're here. This is by the way, the most called in day sick.

Andrew Ross Sorkin (2:50)

Yeah. Manic Monday of the year after Super Sunday.

Becky Quick (2:53)

Less people show up for work on this Monday than any other day of the year.

Andrew Ross Sorkin (2:58)

We just want a little credit for being here today.

Becky Quick (3:00)

I thought it was worth mentioning just. Just in case. It is.

Andrew Ross Sorkin (3:03)

We are here.

Becky Quick (3:05)

Meantime, let's talk about what's on the spot Planner. For those of you who are working today, here's what's going on. We got some economic data and earnings. Actually not much today in part. You know, there's long been talk about whether this should be a national holiday. We can get to that. But on Wednesday we're going to get the January jobs report. It was postponed by the brief government shutdown delayed. January CPI inflation data due on Friday. Then on the earnings front, we're going to hear from Coca Cola. A lot of people drinking Coca Cola last night. I don't know. Ford, McDonald's, CVS, Airbnb and Coinbase, among others. We're going to have to talk about that Coinbase commercial. I don't know what your thought of the karaoke with the Backstreet Boys last night. I was not impressed. There were a lot of people who like the karaoke of the Backstreet Boys and then they seem to get offended that it was a Coinbase commercial for some reason. That seemed to be the scuttlebutt.

Andrew Ross Sorkin (3:58)

They thought about it a lot more than I did. Shall I say there it is. I don't know why we're talking about the stuff that didn't work last night.

Becky Quick (4:05)

I thought it worked. I thought it worked. I thought there's so many people around the country that started singing in the.

Andrew Ross Sorkin (4:11)

Opening where you said we're going to talk about what worked last night and what didn't. How about we let the stuff that didn't work go away?

Becky Quick (4:17)

But I'm showing this as a working ad. I thought this was the fact that so many people are talking about it and actually participated in this means it worked.

Scott Gottlieb (4:27)

I don't know.

Andrew Ross Sorkin (4:27)

My 23 year old was even like, these commercials suck. Japanese Prime Minister.

Becky Quick (4:33)

That commercial or just all the commercials.

Andrew Ross Sorkin (4:35)

In general, not that commercial in particular.

Becky Quick (4:37)

In general.

Andrew Ross Sorkin (4:37)

She was not impressed. The Japanese Prime Minister Sanae Takeichi and her ruling Liberal Democratic Party securing an overwhelming mandate in yesterday's snap election. The party secured a super majority with more than two thirds of the seats in the lower house. After that victory, The Nikkei jumped 3.9% to a record high above 56,000. The yen actually strengthened against the dollar as well. For the year, it's up by about three and a half percent versus the dollar.

Becky Quick (5:09)

And then in corporate news, shares of Wegovy maker Novo Nordisk jumping today. This after Hims and hers said it would pull its copycat weight loss drug off the market. That's the pill that they were going to be marketing. Novo Dordisk and the FDA had threatened legal action against Hims and Hers. Its treatment, featuring the same active ingredient in Wegovy, was priced as low as $49 a month versus the WeGovy pills cost of about $100 or more. Over the weekend, Hims and Hers posted a message to social media saying the company has had what it called constructive conversations with industry stakeholders and as a result has decided to stop selling construction.

Andrew Ross Sorkin (5:48)

Never mind, we can't do this. The stock is off by 15.8% as a result. Those guys are always playing fast.

Becky Quick (5:55)

I think what's going to end up happening is there'll be a deal made is what I think.

Andrew Ross Sorkin (5:58)

I don't know.

Becky Quick (5:58)

There's some kind of deal made, deal.

Andrew Ross Sorkin (6:00)

That they cut last, last time Novo got totally hosed by it and said forget it. I don't know that they would get in bed with them ever again.

Becky Quick (6:06)

I am, I'm, I'm betting that the reason that this happened actually is that there's some settlement.

Andrew Ross Sorkin (6:11)

I don't. We have Scott Gottlieb who's coming on. He's gonna talk a little bit about this because you said did see the unusual move from the FDA last week, saying, hey, Marty Makary posted this on his actual Twitter on his X feed, said that they were looking into this. There were big concerns along the way. And Scott can talk to us a little bit more about this too.

Becky Quick (6:30)

Hims and hers still ran a Super bowl ad last night featuring the rapper Common voicing a message that America's wealth gap is a health gap. There's also the ad with Serena Williams for ro.

Andrew Ross Sorkin (6:42)

I saw that.

Becky Quick (6:43)

Yeah. And that seemed to get a lot of concerns.

Andrew Ross Sorkin (6:46)

She lost 35 pounds, which I hadn't realized. AI perhaps the biggest theme of last night's super bowl commercials, there were ads to tug at the heartstrings, maybe make viewers laugh or at least try and make some of us cringe, maybe inadvertently. Anthropic ran a 60 second pregame ad featuring a young man who thinks he's getting therapy. But the session turns into a pitch. Pitch For a cougar dating site, the tagline ads are coming to AI, but not to Claude. The company's in game ads are scrawny 20 something getting a sales pitch when he's looking for fitness advice.

Becky Quick (7:24)

I have to say, I thought those two ads were some of the best. I don't know if you liked them. I don't know that they were cringy. I was. I thought, I just like the game of it. I know that, by the way, Sam Altman and OpenAI doesn't love them because they think that they misrepresent the way OpenAI is ultimately going to be inserting ads. I mean, I think part of the big issue is actually how ads do get implemented into AI, and I think they will be he, he, he. As he said, first, the good part is that they're funny and I laughed. The second is why he thinks they're so dishonest.

Andrew Ross Sorkin (7:56)

Oh, feeling a little hurt, it sounds so.

Becky Quick (7:58)

He had published that, by the way, earlier last week when the ads first came out. But I thought they sort of. This was the first super bowl where people were really talking about AI. I mean, well, in a real way.

Andrew Ross Sorkin (8:11)

A lot of ads about it.

Becky Quick (8:12)

But in terms of what. In terms of the way they were talking about it, I thought it was pretty, pretty clever.

Scott Gottlieb (8:17)

Hey, Whoa.

Becky Quick (8:19)

What is that?

Andrew Ross Sorkin (8:19)

How are you, Alexa?

Becky Quick (8:20)

Plus that she's not living here. That is full on AI. One minute we're all buddy buddies, then the next minute she's trying to kill us.

Andrew Ross Sorkin (8:26)

Now, Chris, how exactly would I do that? Also, Amazon ran a spot with actor Chris Hemsworth, imagining all the ways that Alexa could kill him before he learns to love it because it offers him a cinnamon rub and a massage. OpenAI went for a cool vibe, touting the company's coding agent, Codex.

Becky Quick (8:47)

I thought that was, by the way, one of the most interesting decisions, because instead of focusing on the consumer.

Andrew Ross Sorkin (8:52)

Yeah, I actually kind of like this one.

Becky Quick (8:55)

They focused on, you know, the public. Not that. Not the public, but actually coders. I thought that was sort of an interesting decision in part because I would have thought if you were going to spend this amount of money, that maybe this was the moment you were trying to get more people onto Chat GPT and that this really was a more narrow, focused, narrowly focused ad in certain ways. I did love that it was about builders. I do like, and I think for our kind of crowd, we, like, think, you know, builders and such, but on a broader based, you know, approach. I don't know.

Andrew Ross Sorkin (9:28)

Google's Gemini went more sentimental With a user asking Gemini to help visualize a child's bedroom and a family's backyard. The game also featured ads hyping AI from Meta, Wix and Gen Spark. Yeah, it was probably the predominant theme of this advertising bonanza that was the super bowl last night.

Becky Quick (9:49)

I just want to say, I know it's not tackling any of these things. The latest potato chip ad with the father and the daughter handing over the farm. I like that a lot. And I thought all the Dunkin stuff, Ben will always get me with all the Dunkin ads. I love those ads.

Andrew Ross Sorkin (10:03)

They've put a lot into it. But last year's was better.

Becky Quick (10:06)

Okay.

Andrew Ross Sorkin (10:07)

Yeah. Congress looking to rein in the high cost of housing in America. Emily Wilkins joins us right now with the story on that. And this is something that every politician everywhere is trying to do something about right now. It feels like.

Emily Wilkins (10:23)

Emily Absolutely, Becky. And that's actually why we're seeing such strong bipartisan support here. So this is a bill, it's aimed at increasing the supply of housing, decreasing the costs. It is set to be passed by the House today with a strong bipartisan support. And this is just the latest push from lawmakers of both parties to try to address the affordability Crisis in the U.S. now, the U.S. does face a housing shortage, as you mentioned. Goldman Sachs estimates that about 3 million new homes would to be built. To resolve the issue, the bipartisan bill we're going to see today, it's going to reduce housing and environmental regulations around constructing some multifamily homes. It will also encourage builders to use manufactured and modular housing as those are faster way to get homes built. It would also give grants to local governments to help streamline building homes by offering pre reviewed housing designs and include several provisions meant to bolster community banks, which in turn should bolster their ability to provide mortgages. Now, the Senate actually has already passed their own version of a housing bill last year that also was done with very strong bipartisan support. Now, the two bills do largely overlap in their provisions, although some items on community banks and some on housing are unique to each bill. So the next step would be for both chambers to come together, agree on a compromise draft. And given the wide support, Becky, there is a real chance here that this makes it to Trump's desk well before the midterms and could very much be a big midterm talking point.

Andrew Ross Sorkin (11:51)

Becky, before the midterms, this is something that the Senate already passed last year and it's going to take until the midterms to get it turned into A lot. This tells you why, even when you got both sides, everybody agrees on something you can't get it through through the Congress and then passed into a law sooner.

Emily Wilkins (12:09)

I'm giving myself a little bit of Runway here, Becky. I don't. I don't want to say exactly when they're going to be able to get this done, but if you look at what's happening on Capitol Hill and you look at the bills that actually stand a chance of crossing that finish line this year, you know how it goes. It's a midterm, which means in just a couple of months, any sort of real legislating and lawmaking on Capitol Hill is going to peter down while the campaigns ramp up. But this does actually seem to be something with the momentum and with the legwork in to actually get done, which is that there aren't too many other bills we can really say that about this year.

Andrew Ross Sorkin (12:39)

You know, a lot of what has to happen is at a local basis. When you look at regulations, when you look at permitting and some of those issues, people will say it's not a national market. You have to go market by market. And this is the issue with so many of those things, I guess. I wonder how much this actually does. And you also said that they're going to be encouraging modular houses. How does that mean by offering tax incentives?

Emily Wilkins (13:04)

So I'll start with the second one first. So what they are doing, particularly in this House bill, is they're changing a couple definitions around exactly what does or doesn't qualify as modular housing. And they say that that is actually going to make it easier for builders to say, hey, we're going to be doing this type of house.

Andrew Ross Sorkin (13:21)

Changing a couple of definitions. Takes them over a year to get this together, you understand.

Emily Wilkins (13:30)

I know, I know. And then I believe your other question was on the localities. I mean, the housing bill, what it would do is it would ask the department for housing to actually come up with some standard definitions, some standard best practices when it comes to zoning. I believe the Senate bill actually goes a bit further on that in making specific recommendations. But you're absolutely right, Becky. This is something that happens at the local level. And this bill does try to make sure that it is trying to get localities and communities on board, either through incentives like grants or through recommendations or other national standards.

Andrew Ross Sorkin (14:04)

And that's when they're open for business. Wow. You know, I didn't come into this.

Emily Wilkins (14:09)

Well, they should. Should at least be open until September, unless you're the Department of Homeland Security. That's right. We'll see what happens on Friday for that.

Andrew Ross Sorkin (14:17)

You know, I like a lot of the senators and a lot of the congressional representatives who come on here. I don't understand why it seems like such a logjam on a larger basis because I don't think any of them want to be that ineffective. It feels like, yeah, there are things, if we can all agree on them, let's push it through as quickly as we can. Right.

Emily Wilkins (14:41)

Becky, the story on the Hill so often is that there actually is a lot of agreement on many of these issues. But because once you kind of get the low hanging fruit, it's harder to get the more difficult things. A lot of lawmakers want to hold out for the more difficult things. And that sometimes leads these bills being slowed down and held up because lawmakers aren't comfortable voting yes unless they get everything that they want or most of what they want.

Andrew Ross Sorkin (15:05)

Yeah. I've heard it attributed to law and.

Emily Wilkins (15:07)

It really, it's not. It's also not environment that's always the.

Andrew Ross Sorkin (15:09)

Enemy of the good, right?

Emily Wilkins (15:12)

Yeah. And it's also not an environment that's always conducive with working across the other side of the aisle. I know you know that very well.

Andrew Ross Sorkin (15:18)

Less so every day, it seems. Emily, thank you. We'll talk to you later.

Kevin Hassett (15:24)

Tease will be next.

Cameron Costa (15:26)

Coming up, the Trump economy and America's future, even as tech changes our labor market. Kevin Hassett, director of the National Economic Council, joins us.

Kevin Hassett (15:37)

I think that there's a chance that job creation lags, productivity skyrockets, profits skyrocket, GDP skyrocket. But then all of a sudden, like you're making 20 widgets and you can make 20 widgets with a fewer person and then that person has to find a new job. I think that that kind of transition could happen.

Cameron Costa (15:55)

Squawk pod. We'll be right back. When you invest with Fidelity Go, it does all the work for you. So while Fidelity Go monitors the markets, rebalances your portfolio and tracks your progress to your investments aligned with your goal, you can invest your time however you want, all while paying no advisory fees. Under 25k. Invest your money, not your time, with Fidelity GO. Get started@fidelity.com go Advisory services offered by Strategic Advisors, LLC, a registered investment advisor at brokerage services provided by Fidelity Brokerage Services, llc, member NYSE and sipc.

Becky Quick (16:30)

Comcast Business helps retailers become seamlessly restocking, frictionless paying favorite shopping destinations. It's how nationwide restaurants become touchscreen ordering quick serving eaters and how hospitals become the patient scanning data, managing healthcare facilities that we all depend on. With leading networking and connectivity, advanced cybersecurity and expert partnership, Comcast business is powering the engine of modern business powering possibilities. Restrictions apply. Not every sale happens at the register.

Cameron Costa (17:01)

Before AT&T business Wireless checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses.

Becky Quick (17:10)

It's crazy what people say during an awkward silence.

Andrew Ross Sorkin (17:13)

Now transactions are done before the silence takes hold.

Becky Quick (17:16)

That means I can focus on the.

Andrew Ross Sorkin (17:17)

Task at hand and make an extra sail or two.

Becky Quick (17:20)

Sometimes I do miss the bonding time. Sometimes AT&T business Wireless connecting changes everything.

Cameron Costa (17:31)

This is Squawk POD TODAY with Becky Quick and Andrew Ross Orkin up and Andrew Q.

Becky Quick (17:38)

Good morning. Welcome back to Squawk Box right here on CNBC. We're live the NASDAQ markets at Times Square. A lot going on on this Monday morning post Super Bowl. And I know we mentioned earlier that today is the one day that more people call in sick than any other day worth noting. Next year you won't have to because the super bowl is happening on President's Weekend and so the Monday after will be a national holiday. So people will be to able to sleep in post Super Bowl. Plus they'll be able to watch the super bowl on Valentine's Day, which creates.

Andrew Ross Sorkin (18:10)

A dilemma of its own. Okay, maybe it doesn't matter if you're already married and you figure you're going to watch the super bowl and it's.

Becky Quick (18:16)

Not a big deal watching together if.

Andrew Ross Sorkin (18:18)

You are dating, that's your dilemma. Do you go out? If you're the guy, do you go out or do you decide to stay home and watch? Do you take the chance and think.

Becky Quick (18:27)

Hmm, I think you invite, I think you invite Your all your 800 closest.

Andrew Ross Sorkin (18:32)

Friends to come watch with you.

Becky Quick (18:33)

Maybe, maybe you have a romantic date just watching the game by yourself with your spouse or your partner or whatever it is. Maybe, I don't know.

Andrew Ross Sorkin (18:43)

Super Bowls are kind of for gatherings. But whatever we'll see could lead to some interesting discussions next year.

Becky Quick (18:48)

President Trump telling NBC News he's proud of the US economy and that 2026 is going to be even better. We have debt, but we also have growth. And the growth will soon make the.

Scott Gottlieb (19:00)

Debt look very small because the greatest.

Becky Quick (19:02)

Way you have two ways you can cut, cut, cut.

Scott Gottlieb (19:05)

And we do that anyway.

Kevin Hassett (19:06)

We did that, you know, we got.

Becky Quick (19:08)

Rid of hundreds of thousands of federal workers and those workers went out and.

Scott Gottlieb (19:14)

Got themselves jobs in the free enterprise system. And you know what that's called Making America Great.

Becky Quick (19:19)

Again, joining us right now is White House National Economic Council Director Kevin Hassett. Good morning to you. There's been a long sort of back and forth about the state of our economy, about how good it is, but also maybe how bad it is. And the bad part being what came before during the Biden administration and whether the President now owns this, this economy. Does the president now officially own this economy?

Kevin Hassett (19:49)

Right. I mean, yes, of course he does. The president is the leader of the free world and he's the leader of the economy. The bottom line is that there are some things that moved in the last couple of years that haven't recovered. So for example, excuse me, there's a big truck going by all of a sudden. So for example, there was 20 something percent inflation and we've got inflation way down. Incomes are up, real incomes are growing, but we haven't filled the hole from the inflation. So is it Trump's economy or Biden's economy? I think that at some point that that's, you know, you need to just like slow down and say, okay, so when we're talking about whose economy it is, that whose economies are like, whose economy is the policy being driven right now? Who's going to manage the policy going forward? Who's going to give you the State of the Union in a few weeks that says here's what's going to happen over the next few months and years. And for that, it's definitely Trump's a poverty.

Becky Quick (20:48)

Kevin, one of the things that we haven't talked about since I don't think we've seen you since Kevin Warsh was.

Kevin Hassett (20:54)

Since the last time we.

Becky Quick (20:55)

Right. So, but now, so now Kevin Warsh is going to have the job. Obviously has to get through the confirmation process. But you know, one of the arguments he's made quite publicly is actually that because of AI and the idea of productivity, that there's an opportunity to lower interest rates and that you can do that without increasing inflation. At the same time, there's now this new question about what's happening with employees employment in the country. And I'm curious how you think about squaring those two circles, if you will.

Kevin Hassett (21:25)

Right. I mean, there's absolutely no question that we're in the biggest productivity boom that we've seen since the 90s, that the introduction of the Internet and the introduction of artificial intelligence are very similar in the ways that they're affecting the data. I thought it was interesting you put up a graphic a minute ago where you showed that the biggest outperformer of The Dow was caterpillar, of all things. But that's 100% consistent with what we're seeing, which is that first of all, that Trump's tax policies are making it so that you can expense capital equipment. So there's big demand for Caterpillar stuff. But then also AI is making it so that every company from Caterpillar on up is finding that it's more productive when it does stuff. And so with higher productivity, they get higher profits. And profits is, you know, we often hear from, from another network, it's a mother's milk of stocks. And so, yeah, I absolutely believe that we're on an uptick. That's, that's significant. I think that the open question really is what's going to happen to jobs as productivity goes up? And I think that there's a chance that job creation lags, productivity skyrockets, profits skyrocket, GDP skyrocket, but then all of a sudden, like you're making 20 widgets and you can make 20 widgets with a fewer person, and then that person has to find a new job. I think that that kind of transition could happen.

Becky Quick (22:49)

When, when you think about last week in the markets, I don't know how, how focused you were on sort of the back and forth, but there really was a sort of the mood music, it seemed to, to change, if you will, for, for much of the week, there was a real concern about tech companies effectively over spending on one side, whether some of the big tech companies which had been rewarded for their spending were getting nicked, if you will. And then on the other end, there became worries about some of the other software companies and whether they were going to be cannibalized by the big guys. By the end of the week, things had shifted gears all over again. And how you're thinking about that and who you're talking to about it.

Kevin Hassett (23:28)

Yeah, I actually talked to a bunch of my friends in Silicon Valley over the week to try to understand what was going on. And the bottom line is that a software engineer at a typical West Coast Silicon Valley company has seen their productivity go up by 50, 80% over the last year because of these amazing tools that anthropic and the other countries are developing. And so what that means is that if you're, you know, a 22 year old kid who just graduated from college with a software engineering degree, that there is a machine that can probably help a senior person do your job. But in the bottom line, in the end, these big companies that were going up and down last week, their clients are people that have built relationships with them over the years that they trust. And so I think that it's going to be a long, long time until the client base moves away from the really, really big organizations like Salesforce and moves straight to chat GPT because of the relationships that these and the data that these firms have built over time.

Andrew Ross Sorkin (24:31)

Hey Kevin, want to ask you about the jobs market. We do have the jobs number coming. Finally on Wednesday after a little bit of a delay, we got some not great news. Last week when we were looking at the jobs numbers, I guess one was Challenger Grand Christmas came out with numbers that were the largest number of layoffs we've seen in any month since 2009. You had the initial jobless claims number that was a little hotter than expected. And then you also had the jolts jobs openings that dropped in December to 6.54 million. And I think the revised number for November had been like 6.93 million. I just wonder what you think is happening in the jobs market right now with all the data you see.

Kevin Hassett (25:10)

Well, I think that there are two forces that are sort of pushing down and then one force that's pushing up, the force is pushing up is the GDP growth is through the roof. Even with a revised down GDP now we're looking at 4% growth growth into the end of the year, 3% for the year as a whole, despite the fact that we had a really negative first quarter with Joe Biden. And so that's the positive effect. The negative effects are when there's a productivity boom, then maybe you can make the same amount of stuff with fewer workers. And so that might reduce labor demand. And then the other thing is that there's a pretty big decline in the labor force because illegals leaving the country. And so the break even job number is quite a bit lower than it was under Joe Biden when there were people, you know, you know, basically coming across the border willy nilly. And so I think that you should expect slightly smaller job numbers that are consistent with high GDP growth right now and that one shouldn't panic if you see a sequence of numbers that are lower than you're used to because again, population growth is going down and productivity growth is skyrocketing. It's an unusual set of circumstances.

Scott Gottlieb (26:17)

Circumstances.

Becky Quick (26:18)

Kevin, how concerned are you about a, an additional government shutdown? If we get that for things like TSA and what that could ultimately mean.

Kevin Hassett (26:27)

Economically, you know, it really feels like the government shutdown game is behind us. I know that there's a few things to be worked out at the end. But. But yeah, I don't think I've talked to anybody on either side of the aisle that is interested in having another government shutdown.

Scott Gottlieb (26:43)

So actually that's news.

Becky Quick (26:44)

That's news to us because we just had a congressman on and several, several others who still believe that there a possibility of a government shutdown. Tell us why you think what you think.

Kevin Hassett (26:54)

But people negotiate, right? And then they say, oh, for sure, I got to shut the thing down. And then they get like the museum for their grandma. That's the state that I think we're in.

Andrew Ross Sorkin (27:04)

I think that's what's in the. Are you suggesting that on the key points the Democrats have brought up where they would like to see body cams being worn by ICE agents, where they would like to make sure that they are getting judicial warrants that have been signed off instead of just administrative ones, where the Democrats are also asking that they not be allowed to wear face cover and have to show id. Are they closer on those things? Because I don't know that museums for someone's grandma would necessarily break this law.

Kevin Hassett (27:30)

Look, there are a lot of policy decisions that have to be made by congressmen and with the White House's guidance on how to best manage ice. But that's something that the White House has always been believed and I think most members of Congress believe is pushed through regular order, not by, you know, running a. Threatening a government shutdown.

Scott Gottlieb (27:50)

Okay.

Becky Quick (27:51)

Kevin, it is good to see you this morning. We appreciate you standing in the cold. I know it's bitterly cold out there.

Kevin Hassett (27:56)

You don't even have a jacket on.

Scott Gottlieb (27:57)

Remember?

Kevin Hassett (27:58)

I didn't have a jacket at Davos even.

Becky Quick (27:59)

I know. So stay warm and we look forward to talking to you again very soon.

Cameron Costa (28:05)

Telehealth company Hims and Hers is is pausing its WeGovy knockoff pill after the FDA came out against the new weight loss drug. Former commissioner of that agency, Dr. Scott Gottlieb, is next.

Scott Gottlieb (28:18)

If any company can operate under the guise of a pharmacy license, come up with completely novel formulations of drugs and market them directly to consumers, why have a drug approval process? I mean, we could have this policy debate.

Andrew Ross Sorkin (28:32)

Oh, could this vintage store be any cuter?

Cameron Costa (28:35)

Right?

Andrew Ross Sorkin (28:36)

And the best part, they accept Discover. Accept discovery in a little place like this? I don't think so, Jennifer. Oh, yeah.

Becky Quick (28:43)

Huh.

Andrew Ross Sorkin (28:43)

Discover is accepted where I like to shop. Come on, baby, get with the times.

Scott Gottlieb (28:48)

Right.

Andrew Ross Sorkin (28:49)

So we shouldn't get the parachute pants. These are making a comeback, I think.

Becky Quick (28:55)

Discover is accepted at 99 of places that take credit cards nationwide. Based on the February 2025 Nielsen report. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com MarketUpdatePodcast or find Schwab Market Update wherever you get your podcasts.

Kevin Hassett (29:31)

Before we had ATT Business Wireless coverage.

Becky Quick (29:34)

Our delivery GPS wasn't the most reliable.

Kevin Hassett (29:37)

Once our driver had to do a.

Becky Quick (29:38)

14 point turn to get back on route. A 14 point turn, an influencer even.

Kevin Hassett (29:44)

Livestream the whole thing. Not good for business. Now with AT&T business Wireless, routes are updating on the fly and deliveries are on time. And the influencer did get us 53 new followers though.

Becky Quick (29:56)

AT&T business Wireless connecting changes everything.

Cameron Costa (30:04)

You're listening to Squawk Pod. Here's Becky Quick.

Andrew Ross Sorkin (30:08)

All right, welcome back, everybody. Let's talk all things public health this morning, including the fight between novo Nordisk and hims and hers over GLP1 drugs. Joining us right now is CNBC contributor Dr. Scott Gottlieb. He is the former commissioner of the FDA and he serves on the boards of both illumina, Pfizer and UnitedHealth. He's also on the CNBC Cures Advisory board. And Scott, thank you for coming in today.

Scott Gottlieb (30:31)

Thanks a lot.

Andrew Ross Sorkin (30:32)

Break this down for us. Hims and Hers. Big splashy announcement last week that they were going to be offering this GLP1 that was basically the same as a Novo Nordisk GLP1. What happened? The FDA stepped in pretty quickly.

Scott Gottlieb (30:44)

Yeah. Well, first on what they were trying to do and then on the action that FDA seems to be taking. They claimed that they had formulated a version of this oral drug that Novo Nordisk has that is comparable in terms of delivering the same benefit but uses a different technology. So what Novo had done is they had formulated this pill, the oral, the semaglutide. The only pill, right? It's the only pill, but it's actually the peptide in an oral formulation. The problem with taking peptides orally is they get broken down into the stomach by the stomach acid. So you have to encapsulate them in some way that you get some absorption of the drug. And Novo had this special technology. They had acquired it from a company called Emisphere in I think 2020 for $1.8 billion, close to $2 billion. Right. That allowed about 2% of the drug to get absorbed. And so that technology is patented. So what Hims and hers said is that they had a different technology using a liposomal formulation. We don't know exactly what that was. That allowed the drug to also be absorbed. Now, if that's true, then this is an unapproved new drug because it's using a new technology to try to get the oral absorption. With respect to what FDA did, it was an interesting announcement in that the Department of Health and Human Services general counsel said that they made a referral to DOJ right from. From the outset. Now, typically, FDA would take its own enforcement action. They might send a warning letter. They might do an investigation, either civil or criminal. The only reason I could think of why you would make an initial referral to DOJ before you took an enforcement action is if you want to go to court. Because if FDA wants to stand in front of a judge, they need to have DOJ on their side. DOJ will litigate in court. So the reasons you might go to court would be for an injunction, a temporary restraining order.

Andrew Ross Sorkin (32:17)

We're not going to let you sell this at all.

Scott Gottlieb (32:19)

Right. We're not going to send them. Right. So if they're stepping in to effectuate a seizure, they're going to send marshals in. Now, this is all speculation, but I usually went to DOJ after I had already done an investigation. The few times that I went to DOJ at the outset was when I needed to effectuate a seizure.

Andrew Ross Sorkin (32:35)

Look, the people who are looking for reasons to slam Big Big Pharma over this will say, well, they're just trying to protect a very expensive pill. Let us have this. Your point is this could be dangerous or just downright fraudulent.

Scott Gottlieb (32:51)

Well, it could not work. First of all, it's an unapproved new drug. It's never been tested. I mean, we have a drug approval process for a reason, to ensure that drugs are safe and effective. If any company can operate under the guise of a pharmacy license, come up with completely novel formulations of drugs, and market them directly to consumers, why have a drug approval process? I mean, we could have this policy debate.

Andrew Ross Sorkin (33:11)

What's the situation with Hims and hers? They seem to play kind of fast and loose with some of these. The partnerships that have collapsed and fallen apart before. How do you read it?

Scott Gottlieb (33:19)

Yeah, look, well, my perception is that they have been aggressive in the market and regulators have been permissive to date. And so I think they continue to push the line. If you look at ROE for Example, I think Zach is operating. The CEO there is operating in a very responsible fashion. He's trying to partner with companies. He's also compounding drugs. But I think they have more compliance around what they're doing. My perception is that Hims and hers just has tried to push the line progressively and probably didn't think this would be stepping across it.

Becky Quick (33:47)

So, two questions. One is your read of what happened over the weekend between the two means that you think a deal ultimately is struck between hims and hers and Novo, that Novo just stops doing this completely, that they try to get there. I can't imagine they're not going to try to be in this market somehow. The question is how? In my mind.

Scott Gottlieb (34:04)

Yeah, well, they're in the market with, with these compounded formulations of the injectable. I don't think they're going to be able to sell this pill. I doubt any pharmaceutical company is going to cut a deal with them because they're not perceived in the industry as the sort of good actor in this space. You see the drug companies partnering with ROE because they're trying to be operating in a compliant fashion. I don't think they're going to be allowed to sell this pill. And I think that's why they probably withdrew it from the market very quickly. Because if FDA is going to doj, they're going to DOJ because they're going to take some kind of action. There's both civil and criminal penalties.

Becky Quick (34:36)

So where do you think this land? I mean, I'm imagining criminal penalties that could still come.

Scott Gottlieb (34:40)

Well, there's consumer fraud issues with respect to the ftc. But you could look at this from a. Both a civil and a criminal standpoint. I don't know if this drug was actually. It was shipped. I don't know if patients actually took it. But once patients swallowed those pills, there's other issues.

Becky Quick (34:56)

But in terms of what the deal is between these companies and ro, for example, how does that even work? What does that look like? Because there is some kind of discount already taking place.

Scott Gottlieb (35:05)

Yeah, look, I think the companies. The companies have been aggressively discounting. Right. So, you know, Lilly is going to be in a battle with Novo over the oral drug. Once Orphea Glipar and comes onto the market. I think they're looking for different channels to reach different pockets of the consumer audience. And these sort of direct to patient models and these telehealth models provide one avenue. And so they're building their own. Lilly has Lilly Direct. But if they could partner with a company Like Roe. And Roe can get in the regulatory compliance around this and do it in a fashion that's legal and compliant and satisfies lawyers at Lilly and Novo. That's just.

Becky Quick (35:37)

So what would prevent hims and hers from doing that?

Scott Gottlieb (35:40)

Well, they could have gone that route.

Becky Quick (35:41)

Right, but I'm saying they didn't so far. But you don't think that they switched sources?

Scott Gottlieb (35:46)

Yeah, I don't think they can. Well, my, my assumption is they can't pivot into that now. I don't know. You know, the companies are very worried about the corporate compliance around these functions. I think that's why companies have struggled to build their own direct to patient models. And so these, these platforms like RO have done a good job building this out. So I think someone who could step into this market and do in a compliant fashion compartment with drug companies, I don't think drug companies are going to have confidence that Hims and hers is suddenly going to become very compliant. They've tried to push the edge. I think they would probably admit that and that's my perception. So I don't know that they're going to be the go to partner here.

Andrew Ross Sorkin (36:21)

Scott, before you go, I want to talk about an op ed that you had in the Washington Post. Was it Friday that it came out?

Scott Gottlieb (36:27)

That's right, it was Sunday.

Andrew Ross Sorkin (36:28)

Okay, Sunday that it came out. On this, this is a really important op ed because you open up and talk about some health struggles that you've had over time and tie it back to what's happening with immunization policies right now. I don't want to steal your thunder. Why don't you talk a little bit about your diagnosis with lymphatic lymphoma and how that came from Epstein Barr virus.

Scott Gottlieb (36:49)

Yeah, look, the framing of this is that one of the central pillars of the sort of anti vaccine movement is that these viruses aren't that bad, that measles isn't that bad. In fact, the Children's Defense Fund, Secretary Kennedy's group, tweeted that over the weekend that we shouldn't fear measles. And my argument is that a lot of viral infections, people recover and, you know, don't have consequences. But in a lot of cases, they have long term sequelae. In my case I had Epstein Barr virus. 90% of us do. About 1/4 will develop mono. For most people, you know, it's seen as a rite of passage. Some portion of the population have long term consequences. In my case, I developed a B cell lymphoma that was ebv Positive meaning if I never had the virus, I never would have gotten that cancer. We now have a lot of literature that ebv, Epstein Barr virus can be a causative factor in multiple sclerosis. And maybe the single causative factor, it's probably a causative factor in autoimmune diseases like lupus. We now know that. So there's a lot of long term consequences of these viruses. We know HPV causes cancer. We know HSV1 probably is a causative factor in Alzheimer's disease, enteroviruses cause type 1 diabetes. And so some portion of the population that become infected with these viruses do have long term consequences. And so that's why we think about vaccinating children for them. I mean, if in the future people were working on EBV vaccines, a lot of that has pulled back now because Epstein Barr vaccine. Epstein Barr virus. Right. A lot of that has pulled back now because of the anti vax movement in this country. But if we could in the future potentially vaccinate children for that, prevent the B cell cancers like what I have, and maybe prevent multiple sclerosis and lupus, that might be a good thing. We might want that option. I think that option is being foreclosed right now because research money is coming out of these endeavors because of what's happening in this broader environment. And that's a shame.

Andrew Ross Sorkin (38:30)

Meaning that pharmaceutical companies think there's not a market here. We're going to have much too, too tough at the time getting through the regulatory bar for this and then potentially trying to convince the population to do these things.

Scott Gottlieb (38:41)

I think it's very clear now, and I think it's going to become more clear that it's very hard to get a new vaccine through the FDA because of the change in policies, you know, directed by the secretary. And then once you do, is the advisory committee to the CDC going to recommend use of that vaccine? They've shown that they're not willing to do that for a lot of the existing vaccines. And so I think a lot of the venture, certainly the venture capital, I work in the venture capital space. I'm a partner at a venture capital firm. It's very hard to get a new vaccine program funded in a venture capital syndicate. The big companies are still in this. I think they're still going to make investments. But even there, I think people are going to be much more cautious because the environment is just too difficult.

Andrew Ross Sorkin (39:18)

Dr. Gottlieb, thank you. And thank you for sharing your personal story.

Scott Gottlieb (39:21)

Thank you.

Andrew Ross Sorkin (39:22)

We appreciate it. By the way while we were speaking, Novo Nordisk announcing that it has now filed a lawsuit asking a court to permanently ban Hims and hers health from selling unapproved compounded drugs and is seeking to recover damages. Scott, very quickly, commentary on what that means.

Scott Gottlieb (39:39)

Yeah, I mean, it's not a surprise that they're moving forward. That I think will help alongside the FDA action, whatever they do.

Andrew Ross Sorkin (39:45)

Dr. Gottlieb, thank you.

Scott Gottlieb (39:47)

Thanks a lot.

Cameron Costa (39:49)

That's the podcast for today. Thank you for listening to Squawk Pod and for starting your week with us. Squawk Box is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. You can tune in weekday mornings on CNBC at 6am Eastern to catch them live. And of course, the best bits of that three hour TV show are right here on Squawk Pod. As long as you follow us wherever you're listening now, we'll meet you right back here tomorrow. Have a good day.

Kevin Hassett (40:17)

We are clear.

Becky Quick (40:18)

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Scott Gottlieb (40:40)

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Becky Quick (40:42)

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