Puerto Rico pays bills, avoids default
Puerto Rico said it made all principal and interest payments due Tuesday, averting a default on directly guaranteed bonds and allowing the commonwealth to continue talks with creditors to reduce its $70 billion debt burden. Governor Alejandro Garcia Padilla signed an executive order to permit the redirection of revenue budgeted for highway and convention center bonds and other agencies to pay for debt issued or guaranteed by the commonwealth. The GDB, which lends to the commonwealth and its agencies, had $354 million in principal and interest payments due Tuesday. Of the $354 million due, $267 million of the bonds are guaranteed by Puerto Rico. A missed payment on those securities would have been the first default on the commonwealth's direct debt.
Construction spending rises in October
U.S. construction spending jumped in October, fueled by solid gains in homebuilding and the largest increase in federal construction in nine years. The Commerce Department said Tuesday that construction spending rose 1 percent in October from the previous month to a seasonally adjusted annual rate of more than $1.1 trillion. That's the highest level since December 2007 when the Great Recession began. More Americans are buying new homes or renting apartments, driving greater residential development. And federal, state and local governments, spurred partly by greater tax revenue, are building more roads and schools. Construction spending has increased 13 percent in the past 12 months. The construction of single-family homes and apartments climbed 1 percent in October, also reaching their highest level since December 2007. Manufacturers boosted their construction spending by 3 percent. And federal government building soared 19.2 percent, the biggest increase since October 2006.
Report is critical of drugmaker Gilead
The maker of a breakthrough hepatitis drug put profits before patients in pricing the $1,000 pill that's become a symbol of the excessive cost of medications, Senate investigators said Tuesday. A bipartisan report from the Senate Finance Committee concluded that Calif.-based Gilead Sciences Inc. was focused on maximizing revenue for its hepatitis C medications, even as the company's own analysis showed a lower price would allow more patients to be treated. The lawmakers who led the investigation said it's a warning about what could happen with other innovative treatments for cancer, diabetes, Alzheimer's and HIV. In a statement, Gilead said it disagreed with the report's conclusions. Gilead stock was down slightly most of the day Tuesday, as broader financial markets posted solid gains.
Low-cost alternative to Turing drug offered
The nation's biggest pharmacy benefits manager is muscling back into the debate over soaring drug costs by promoting a less-expensive alternative to a lifesaving medicine with a list price of $750 per pill. Express Scripts Holding Co. said Tuesday that it will make a treatment for the rare infection toxoplasmosis that costs $1 per pill available on its biggest formulary, or list of covered drugs. Daraprim, the drug that costs $750 per pill, comes from Turing Pharmaceuticals, which stirred outrage among doctors, patients and politicians when it bought rights to the pill earlier this year and then jacked up the price. The 62-year-old drug had been priced at $13.50 per pill before that. The Express Scripts decision means that a cheaper alternative to Daraprim created by Imprimis Pharmaceuticals will now be available to about 25 million customers through its formulary.