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Quest Means Business
Voters Cast Ballots in UK General Election; Alibaba Taps New CEO, Sees Revenue Leap; US Markets Close With Gains; European Markets Mixed; Emirates Airline Net Profit Soars; Emirates Founder Maurice Flanagan Dies; Wage Fight Threatens Korean Cooperation; Hong Kong Day Traders; Russia's Putin Marks 15-Year Anniversary
Aired May 07, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:05] (NEW YORK STOCK EXCHANGE CLOSING BELL)
POPPY HARLOW, HOST: Markets on Wall Street stage a late rally as the world watches Westminster. It is Thursday, the 7th of May.
Tonight on the program, Great British Public. The Great British public decides voting in the UK. Election closes in just one hour's time.
And a marvelous day for Alibaba. Chairman Jack Ma picks a new CEO.
Also, should seriously-ill patients be treated with experimental drugs. I will speak to the ethicist hired by Johnson & Johnson.
I'm Poppy Harlow and this is QUEST MEANS BUSINESS.
Good evening, welcome to the program. Less than an hour from now, polling will close in the UK general election and counting will begin
across the UK. Millions of voters have cast their ballots, sending their representatives to Parliament from 650 different constituencies nationwide.
The party leaders have been exercising their right to vote as well. David Cameron of the Conservatives is hoping to stay on as prime minister.
He voted today. Also, his main opponent, the Labour Party leader Ed Miliband, cast his ballot in South Yorkshire. And Nicola Sturgeon, the
Scottish National Party's representative, did the same in Glasgow, Scotland.
Our senior international correspondent Nic Robertson is at a polling station in London. Nic, how is the turnout thus far?
NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Poppy, 14 hours ago, when the doors behind me opened, there was already a small group
of people waiting to go to the polling station. It's been steady all day.
It did dip around the sort of noon hours, here, sort of a slowdown. But it picked up, and we saw quite a pick-up, 6:00 PM, 7:00 PM local time
here as people came to vote after they left their offices on their way home.
So, what we've seen is steady throughout the day. The expectation here from people and sort of the way that people are looking at how they
feel it's gone so far today, is that the turnout does feel to many people to be up on previous years.
Perhaps that's been partly due to the good weather. It's been relatively sunny here in London, and relatively dry and warm across the
rest of the country, of course. And everyone knows just how important this election is, Poppy.
HARLOW: Right. And you would expect turnout to be up with the weather, with the fact that this is the most closely-fought election there
in quite some time. Let me ask you this: in terms of the results, when do you expect we'll start getting at least the first early numbers in?
ROBERTSON: There's one polling station, one constituency in the northeast of England. It typically gets its results in -- the first
result, first constituency in about 42 minutes or so after the polls close. That really is exceptional. The majority are not expected to come in until
early Friday morning here.
And the polling -- or the vote-counting, rather, could go on quite a long time. There could be several recounts. The polling station behind me
last elections had a recount. This was the closest polling in the last election in mainland UK, just 42 votes separated the two leading parties in
the election here last time.
So, really, the expectation is it's going to be later on Friday before we get a completely and more comprehensive picture. But of course, exit
polling coming very quickly after the polls close in an hour, Poppy.
HARLOW: And of course, it is now certainly very true in this election, Nic, every -- every -- vote counts. Thank you very much.
Appreciate it.
Well, CNN is the place for extensive coverage of this election. Our special programming begins just as polls close right after this program.
Christiane Amanpour, Max Foster, Hala Gorani, and of course, our Richard Quest on his Big Red Bus. It would not be an election without that image.
We will be following the developments through the night as the results come into us here only right here on CNN.
Well, shares in Alibaba are going on going on quite the magic carpet ride. The company blew away expectations in its earnings announcement
today. Also announcing they're getting a new CEO. Chairman Jack Ma now has three wishes for the company that he founded and the company that he
took public last year.
First, a management team, a new management team. Executive roles are being shuffled. COO Daniel Zhang is now being promoted to chief executive
officer. And it is out with the old and with the young. Jack Ma says he is making a deliberate effort to hand leadership roles to people born after
1970.
[16:05:00] Jack Ma is determined to get every last drop of productivity out of his current staff. He has announced a hiring freeze
for the rest of this year despite those stellar earnings.
And his third wish is to end the sale of fake goods. This is critical for the long-term success of this company because, as you know, Alibaba has
been accused of not really taking on counterfeiters that are selling their items online. That has concerned investors, regulators, it has pulled
shares down, and it has clouded the excitement over that record-setting IPO.
Let's talk about it all with Paul La Monica from CNN Money. Paul, so we could be the next CEO because they want young CEOs, right?
PAUL LA MONICA, CNN MONEY DIGITAL CORRESPONDENT: I was actually born after 1970. It's nice, yes.
HARLOW: And so was I. So, I guess we fall in the category that Jack Ma is looking at.
(CROSSTALK)
LA MONICA: Barely in my case, yes.
HARLOW: But no, on a serious note, look, you wrote this piece yesterday, a critical look at Alibaba and the fact that shares have plunged
recently. And also, then, you wrote a very optimistic piece about the company today, because we saw a 45 percent jump in sales, we saw mobile
revenue up 350 percent from a year ago. So, which is it for Alibaba?
LA MONICA: I think the good news is that the perception of Alibaba had grown so negative that beating earnings obviously was a good sign, and
investors were ready to bid the stock op. Maybe it was a tad oversold, because it went from 120 late last year all the way down to below 80.
That's a pretty steep plunge.
HARLOW: Right.
LA MONICA: Some of the things, though, that I think investors still are wondering about is the issue of counterfeit goods really solved?
Analysts, for what it's worth, don't seem as worried. In the last conference call, I looked up the transcripts, "counterfeit," that word was
used 14 times during the conference call. This conference call today, zero.
HARLOW: Wow.
LA MONICA: So, Wall Street, at least, doesn't seem to be as concerned. But I know regulators in China still are.
HARLOW: What do we know about Daniel Zhang, the COO, someone with experience at the company. Now he's going to be the CEO. Is this a guy
that can lead it in the future?
LA MONICA: It appears that way. Ma was very effusive in his praise. He's very confident. Zhang's held leadership roles at the two key parts of
Alibaba, Taobao and Tmall.
Ma said that he's also been instrumental in helping to turn Single's Day, November 11th, kind of like the Cyber Monday of China, into the
juggernaut that that really is, and Alibaba really benefits from huge amounts of online shopping on that day.
HARLOW: You wrote a fascinating piece yesterday for CNN Money titled, "Marissa Mayer's worst nightmare is becoming a reality." Talking about
just how much of Yahoo!'s valuation, and for investors that like Yahoo! right now, how much of that is pegged to Alibaba and the fact that they're
going to sell these remaining 384 million shares. What do you think this means for Yahoo!?
LA MONICA: Today, it's obviously good news, and Yahoo!'s stock went up in tandem with Alibaba. Alibaba was up about 7.5 percent, Yahoo! gained
5 percent. And Yahoo! really has been moving in lockstep for the most part with Alibaba, because Alibaba shares really are the key value in Yahoo!
right now. Yahoo!'s going to sell off that stake alter this year.
HARLOW: Right.
LA MONICA: Investors want as much cash as possible, and when the stock had fallen, that was bad news. So, with a sigh of relief,
definitely, from Marissa Mayer today. Whether or not it remains that way as the year progresses remains to be seen.
HARLOW: I think that's the really big question, because what does that do? Once all those shares of Alibaba are sold off, what do we make of
the core business of Yahoo!?
LA MONICA: Right now, investors aren't putting that much value on it. You also have Yahoo! Japan, which Mayer has said she may sell that off as
well. So what you're left with is a company that's still slow of growth, despite many of her efforts, since she's the sixth CEO in a couple of years
now.
HARLOW: Yes.
LA MONICA: Yahoo! has yet to really turn around. It's got tough competition from Facebook and Google, Twitter is starting to gain ground in
digital advertising as well. I'm struggling to find what Yahoo!'s going to do with that cash. Is this going to be like a new IBM, where they just
financially engineer their way to growth --
HARLOW: Right.
LA MONICA: -- buy back stock and what have you? That might be the future of Yahoo!
HARLOW: But you know, you know who likes IBM and who's buying more shares of IBM.
LA MONICA: Mr. Buffett, definitely. I don't think he's going to touch Yahoo! anytime soon, though.
HARLOW: Yes. All right, Paul La Monica, thank you very much.
LA MONICA: Thank you.
HARLOW: Good to have you on the program. Well, US stocks crept back up after two days of losses. Jobless claims were slightly higher, but
still below forecasts. Yelp shares, shares of Yelp, up as much as 12 percent on news that the company is looking for a buyer.
European markets were mixed today. Let's take a look there. Indexes varied amid sliding bond yields, a downturn in oil prices, and concerns
over the euro. In Athens, the stock market was up 3 percent after the Greek finance minister said a deal with creditors could come -- could come
-- in the next few days, unlocking new bailout funds. That's critical ahead of that Monday deadline.
And the head of Emirates Group is battling away suggestions that it is guilty of unfair competition. US rivals say Emirates is helped by
subsidies from the government of the United Arab Emirates, and that that just makes the playing field not level.
[16:09:59] the company says there is no truth to that. Earlier, it revealed a 40 percent increase in annual profits to $1.24 billion. The
airline says it is forging ahead with expansion into the United States and starting flights from Dubai to Orlando in September. Our John Defterios
asked the group CEO how the company managed to deliver over a 40 percent increase in profit.
(BEGIN VIDEOTAPE)
AHMED BIN SAEED AL MAKTOUM, CEO, EMIRATES GROUP: The only reason is we maintained our number of passengers, almost 80 percent, huge factor,
that was good, of course. And lower prices on the energy side has helped a bit, only by 7 percent, not that much.
But also, we have been challenged by the currency, because of the dollar base. And this was very tough for us.
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Now, you fly to ten US destinations. You're going to add Orlando. Some would suggest during this
political heat heat that's being put on by the US carriers, you should back off a little bit, not expand even further into the United States.
BIN SAEED AL MAKTOUM: I think we're not doing anything wrong. We work under the bilateral that exists today, and actually, which had been
signed in 1999, to have an open sky policy. And we always know that we are in fair competition, not like the allegations said about us, that we're
being subsidized.
DEFTERIOS: Did you get any indication from the White House that they're going to limit access for Emirates going into the United States?
BIN SAEED AL MAKTOUM: I hope not. And I think we will demonstrate to the authorities there exactly what we are doing, and the number will show
that we are getting any subsidy. I think we've been very transparent, we've been publishing our number for the last 23 years now, been audited by
an international firm.
DEFTERIOS: But the reality is, there are no labor unions here, the government owns the airport, it owns the airline. Your cost structure is
completely different. This is a fair argument for the United States, saying they don't live under that same sort of structure in terms of
landing rights in particular.
BIN SAEED AL MAKTOUM: Yes, but they also operate here. The union is not only -- we don't operate into an airport that we exist on our own.
There is 120 airlines who operate here, and everybody enjoys the same. And the published rate that we have there, it goes to everybody.
DEFTERIOS: But it took two years for this alliance to come forward with the complaints of subsidies of some $40 billion. How long will it
take for Emirates to reply and suggest and prove once and for all, as you're suggesting, there are no subsidies?
BIN SAEED AL MAKTOUM: I think when it comes to fair practice, we have to allow people the same period of time that's been given to anybody else,
if that would be the case.
DEFTERIOS: What is the political reality, though? You're almost too big of a force because of your plane orders and the ripple effect on the
economy to stand in your way. Isn't that the new reality of the 21st century?
BIN SAEED AL MAKTOUM: Of course. If you look at our order in last area, what Emirates has signed, with Boeing, for example, and how many jobs
that will be provided to the American. It's big.
DEFTERIOS: Big enough to withhold any sort of action against you?
BIN SAEED AL MAKTOUM: This is what I said. It's got to be looked at in a fair way. Not about lobbying. How can I lobby to get my side and
really make that case.
(END VIDEOTAPE)
HARLOW: Well, Emirates' earnings report comes alongside some sad news. The founding CEO of Emirates Airline, Maurice Flanagan, died at his
home in London. The current CEO said, quote, "Maurice was a man of great character and a legend in the aviation industry. He was generous with his
time, forthright in his views, and a person who gave 110 percent to everything he did."
Maurice Flanagan was part of Emirates from its launch in 1985 until he retired in 2013. He was 86 years old.
(SILENCE)
(COMMERCIAL BREAK)
[16:15:41] HARLOW: Well, a showdown over wages threatens to put an end to an experiment in cooperation between North and South Korea. In the
Kaesong Joint Industrial Complex, North Korean workers turn out goods working in a South Korean factory while it is on North Korean territory.
The wages paid to those employees of North Korea, citizens of North Korea, provide a lot of needed cash to the isolated nation. The complex
opened during a thaw in North-South tensions, and it has survived even as relations between the two Koreas turned frosty. The current dispute over
pay could shutter it for good, and our Will Ripley has his exclusive report.
(BEGIN VIDEOTAPE)
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT (voice-over): Made in Korea. Sneakers, rolling off assembly lines in a South Korean factory with
North Korean workers.
"When we started doing business here, we had 300 employees. Now we have 3,000," says manager Kang Mi-hwa. She'd like to hire 2,000 more, but
she can't. This factory and more than 100 others in the Kaesong Industrial Complex, caught in the middle of a showdown between the North and the South
just miles from their heavily-armed border.
There was so much hope at this historic summit in 2000, a landmark deal between Pyongyang and Seoul establishing two cooperative projects:
South Korean businesses on North Korean soil. One of them, the Mount Kumgang Tourist Region, closed after a North Korean security guard shot and
killed a wondering tourist in 2008.
Today, the industrial complex remains open, but planned expansion has been frozen for five years. In 2010, South Korea accused the North of
torpedoing their navy ship, the Cheonan, killing 46 sailors.
In response, South Korea stopped all new investment in Kaesong, leaving the industrial complex half empty, and businesses like the shoe
factor with no way to expand. "Because of the restrictions, we can't fill huge orders and meet high demands," she says.
RIPLEY (on camera): Every morning and every evening, 270 buses help transport 52,000 North Koreans back and forth to work.
RIPLEY (voice-over): These buses stopped for several months in 2013. Escalating tensions led North Korea to pull all the workers out. The
crisis triggered by North Korean anger over joint military exercises between South Korea and the United States.
Now, a new dispute over worker pay is threatening business again. Wages are paid directly to Pyongyang. North Korean complex managers,
including Pak Chol Su, are demanding a wage increase of $4 a month.
"We believe the attitude of the South Korean government is hurting the lives of workers here," he says. South Korea objects to a wage hike,
saying the North is going around the rules by unilaterally declaring a new minimum wage without consulting with the South.
Assembly lines keep rolling as the crisis deepens. At risk, the last remaining symbol of inter-Korean cooperation and the livelihoods of tens of
thousands of workers and their families.
Will Ripley, CNN, at the Kaesong Industrial Complex, North Korea.
(END VIDEOTAPE)
HARLOW: In Hong Kong, the stock market is certainly riding high, up more than 15 percent so far this year alone, and with money to be made,
people from all walks of life are jumping on this stock market roller coaster. Our Andrew Stevens has more.
(BEGIN VIDEOTAPE)
ANDREW STEVENS, CNN INTERNATIONAL CORRESPONDENT (voice-over): Sixty- five-year-old Mrs. Lee has been betting on Hong Kong stocks for more than 20 years. Every trading day, she comes to this brokering house in time for
the opening bell, checking her portfolio literally minute by minute.
Like many Chinese her age, she won't give us her full name, but she is happy to show us her investments.
STEVENS (on camera): Ali Health.
STEVENS (voice-over): One in particular, Ali Health, she bought for just a few cents a share. It's now trading at over $1.50. "All the ones I
have are doing really well at the moment," she tells me.
[16:19:58] After years of under-performing, Hong Kong's market is hot again. Mrs. Lee's modest portfolio has been surging.
STEVENS (on camera): It's Mrs. Lee and thousands like her, the small retail investors, who are driving this latest surge in stock prices here in
Hong Kong. But it's even more so the case across the border in China.
STEVENS (voice-over): Since the beginning of the year, Hong Kong stocks are up around 20 percent, Shanghai by more than 30 percent. Compare
that with the S&P's modest single-digit performance.
It kicked off in Shanghai. A new round of government stimulus in China late last year was the trigger. And retail money pouring into
Shanghai is also finding its way to Hong Kong via a new rule that lets mainland investors buy a limited amount of stock here.
PETER CHURCHOUSE, AUTHOR, "THE CHURCHOUSE LETTER": I think it is the start of a longer-term trend.
STEVENS: Many analysts say this could be just the beginning. Investment banker Peter Churchouse has covered the Hong Kong markets for 35
years. Momentum, he says, is building.
CHURCHOUSE: Hong Kong has been an under-performing market for the last couple of years, and suddenly, with this PIC money coming in, the
Chinese money stimulating the market, the foreigners in Europe and and America are saying, hey, we've got to get on this bandwagon as well.
STEVENS: But right now, the investment charge is being led not by the big institutional guns, the pension funds, the mutual funds, but by retail
players, including Hong Kong's small army of pensioner pundits.
Andrew Stevens, CNN, Hong Kong.
(END VIDEOTAPE)
HARLOW: Coming up next, we're going to take a look at Russia, its economy, 15 years to the day after Vladimir Putin became president.
(COMMERCIAL BREAK)
HARLOW: Fifteen years ago to the day in Russia, the world entered a new era. It was the day that Vladimir Putin was inaugurated president for
the first time. In those 15 years, he has seen boom, bust, and controversy.
When Mr. Putin took the reins, the Russian economy was experiencing 10 percent growth. In 2009, though, the global financial crisis triggered a
brutal recession. Growth did return, but this year, the economy is contracting thanks to the crisis in Ukraine, tough Western sanctions, and
sharply lower oil prices.
Michael Kofman is a scholar with the Woodrow Wilson Center for US Research and Policy Forum. He joins me now from Washington. Thank you for
being with me, sir. Appreciate it.
MICHAEL KOFMAN, SCHOLAR, WOODROW WILSON CENTER: My pleasure.
HARLOW: Let's begin with this, right? Because you have to look at this from an outside perspective, and then from the perspective of a
Russian citizen, where Putin is still sort of celebrating 85 percent approval among his own citizens. You call this rein, Putin's rein, a
"transition point for Russia." How so?
KOFMAN: Yes, absolutely. I think Vladimir Putin probably sees it that way, too, that this is not where Russia's going to end up being. But
it's essentially a transition from Soviet Russia and abandonment of the crisis-ridden period of the 1990s, where Russia did quite poorly under
Boris Yeltsin, from his perspective, and from the perspective of many Russians. Where he is taking Russia is the big question.
HARLOW: Right.
KOFMAN: Undoubtedly, he's now in a position where he needs to lead a path out of this crisis. This crisis is the worst test of his presidency,
much worse than the 2008 financial crisis. He had long struggled to articulate a vision for Russia, what Russia is going to be, besides the
fact that it is not China and it's not Europe.
[16:25:06] HARLOW: And I think what is Russia going to be when energy prices aren't where you want them to be, right? We've seen the
collapse of crude, and of course people still remember and think back to that period between 1999, 2006 where under his rein, disposable income
doubled. But how do you do that in what looks like the new energy environment?
KOFMAN: You're absolutely right. And one of the big questions right now is what will the energy environment be looking forward? Vladimir Putin
delivered year on year growth and year on year improvement, real improvement in incomes up until 2014.
In 2014, in January, over a year ago, Russia was entering a recession of its own accord, because the economy was not diversified.
Ultimately, it is an energy resource extraction economy. Now, the currency, the fate of the economy, in many ways, the fate of Russia, is
tied to the price of oil. And the wave that he rode throughout the last 15 years is now his biggest challenge.
In fact, there is very little Vladimir Putin can do this year to affect the fortune of Russia's economy. He simply has to hope for the best
when it comes to oil prices.
HARLOW: I do wonder how you think the world will remember him in terms of the economy that he leaves Russia with, right? Because he said
that his government's dealing of the ruble crisis in late 2014 was, quote, "optimal," the way they handled it.
And you think back to the United States, in 2008, 2009, the ensuing recession, how did President Obama, how did the Treasury secretary then
deal with it? And it is, frankly, they threw a whole lot of things at it, and ultimately, the economy has recovered significantly. Do you think that
Russia's dealing under Putin in the last year has been optimal?
KOFMAN: No, I think Russia's certainly learning by doing. I think Russia definitely had its sort of Lehman Brothers moment very late last
year when Russia let the currency float, it let it go. And it immediately plummeted. And Russia had been forced to spend essentially two months
tagging back and forth.
And a lot of the cause of the Russian currency crisis late last year was Russia's own mismanagement. But it was doubly difficult for them due
to the Western sanctions.
Western sanctions really bit late last year, when Russia had big trouble refinancing major corporate debt, and it was the schemes to
refinance some of their debt that led people to really speculate on their currency. Now, Russian currency has stabilized, but it is desperately tied
to the fate of oil.
HARLOW: Yes. And how do you do when the going gets tough? That is how you will be judged as a leader in the end. Thank you very much, good
to have you on the program, Michael, appreciate it.
KOFMAN: Absolutely, my pleasure.
HARLOW: Well, sometimes business is about more than making money. Coming up, why a major global drug company is turning to a professor of
ethics to try to resolve some of its toughest life or death decisions.
[16:28:07] (COMMERCIAL BREAK)
[16:30:26] HARLOW: Hello, I'm Poppy Harlow. Coming up in the next half hour of "Quest Means Business" - how does a drug company choose who
should get potentially life-saving drugs. I will speak to the ethicist who will help Johnson & Johnson decide just that.
Also, why Spanish football fans are more nervous than usual as the end of the season approaches. Before that, though, these are your top news
headlines that we are following for you this hour.
Voters have just a half an hour left to cast their ballots in Britain's general election vote. Voting has brisk at polling stations
across the country with 650 seats in Parliament up for grabs.
The party which wins an overall majority will be invited to form the next government. If no party has a majority, the U.K. faces a hung
parliament.
Saudi Arabia has proposed a five-hour ceasefire in Yemen so that humanitarian aid can be distributed. Saudi forces are leading a coalition
that is conducting an air campaign against rebels who forced out Yemen's president.
Those Houthi rebels told CNN they would meet to discuss the ceasefire proposal. The Saudi foreign minister said violence occurring anywhere in
the country could put an end to that ceasefire.
Al-Qaeda's powerful branch in Yemen says a U.S. drone strike killed one of its senior commanders. Nasr Ibn Ali al-Ansi had appeared in several
videos for al-Qaeda in the Arabian Peninsula, including one that claimed responsibility for the Charlie Hebdo terror attack in Paris.
Refugees from Burundi are crossing the country's borders into Rwanda and the Democratic Republic of Congo. The World Food Programme is
providing food to more than 24,000 refugees in Rwanda. It says more than 60 percent of them are children.
Violence is escalating in Burundi over the president's decision to seek a third term.
It is a decision that could be the difference between life and death - it has been in the past. Should people dying of untreatable illnesses be
given unapproved drugs - really experimental treatments - in the hope of saving their life?
The healthcare company Johnson & Johnson has appointed a professor of bioethics to advise it on cases of so-called compassionate use. Johnson &
Johnson said the goal is "to obtain independent advice, further ensuring that the evaluation of requests for investigational medicines prior to
their approval . . . are treated in the most fair and ethical manner."
Experimental medicines can only be given out if a company gives consent because they're not approved yet by the FDA. There are tough
decisions like which patients should get help and which patients shouldn't get help.
On social media there are growing numbers of campaigns for new drugs to be put in use. There was a drug called Chimerix offering this seven-
year-old boy an unproven anti-viral treatment after heavy media coverage last year and had declined previous requests. And the boy, by the way, who
got it recovered.
The maker of an experimental treatment for Ebola exhausted its supply of ZMapp during that epidemic. Dr. Arthur Kaplan from New York University
School of Medicine is the professor who will lead this independent committee advising Johnson & Johnson. He joins me in the studio now.
Thank you for being here.
DR. ARTHUR CAPLAN, NEW YORK UNIVERSITY SCHOOL OF MEDICINE: Thanks for having me, Poppy.
HARLOW: It's fascinating and you would think I'm surprised that this hasn't been the case before. But what drug companies like Johnson &
Johnson have run up against is a vocal cry from parents and supporters of, say, a child for example in the past who's needed a drug they believe will
save the child and the company has to make the decision of -
CAPLAN: Right.
HARLOW: -- do we give them an unproven drug or not. Why have you been brought on by Johnson & Johnson, and ultimately what's your goal when
making these very tough decisions?
CAPLAN: Well we've been complaining. I've been writing and say, look, squeaky wheels - I understand why parents would do everything and
anything they could to get their kid a drug or get themselves a drug if they had an illness.
But it's not a fair system because some people don't do that. Let's face it, the fifth story online, the tenth story online - people don't pay
attention anymore, so you kind of don't get heard. Johnson & Johnson
We have to give a balance and fair opportunity to everybody. By having a committee formed and we tell Johnson & Johnson take all the
requests and anonymize them - we don't want to know who they are. We're just going to put them in front of us, listen to their medical facts, see
whether they're young or old, whether they are near death or not.
HARLOW: You'll know when they're a child.
[16:35:02] CAPLAN: We'll know if they're a child and we'll know if they're close to death or not so close to death. We'll even know something
about whether the drug is likely to help somebody with, say, five diseases as opposed to one. But you won't be saying call the governor and see if he
can help.
HARLOW: Two important things for our viewers to know. One, you're not taking any money from Johnson & Johnson.
CAPLAN: I don't know - the panel members may but I'm not going to take any kind of compensation or money.
HARLOW: They may? It seems like they shouldn't - like a conflict of interest.
CAPLAN: Well, they are going to get paid by NYU.
HARLOW: OK.
CAPLAN: In other words, I said let's put the money here and then Johnson & Johnson go away. It's going to be independent -
HARLOW: But isn't it Johnson & Johnson's money?
CAPLAN: It is -
HARLOW: OK.
CAPLAN: -- but I'll put it this way - I don't have a firewall but I've got a fence, so I control what happens with the committee, I work out
the payment with them and then I don't take anything or any compensation because I want to be completely independent.
HARLOW: When I think of panel, I think of advising, right? I don't think of deciding.
CAPLAN: Yes. Yes.
HARLOW: Are you guys making the ultimate call on what patients get these experimental drugs and which don't or is Johnson & Johnson making
that final call?
CAPLAN: By law Johnson & Johnson has to. They are the ones who - we can't step in and say you must give a drug to anybody. They have the right
to say no. But if they say no, they have to give us a written explanation, a written justification. They can't just say thanks.
HARLOW: Here's the thing that critics want and I don't believe it's happening yet. They say this is a convenient way, another way for the
company to say no. Because as I understand it, it's not going to be publically disclosed what their reasoning is. Is that right?
CAPLAN: Well I think eventually we're going to start to say here's the rules we followed or maybe we say, you know, it's just random - we're
going to take everybody and then take first come, first served because we can't make these choices. I think we can do better. The company just gets
its own narrow perspective. It's a company - they are businessmen. I formed the committee with doctors, ethicists, --
HARLOW: Yes.
CAPLAN: -- consumer advocates, whatever else. I think we'll get a better perspective on this.
HARLOW: Here's the flipside that I think maybe isn't getting enough attention, and that is the fact that there are a lot of challenges to this,
right? There are challenges of short supply. ZMapp ran out -
CAPLAN: Absolutely.
HARLOW: And there are challenges of when you're doing testing or a study, for example, on a drug - there's often a limited supply. And if you
take some out of that pipeline, you slow down the entire study and the FDA approval process for everyone else. You have to walk that line for the
greater good.
CAPLAN: Exactly. So with going with J&J and we're going to say if somebody could fit a trial, we're going to put them in the trial. But
there are a lot of folks who can't -- they're dying too fast, they don't - they're too sick, whatever - we're going to take those on.
We hope that this model might be useful for those Ebola epidemics. Remember when the flu vaccine was in short supply a couple of years ago?
We didn't have it.
HARLOW: Yes.
CAPLAN: Maybe something like this is the way to go. Yelling and the squeaky wheel approach - I don't think that's fair, letting some corporate
person behind closed doors do something -
HARLOW: Or someone with great connections.
CAPLAN: -- great connections. We'll try to be as transparent as we can, we'll try to be as public as we can. Eventually, you know, I think
people can criticize us and say, `You didn't make the right decision.' OK. Well listen.
HARLOW: Every case treated equal under your eyes - that's the goal.
CAPLAN: That's the goal.
HARLOW: Thank you so much, Art. It's really fascinating and we'll see if other big pharma companies adopt this as well -- Johnson & Johnson
taking the lead here. Thank so much, sir.
CAPLAN: Thank you.
HARLOW: I appreciate it. Well the CEO of a leading gold producer says his competitors need to learn some discipline as the price of gold
falls. Mark Bristow tells me it is being driven down by the industry itself.
(COMMERCIAL BREAK)
[16:40:31] HARLOW: The CEO of Randgold. The CEO of Randgold says that the mining industry needs to frankly learn some discipline when it
comes to supplying the market with gold.
Today the company revealed mining profits for the latest quarter. They were down nearly 16 percent from a year ago and the falling price of
gold cut into those profits although they say they are still making money with gold just around $1,200 an ounce. That is down though from nearly
$1,300 a year ago and even higher before that.
I asked CEO Mark Bristow if this is really the new normal for prices in the gold market.
(BEGIN VIDEOCLIP)
MARK BRISTOW, CEO, RANDGOLD RESOURCES: -- Yes, Poppy and driven by the industry itself I believe. You know, the demand side of the business
is very robust and it's really kept the gold price at the higher end of that range.
But what the industry's been doing is oversupplying the market and not only oversupplying it but doing so at a loss. And that is the big issue.
It's the issue I've been raising for a number of years now and that is - you know - we really need to discipline ourselves as an industry and stop
producing so much gold and not making any money out of it.
HARLOW: But Mark, this begs the question who's going to do it first? Do you lead the way by Randgold cutting production? Do you wait for your
competitors to do it? Who does it first?
BRISTOW: Well, I think the fundamental difference, Poppy, as you saw in our results today - we make profits at these gold prices because we
allocate capital at 1,000. So, you know, and what we're interested in is that other people exercise that same sort of discipline.
HARLOW: With all of the volatility we've been seeing, Mark, in the bond market, I wonder if you think that that is going to drive gold prices
higher in a - in any significant way?
BRISTOW: Yes, I think - you know - I think that everything's searching for -- you know - the trend at the moment and the global economy
isn't indicating any clear trend. You know, everything's in the - in a little bit of a muddle.
You know, Europe's in a muddle, China has, you know, slowed down materially. The U.S., you know, will never grow at, you know, higher
single digit numbers, but it's - and it can't survive on its own. So, you know, we've got a lot of - and the stock markets are, you know, definitely,
you know, toppy.
So, you know, you've got a whole lot of concerned people and people are searching for -
HARLOW: Yes.
BRISTOW: -- places to put their money in. And I think the big question here, Poppy, is are we going into a period where there's not a lot
of opportunities to create value and people are looking more to preserve their wealth and, you know, try and see how things work out.
(END VIDEOCLIP)
HARLOW: Mark Bristow there. Well moving now from gold bars to black gold, crude oil prices are down about 3 percent this session after staging
quite a substantial rally earlier this week.
T. Boone Pickens is a titan of the U.S. energy industry. He's certainly bullish on oil prices and he says those prices are poised to make
a major comeback by the end of this year.
CNNMoney's Cristina Alesci joins me now. You've sat down with T. Boone Pickens, not one to mince any words. What is he saying?
CRISTINA ALESCI, CNNMONEY CORRESPONDENT: No, and it's not surprising that he's going to be bullish on oil. He's always bullish on oil pretty
much. And he said the rig count is coming down because producers don't find it economically viable to produce here in the U.S. anymore, and that's
what's making him so bullish.
He says that oil -
HARLOW: They're just tapping the wells.
ALESCI: Exactly. So they're saying that he's saying that oil can get to $70 by the end of the year and $100 - up to $100 in the next 12 to 18
months. Take a listen.
(BEGIN VIDEOCLIP)
T. BOONE PICKENS, BP CAPITAL FOUNDER: -- value will be to $70 by the end of this year.
ALESCI: What's driving that prediction?
PICKENS: Well -
ALESCI: Everyone else seems to be on the other end of that trade - on the other side of that trade.
PICKENS: Because I know more about it than they do. It's that simple. But you had 1,600 rigs drilling for oil in the United States.
Today you have 700. They're not watching the rig count, so --
[16:45:02] ALESCI: Everybody's watching the rig count.
PICKENS: OK. If - when you shut those rigs down, you're dealing with producing formations that are tight, they've been fracked heavily and
decline curves are steep. So you're going to - for instance - the Bakken, North Dakota, it has already turned over. It is in decline because of a
shutdown of the rigs.
And same in the Eagle Ford South Texas same thing. West Texas will go the same way. If the price goes down, the gasoline gets cheaper and the
consumer's happy and the politician pounds on his chest and takes credit for it when he doesn't even know what he's talking about.
ALESCI: Who doesn't know what he's talking about?
PICKENS: The politician.
ALESCI: You have one or two in mind. I can see -
PICKENS: The whole crowd of them.
ALESCI: -- I can see this in your eyes.
PICKENS: They don't understand energy.
ALESCI: What don't they understand?
PICKENS: They don't understand supply and demand. Now they're struggling with whether we should export oil. Sure, go ahead and export
oil - that's fine. The producer in the United States should be allowed to go into any market he wants to, to sell his oil. That's it.
ALESCI: What's holding it back?
PICKENS: The government here - they'll have to do something in Congress to allow export of oil.
(END VIDEOCLIP)
ALESCI: Now, Poppy, you mentioned in your intro that oil has pulled back a little bit -
HARLOW: Yes.
ALESCI: -- today, but for the most part this year, T. Boone's been basically right.
HARLOW: Yes, it's been going up.
ALESCI: Yesterday it settled at $61 a barrel, its highest level since December and that's because the government came out with some estimates
that said crude oil inventories fell for the first time in 17 weeks. So there you have. Now fundamentals are supporting his argument.
HARLOW: Right. I think that's where you're seeing the wells that are capped. I saw it firsthand and North Dakota is now sort of playing into
the system and paying off for both like chem (ph) and oil. Well JPMorgan came out just know that they got a lot of attention saying they think that
Texas could fall or will fall into a recession because it is so reliant on oil prices. Does he agree?
ALESCI: He doesn't agree. Obviously he's from Texas and - he's actually not from Texas but he has a large interest there shall we say --
and he think that, look, the economy there is diversified, there's been a lot more investment in healthcare and in finance. He even joked that, you
know, if goes wrong for him he can drive a truck. And truck drivers are in demand.
HARLOW: There you go.
ALESCI: Yes, and --
HARLOW: And they're making good money when they're working on oil fields, it's true.
ALESCI: Exactly.
HARLOW: (Inaudible), Cristina, thank you very much. You can see all of it on CNNMoney.com. Well coming up next, a legal fight to keep players
on the field. Spain's football league goes to court to stop a nationwide shutout. Up next.
(COMMERCIAL BREAK)
HARLOW: Spain's top football league has launched legal action to try and stop the country's football federation from suspending all of their
matches. All games in Spain are due to be halted indefinitely after May the 16th over a dispute over money from television rights.
CNN World Sports anchor Don Riddell joins me know from the CNN Center. Say it ain't so. It's not happening.
DON RIDDELL, CNN "WORLD SPORT": Well I hope it doesn't happen and it's hard to believe that it actually will go ahead. But that's what
they're saying at the moment. Essentially this is a power struggle between La Liga, the Spanish Football Federation and also the players union in
Spain - who are also in favor of a strike by the way.
[16:50:05] You know, something has to change in Spain. It's great for Barcelona and Real Madrid. When "Forbes" published their list of the
richest football teams in the world yesterday, Barca and Real were the top two, but beyond that, nothing. The rest of the teams in the league are
really getting next to nothing in terms of financial reward right now. And everybody agrees that something has to change. What they can't agree on is
how they're going to change it.
HARLOW: Well and so this begs the question of the overall economic health of the league across Spain. Where does that stand?
RIDDELL: Well, it's hard to say because the top two teams make so much money -
HARLOW: Right.
RIDDELL: That it really isn't fair. For example, if you compare it to the Premier League, when this "Forbes" list came out yesterday, eight of
the top 20 are from the Premier League. And some of those teams - with all due respect to them like West Ham - aren't what you would consider world-
class teams.
But there they are in the top 20 because they've got massive television deals and it's split out evenly between the teams. That doesn't
happen in Spain.
And the general consensus is that they should be a bit more equitable. That would improve the overall quality of the league and it would make all
of those teams more competitive.
So, as I say, most people agree that something needs to change. But there's this power struggle going on between how they actually carve up the
pie -
HARLOW: Yes.
RIDDELL: -- and the Spanish Football Federation has thrown a spanner into the works because they feel as though they're not getting a big enough
slice. La Liga is going to hold an emergency meeting on Monday to try and get out of this and hopefully they can find a solution.
HARLOW: Yes, we're running up against that May the 16th deadline. Don Riddell, thank you so much. I appreciate it. And that is "Quest Means
Business" for this evening. Thank you so much for being with me. I'm Poppy Harlow in today for Richard Quest. As you can see from the clock on
your screen, the polls in the U.K. are about to close.
Our special coverage of Britain's election night begins right after the break. This is CNN.
(END QUEST SHOW)
HALA GORANI, CNN ANCHOR: Hello everyone, it is 9:55 p.m. across the United Kingdom. That means that in just under five minutes, the polls will
close in this country. And that also means the counting will begin and we will discover how the British public has voted.
Good evening everyone and welcome to CNN's special coverage of the U.K.'s election 2015 just across the river from the Houses of Parliament.
I'm Hala Gorani.
MAX FOSTER, CNN ANCHOR AND LONDON CORRESPONDENT: I'm Max Foster here with you throughout the night as the results flood in. It has been one of
the most unpredictable elections for decades and over the course of the coming hours, CNN's team will bring you every twist, every turn as the
votes are counted.
CHRISTIANE AMANPOUR, CNN ANCHOR AND CHIEF INTERNATIONAL CORRESPONDENT: And I'm Christiane Amanpour here at Westminster, and over the course of
this evening, I'll be joined by a vast array of experts an newsmakers who'll dissect the results minute by minute and look at how Britain's
political landscape is shifting.
RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: And I'm Richard Quest onboard the hashtag
#bigredbus. Welcome, we've got the election band this evening, we're going to be visiting the parties around the British capital and we'll be bringing
you the flavor as the people of Britain realize who and what they've elected in Election 2015.
And, yes, that's me over there - I can see you. (Inaudible). Good evening!
FOSTER: He's right - (LAUGHTER) - he is right there. It's not a joke.
GORANI: No lie.
FOSTER: Incredible. This race will not be decided just in London alone.
PHIL BLACK, CNN CORRESPONDENT: That's right, Max, I'm Phil Black in Edinburgh. The Scottish National Party has been fighting hard to win each
of the country's 59 seats.
In just a few moments, we'll start to count the votes and we'll soon discover if the SNP is on course to overtake the Liberal Democrats and
become the third biggest political party in the United Kingdom. Remember, what happens here is crucial and it could all help determine the final
outcome.
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: And here in Southeast England, the leader of the U.K. Independence Party is trying
to win a seat in Parliament for the first time. I'm Fred Pleitgen reporting live from the town of Margate where we'll find out if Nigel
Farage has done enough to make UKIP a force to be reckoned with.
GORANI: Well we are three minutes away from polls closing and every second of the night you will be able to see at a glance us explaining to
you what appears on your screen. You'll be able to see at a glance where the parties stand with our special seat counter at the bottom of the
screen.
Right now they're all at zero, naturally, because no results have come in. But as the results appear, you will be able to see quickly which
parties are doing well - the Conservatives, Labour, the SNP - and which parties have been left trailing behind. Nina.
Nina.
NINA DOS SANTOS, CNN ANCHOR AND CORRESPONDENT: Thanks so much, Hala. I'm Nina dos Santos here at the CNN Election Center. This is how the U.K.
looked after the last general election in 2010 - blue for Conservatives, red for Labour.
Once the votes are cast and the results start to come in, I'll be using our interactive map here to gauge has those colors change throughout
the course of the night. Now remember that the magic number is 326 seats in Parliament. If any of the parties manages to gain that, they'll have a
majority and will be able to form the next government.
FOSTER: While the leaders of the chief political parties cast their votes earlier today, here's Conservative Prime Minister David Cameron with
his wife and his constituency of Witney - it's just miles from the miles from the University city of Oxford.
His main challenger for the top job is Ed Miliband who's hoping to retain the Northern English seat of Doncaster North. It was there where
the Labour Party leader voted just this morning.
GORANI: Well, there's not long now until the polls close and the last ballots are cast. You can see it on our counter there - one minute, four
seconds, three seconds, two seconds. Nic Robertson is outside a polling booth in North London. Moments left for people to vote - seconds we should
say. Nic.
NIC ROBERTSON, SENIOR INTERNATIONAL CORRESPONDENT: Seconds and you know what, Hala, I just some somebody go in through the door. We've been
here for 15 hours since the polls opened at 7 a.m. local time this morning.
There was a handful of people waiting to go in. It's been a steady flow throughout the day. And the perception - the perception here is that
turnout was higher than at the last elections. A steady stream of people. Those doors - they're getting ready to close them. Hala.
GORANI: All right, Nic Robertson. Twenty-seven seconds away. As Nic was saying, we are just seconds away from the polls closing. At that point
we begin our first sense of how the U.K. has voted.
FOSTER: And we're going to get the first seats coming in within the first hour. And this is truly a historic election - some people saying we
could be voting for the last prime minister of Britain because of this whole separatist movement that's playing in in Scotland here. And also - I
mean, we're just not used in this place to have minority governments or smaller governments.
END
