The New York Times - 12.09.2019

B4 N THE NEW YORK TIMES BUSINESSTHURSDAY, SEPTEMBER 12, 2019

COMPANIES | MARKETS

LONDON — A quarter of all adults

in Britain take prescription medi-

cation for pain, anxiety, depres-

sion or insomnia, and half of those

people had been taking the drugs

for a year or more, according to a

government report released this

week.

The report, based on an analy-

sis of prescription data in 2017 and

2018, is the first snapshot of pre-

scription drug use in Britain.

Though the numbers did not sug-

gest the same degree of opioid

abuse as in the United States, pub-

lic health officials said the report

underscored the need to find al-

ternatives to prescribing medica-

tions.

“I’m incredibly concerned by

this new evidence” of drug use

among Britons, said the health

secretary, Matt Hancock. “I refuse

to let this escalate to the level seen

in the United States. This review

is a wake-up call.”

The study, by Public Health

England, included prescriptions

of five categories of drugs: opioid

pain killers; antidepressants;

benzodiazepines, a type of anxiety

medication; a range of sleeping

aids known as z-drugs; and

gabapentinoids, which are used

for neuropathic pain. The study

analyzed prescription data and

commissioned an assessment of

associated harms, dependence

and withdrawal.

It found that antidepressants

accounted for the highest number

of prescriptions, taken by 7.3 mil-

lion people. Opioid painkillers

were second, taken by 5.6 million

people, although opioid prescrip-

tions started declining in 2016.

Britain has a population of just

over 66 million, the government

has estimated.

Prescription rates were higher

among women, and higher in

poorer parts of the country.

Half of the adults using the

drugs have been on prescriptions

for more than a year, and many for

more than three years, a figure

that came as a surprise to Public

Health England’s medical direc-

tor, Paul Cosford.

“These are often prescriptions

for which there are alternatives,

but for whatever reason those al-

ternatives are not easily available

or difficult to access,” he said. He

said referring patients to commu-

nity organizations and activities, a

practice known as “social pre-

scribing,” could be a viable solu-

tion to medications.

That approach worked for Ara-

bella Tresilian, who struggled for

20 years to wean herself off anti-

depressant medication.

“It has such an impact that you

think you can’t get on with normal

life, so it makes you want to go

back on them,” Ms. Tresilian, 44,

said.

After approaching her doctor

for an alternative treatment, she

was put in contact with a network

that connected her to community

groups and financial and career

support; joined a choir to avoid

her mental health triggers; and

succeeded in quitting the anti-

depressants.

However, providing a range of

alternative treatments beyond

drugs may involve a shift in out-

look for the country’s vast ranks of

general practitioners.

“Historically, we’re trained to

make people feel better. G.P.s

don’t like to say ‘no’ to people,”

said Simone Yule, a clinician at

Blackmore Vale Partnership and

clinical lead at Action on Addic-

tion, a British charity.

“We need to ensure continued

resources to offer holistic alterna-

tives to a pill, and the right sup-

port for G.P.s to have those con-

versations with patients and fa-

cilitate reducing the longevity of

chronic prescriptions,” she said.

Though health officials ex-

pressed concern over the coun-

try’s use of opioids, the compara-

tive degree of the problem is less

than in the United States. In Eng-

land and Wales, just over 2,200

people died of opioid abuse in

2018; in the United States, with

just over five times the popula-

tion, 47,600 deaths were attribut-

ed to opioid abuse the same year.

Citing the crisis with opioids in

the United States, Dr. Cosford

said, “We’re not at that stage,” but

he added, “We mustn’t be compla-

cent about whether we’ve got the

seeds of that problem.”

With Study,

British Eye

Rethinking

Drug Use

Findings prompt a call for

trying alternatives to

prescription medication.

By GENEVA ABDUL

Stock exchanges have been

transformed as a result. In the

United States, both the New York

Stock Exchange and the Nasdaq

Stock Market are now part of

broader, more global companies.

The London Stock Exchange

Group in particular has been the

object of desire for other ex-

changes: Deutsche Börse and the

Toronto Stock Exchange have

both tried and failed at takeovers

in the past decade.

Trying to bolster its standing as

an independent company, the

London exchange last month

agreed to buy the data provider

Refinitiv for $27 billion. That

pending deal makes the Hong

Kong bid even more of a long shot

because it would make the Lon-

don Stock Exchange bigger than

its Asian rival.

The Hong Kong company’s

takeover interest caught the man-

agement of the London Stock Ex-

change by surprise.

Executives at the two ex-

changes met on Monday in what

British executives figured would

be a casual discussion about the

state of their industry, according

to people with knowledge of the

matter.

Instead, the Hong Kong officials

declared that they wanted to buy

the London exchange for nearly

$37 billion.

Less than 48 hours later, the

Hong Kong company made its of-

fer public, hoping to cause a swell

of support for the deal from the

London Stock Exchange’s share-

holders.

Under the terms of the offer, the

Hong Kong company would pay

use equipment from Huawei, the

Chinese maker of telecom gear.

But the Hong Kong protests have

brought questions of Chinese in-

fluence to the fore.

The Chinese government is the

largest shareholder of the Hong

Kong exchange, with the right to

name six of its 13 board members,

and Beijing’s responses to the

antigovernment demonstrations

in Hong Kong are likely to lead

British officials to closely scruti-

nize the deal for any signs of Chi-

nese government influence. Brit-

ain’s business minister, Andrea

Leadsom, said in a Bloomberg

Television interview on Wednes-

day that regulators would “look

very carefully at anything that

had security implications for the

U.K .”

Previous foreign takeovers of

British companies have been de-

railed or delayed on similar

grounds, such as a proposed take-

over last year of Northern Aero-

space by a Chinese rival. The

British government announced

plans last year to significantly

toughen its scrutiny of foreign

takeovers, with a particular eye

on those coming from China.

Hong Kong’s proposed take-

over is the latest piece of a decade-

long rush toward consolidation of

stock exchanges around the

world, as they try to fend off both

upstart competitors and new tech-

nology that threatens traditional

market exchanges with obsoles-

cence.

Both the Hong Kong and the

London exchanges have sought

merger partners. They and others

are crossing borders to better ap-

peal to companies that no longer

necessarily see one country as

their home. American executives,

for example, regularly travel to

Asia to try to persuade fast-grow-

ing private companies to list their

shares in the United States, rather

than in Hong Kong or Tokyo.

LONDON — Stock exchanges are
potent national symbols of capi-
talistic clout, and a surprise offer
on Wednesday by Hong Kong’s
exchange to acquire its London
competitor is likely to set off a
transcontinental tug of war.
If it came to fruition, the Hong
Kong Stock Exchange’s unsolicit-
ed $36.6 billion bid for the London
Stock Exchange would create a
market juggernaut, pairing the
pre-eminent exchanges in Europe
and Asia and creating an embold-
ened rival to challenge the leading
United States exchanges.
Hong Kong officials said on
Wednesday that fusing the two ex-
changes would allow companies
and investors to profit from a com-
mon platform for trading stocks
and bonds that would be open 18
hours a day.
But the proposed deal comes at
a time of wrenching economic, po-
litical and social turmoil in Britain
and Hong Kong that is jeopardiz-
ing their standings as regional fi-
nancial hubs.
In Hong Kong, China’s efforts to
assert control over the semiauton-
omous territory have provoked
weeks of angry protests. And in
Britain, the government is in tur-
moil over plans to exit the Euro-
pean Union in a way that could de-
flate the economy.
The Hong Kong offer would re-
quire Britain to cede a corporate
crown jewel — one whose roots
trace back to 1571 — at a time
when London’s centuries-long
status as a leading financial capi-
tal is already in doubt because of
Brexit.
Britain has been more open to
investment from China and Hong
Kong than other Western coun-
tries have. Li Ka-shing, the Hong
Kong tycoon, has invested in
British infrastructure for years,
and London has been slow to bend
to Washington’s pressure not to

cash and stock worth about 8,361

pence per share as of Sept. 10’s

stock prices, a 23 percent pre-

mium to where the London ex-

change’s company had been trad-

ing.

British takeover rules now say

that the Hong Kong exchange has

28 days to either make a firm ac-

quisition offer for the London

Stock Exchange or walk away.

For now, it is unclear what will

happen. Shares in the London

Stock Exchange Group rose 6.6

percent on Wednesday, to 7,254

pence. That remains below the

Hong Kong exchange’s offer, sug-

gesting skepticism from the Lon-

don company’s shareholders that

a deal will come to pass.

The London exchange said in a

statement that it would consider

the unsolicited offer from its Hong

Kong counterpart but remained

committed to completing its $27

billion deal to buy Refinitiv. That

transaction would thrust the Lon-

don exchange deeper into the

business of selling and managing

market data, a business that has

grown in prominence and profit-

ability for exchanges.

But proponents of the Hong

Kong offer are likely to argue that

becoming part of a European-

Asian giant is a surer business bet

than buying Refinitiv, which has

long lagged Bloomberg L.P. in the

market data industry.

Charles Li, the chief executive

of the Hong Kong exchange’s par-

ent company, said on a conference

call with the news media on

Wednesday that the Refinitiv

transaction helped push his com-

pany to hastily move forward with

a bid. “We know we were late,” he

said. “We don’t want to be late

again.”

The offer comes at a politically

turbulent time for both ex-

changes’ home bases. The British

government remains paralyzed

by questions about how the coun-

try should leave the European Un-

ion, while the business communi-

ty remains in the dark about what

Brexit would mean for London’s

place on the business world stage.

At the same time, Hong Kong

has been torn by mass demonstra-

tions over what protesters see as a

more assertive hand by Beijing in

what is meant to be a semiautono-

mous region of China, operating

under its own laws, which interna-

tional businesses and investors

find attractive compared with

conditions on the mainland.

On Wednesday, Mr. Li rejected

the idea that the Hong Kong ex-

change would want to loosen its

ties to the mainland. He noted

London’s ambition to become a

global center for trading in the

renminbi, the Chinese currency,

and said the Hong Kong exchange

could help fulfill that. Beijing

heavily restricts the currency

from crossing its borders, but

some Chinese officials have

openly discussed a day when the

world might use the renminbi as

commonly as it uses the American

dollar, which would give China

greater say in the global financial

system. If London became a hub

for renminbi use, more Chinese

companies and investors would

consider the city an even more at-

tractive place to do business.

Mr. Li dismissed concerns

about a China-owned company

buying a British icon. He noted

that Hong Kong Exchanges and

Clearing has owned the London

Metal Exchange for seven years,

investing in the British platform

and keeping it free from Chinese

management.

“We are not a Chinese company,

and we are not even a simple

Hong Kong company,” Mr. Li said.

“We are a global company.”

Carlos Tejada contributed reporting

from Hong Kong, and Alexandra

Stevenson from Beijing.

Bid for Power Couple: Hong Kong-London Exchange

A takeover would

create a stock market

juggernaut.

By MICHAEL J. de la MERCED

director of equity research at
Wedbush who tracks the ride-hail-
ing industry. “The worry is that
the wildfire spreads.”
In California, religious groups
said they feared that small
churches and synagogues would
not be able to afford making pas-
tors and rabbis employees. Wine-
makers and franchise owners said
they were worried they could be
ensnared by the law, too. Even
some of the contractors for the
app-based businesses that have
been at the center of this debate
said the change could hurt them if
companies like Uber, Lyft and Do-
orDash decided to restrict how of-
ten they could work or cut them
off entirely.
Under the bill, workers are
likely to be employees if the com-
pany directs their tasks and the
work is part of the company’s
main business.
California has at least one mil-
lion workers who work as contrac-
tors and are likely to be affected
by the measure, including nail sa-
lon workers, janitors and con-
struction workers. Unlike con-
tractors, employees are covered
by minimum-wage and overtime
laws. Businesses must also con-
tribute to unemployment insur-
ance and workers’ compensation
funds on their employees’ behalf.
For months, lawmakers have
jockeyed to exempt a variety of
job categories, including doctors,
insurance agents and real estate
agents.
Carrying out the mandate will
most likely be anything but or-
derly. Companies in dozens of in-
dustries must decide whether or
not to comply pre-emptively or
risk being sued by workers and
state officials. Some workers may
find that their schedules and job
descriptions change, while others
may be out of a job altogether if
their employers cut back hiring
amid rising costs.
Mr. Newsom has said he in-
tends to sign the bill but has indi-
cated that he would be open to ne-
gotiating changes or exemptions
with businesses like Uber and
Lyft if they were willing to make
other concessions. That has add-
ed to the air of uncertainty.
Litigation is also likely to follow.

Uber said Wednesday that it

was confident that its drivers will

retain their independent status

when the measure goes into effect

on Jan. 1. “Several previous rul-

ings have found that drivers’ work

is outside the usual course of

Uber’s business, which is serving

as a technology platform for sev-

eral different types of digital mar-

ketplaces,” said Tony West, Uber’s

chief legal officer. He added that

the company was “no stranger to

legal battles.”

In order to classify drivers as

contractors, legal experts said,

Uber would also have to prove

that it didn’t direct and control

them, and that they typically oper-

ated an independent driving busi-

ness outside their work for Uber.

Historically, if workers thought

they had been misclassified as a

contractor, it was up to them to

fight the classification in court.

But the bill allows cities to sue

companies that don’t comply.

San Francisco’s city attorney,

Dennis Herrera, has indicated

that he may take action. “Ensur-

ing workers are treated fairly is

one of the trademarks of this of-

fice,” he said in a statement.

And California may be only the

beginning, as lawmakers else-

where, including New York, move

to embrace such policies. Legisla-

tors in Oregon and Washington

State said they believed that Cali-

fornia’s approval gave new mo-

mentum to similar bills that they

had drafted.

“It makes everyone take no-

tice,” said State Senator Karen

Keiser of Washington, whose Leg-

islature could take up the measure

next year. “It’s not just a bright

idea from left field. It gives it a se-

riousness and weight that is al-

ways helpful when you’re trying

to pass a new law.”

While much of the debate about

the California legislation has been

about the impact on fast-growing

businesses like Uber, Lyft and Do-

orDash, it could apply to many

kinds of employers, including

those that long predated the so-

called gig economy.

Religious groups said some con-

gregations would struggle to pay

for full employment benefits for

their leaders if they were con-

verted from independent contrac-

tors to employees.

“For smaller ones that operate

on very small budgets, it could

force them to lay off their rabbi or

maybe only hire them part time,”

said Nathan Diament, the public

policy director for the Orthodox

Union Advocacy Center.

Even drivers for Uber and Lyft

have been split on the bill. Some of

them visited lawmakers’ offices in

Sacramento to plead their case for

employment status. Others ob-

jected to the bill, worrying that it

would take away their ability to

switch their work on and off just

by opening an app.

“I’m torn. Drivers are so split on

the issue,” said Harry Campbell, a

driver and the founder of the pub-

lication The Rideshare Guy.

Uber and Lyft have long main-

tained that converting drivers to

employees would most likely re-

quire the companies to schedule

drivers in shifts rather than allow-

ing them to decide when, where

and how long to work. While noth-

ing in the bill requires employees

to work scheduled shifts, in prac-

tice the companies may want to

restrict drivers from working

when there are few customers.

After New York City enacted a

minimum wage for drivers this

year, Lyft put such restrictions in

place because having too many

drivers on the road without pas-

sengers could significantly raise

the minimum wage the company

had to pay under the city’s wage

formula.

“Drivers will have some restric-

tions,” Mr. Campbell said. “The

question for me is whether it will

be worth it for all the drivers to

have protections.”

The costs for app-based busi-

nesses, many of which are not

profitable, could be significant.

Uber held a troubled initial public

offering in May and has reported

large losses and slowing revenue

growth. Dara Khosrowshahi,

Uber’s chief executive, has laid off

hundreds of employees in recent

months to cut costs.

But some traditional busi-

nesses have argued that the man-

date merely levels the playing

field. Construction companies

have long complained that they

face unfair competition from ri-

vals that classify workers as con-

tractors so they can avoid paying

payroll taxes and lowball bids.

In other cases, the new law has

created anxiety and confusion.

Small vineyard owners are con-

cerned that they could be forced to

directly employ the independent

truckers they use to haul their

harvests and become responsible

for providing insurance and work-

ers’ compensation. Currently,

truckers operate as contractors,

with their own rigs and insurance,

and serve several vineyards, said

Michael Miiller, director of gov-

ernment relations at the Califor-

nia Association of Winegrape

Growers.

“The target of legislators is

Uber and Lyft, but the unintended

victims are small, independent

vineyards on the coast of Califor-

nia,” Mr. Miiller said.

Saunda Kitchen owns a Mr.

Rooter plumbing business in So-

noma County that has 30 employ-

ees, for whom she pays payroll

taxes and provides the various

mandated benefits. But Ms.

Kitchen said she believed that she

herself would have to become an

employee of Mr. Rooter under the

new law, which could cause the

parent company to leave the state.

“I wouldn’t have access to new

technology, training, help with

marketing,” said Ms. Kitchen, who

planned to talk with Mr. Rooter of-

ficials on Thursday about how to

proceed.

But Steve Smith, a spokesman

for the state labor federation,

which advised lawmakers on the

bill, said he did not believe the

vineyards or Ms. Kitchen would

be hurt by the law.

“We’ve seen no cases of legiti-

mate franchisees being targeted

or having any issues at all with the

test” in other contexts, he said.

Kate Conger reported from San

Francisco, and Noam Scheiber from

Chicago. Nelson D. Schwartz contrib-

uted reporting from New York.

California’s New Gig-Worker Law Spawns Confusion and Defiance

Supporters of the bill at the Capitol in Sacramento last month. Hundreds of thousands of independent contractors will now be considered employees.

RICH PEDRONCELLI/ASSOCIATED PRESS

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