Rise of the Russian informer

This is an audio transcript of the FT News Briefing podcast episode: ‘Rise of the Russian informer’

Marc Filippino
Before we get to today’s briefing, I want to tell you about a new series from our sister podcast Behind the Money. Over the next five weeks, Behind the Money Night School will be your guide to the biggest economic stories of 2023. FT journalists will basically give you a crash course on major developments. Behind the Money Night School runs on Mondays starting April 17th. We’ll have a link at the show notes so you can subscribe and see you in class.

Good morning from the Financial Times. Today is Tuesday, April 11th, and this is your FT News Briefing.

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Moscow is encouraging Russians to rat each other out if they see signs of wartime dissent.

Polina Ivanova
It’s a form of policing that has basically become another pillar of support for the Kremlin.

Marc Filippino
And an EU law in the works has big pharma fighting back. But first, corporate America is bracing for tough first-quarter earnings. I’m Marc Filippino and here’s the news you need to start your day.

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Corporate America is facing its sharpest drop in profits since the early stages of the Covid-19 pandemic. Companies in the S&P 500 index are expected to report a nearly 7 per cent decline in first-quarter earnings. That compares to the more than 30 per cent plunge in second-quarter earnings when Covid first hit the global economy three years ago. Forecasts now see high inflation squeezing margins and fears of a recession holding back demand. Earnings season kicks off this Friday with big US banks reporting results.

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One of the world’s biggest pharmaceutical companies says new EU legislation may force Europeans to miss out on important new drugs. Eli Lilly CEO David Ricks told the FT’s Hannah Kuchler he’s concerned about a draft EU plan that would cut the length of time that drugs have market exclusivity. It would go from 10 years to eight. Here’s Hannah with more.

Hannah Kuchler
He said that, you know, when they can be the only one on the market and not face any competition from generic players. They’re gonna cut it by two years and then give drugmakers ways to sort of earn it back by doing the things they want them to do, which could be certain kinds of trials, maybe like showing how good they are against the competition or trials with kids or also launching in every member state at once. So that there’s sort of more equality across the market, which drugmakers don’t do at the moment.

Marc Filippino
So how much of a threat is it to drug companies and their willingness to pursue treatments?

Hannah Kuchler
Yeah, so I think the pharma companies are really worried about this. I do think that it’s an important comment by David Ricks, Eli Lilly’s chief executive, where he told me and my colleagues about particular drugs that could be affected because every law shapes the priorities about what we get as medicines. We don’t like to think about it like that, but it’s true. And so actually, to say that chronic conditions like heart disease where you can’t really sell as much in year one or two because you’re still teaching people they might lose out because you can’t go this buying on the market and make a lot of money in your short period of exclusivity. Or potentially cancer drugs, where what happens is you kind of start with the people with the most advanced cancer and then you go down and you do a series of trials and all that time you’re doing the trials, the clock is ticking. So he says that makes investing in cancer medicines less attractive.

Marc Filippino
Are pharma CEOs like David Ricks pushing to change the wording of the plan?

Hannah Kuchler
Yeah, I mean, they’re lobbying really hard and the most important thing for them would be to make sure they didn’t have this cut in the time that they have exclusive protection. Maybe there’ll end up being a compromise instead of, you know, the previous 10, it would be nine. And there might be other measures that they’d be willing to stick with, like some of the trial measures. The one I think they will be really looking to overturn is this measure about launching in every country everywhere at once. Now, that’s not because they don’t want to sell drugs in every country. Obviously, they make money wherever they sell drugs, but it’s because some countries will use this to put pressure on them, on pricing and say, well, you’ve got to launch in the next two years, otherwise you’ll lose protection. So agree to this lower price than you might have done otherwise.

Marc Filippino
Hannah Kuchler is the FT’s global pharmaceuticals correspondent.

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In Russia, there’s a return to an era when people were encouraged to rat out their neighbours, their colleagues, even their family. Russian president Vladimir Putin gave a speech last year and spoke about distinguishing patriots from scum, people who disagreed with the war in Ukraine. He said that Russia is gonna spit them out like a fly that accidentally lands in your mouth.

News clip
(Vladimir Putin speaking in Russian)

Polina Ivanova
It really sort of calling on people to find within their own communities people who might think differently, who might oppose the war, who might not be “patriotic”, in the sense that Putin means.

Marc Filippino
That’s the FT’s Polina Ivanova. She’s been writing about this new rise of Russian informers. She joins me now. Hi, Polina.

Polina Ivanova
Hello.

Marc Filippino
Polina, can you tell listeners one of the anecdotes you wrote about in your story to show just how this new informant culture is playing out in real life?

Polina Ivanova
So you have, for example, a case that I mentioned in a story that came up recently was of a guy who was sitting on the Moscow metro system, kind of looking at something, probably news items and pictures on his phone related to the war in Ukraine. And someone was looking over his shoulder and informed on that man to the police. A few stations later, he gets out on a platform and is detained. He then ends up handed down a 14-day jail sentence.

Marc Filippino
Wow, that’s really intense. But is it different from what it was like before Russia’s full-scale invasion of Ukraine?

Polina Ivanova
I think Russia was already a society filled with quite a lot of paranoia and a quite a lot of fear and something that is kind of a leftover from the Soviet period, but also, too, in more recent years. But I think it’s really hugely increased that. You have, what I’ve heard from so many people and I’ve also done this myself in Moscow when I’ve been there, is that you now you don’t even, you’re afraid of what people might even see, what you are looking at on your phone. You know, you’re hiding whatever you might be looking at on your phone. But this is, that’s one of your kind of tiny changes to your routine, just incorporating that fear into your kind of daily life.

Marc Filippino
Now, as you report, the new culture of informing doesn’t spare children either. Can you talk about the 10-year-old girl whose schoolteachers ratted her out to authorities and police even showed up to detain her?

Polina Ivanova
Varya Galkina is a 10-year-old who came back to school after a summer of really paying attention to what was going on in the world. So she comes to school and has a picture on her WhatsApp as a profile picture of kind of pro-Ukrainian symbol. And she starts saying a few things here and there in chats with other kids about pro-peace points of view and also doesn’t attend patriotism classes and gets denounced for this, informed on by her teacher and then her headmistress.

Marc Filippino
One thing that I find really interesting about this story is that the girl’s mother, Elena, was eventually found guilty of not properly parenting her child and of politically influencing her. How has Elena responded?

Polina Ivanova
So the court appointed a sort of social welfare officer to monitor the family and to kind of organise what she Elena, the mother, called a re-education of the family. But Elena is slightly having none of it, in a sense that she has taken every single one of the institutions involved in her daughter’s detention, in fact sued them, which is a really bold move, and that process is now going through the courts. She says that she doesn’t think that she’s going to be successful, but she wants a record of what happened, of how the state behaved with respect to her child. And she thinks that it will someday, historically will be important because this situation will change and there will be another era in Russian history where this will all be rehashed, talked about, discussed again.

Marc Filippino
Polina Ivanova is the FT’s Moscow correspondent. Thanks, Polina.

Polina Ivanova
Thank you so much.

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Marc Filippino
Before we go, you know the American food container whose brand name became the word for all plastic food storage containers?

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Marc Filippino
That is a 1961 commercial for Tupperware. Earl Tupper founded the company in 1946 but it’s been struggling for years. Now, it enjoyed a momentary boost during the pandemic when people were cooking more at home. But on Friday, its market cap had fallen to less than $100mn compared with a debt load of more than seven times that. The company announced it hired financial advisers in a sign that consumers may have to close the book or the lid on this iconic brand.

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You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

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