News in brief: Japan spending $40M on Texas railway

A Japanese government-backed fund intends to spend about $40 million to support a high-speed rail project in Texas connecting Dallas and Houston.

Japan Overseas Infrastructure Investment Corp. won approval from the transport ministry to spend the funds, according to a Nov. 21 statement on the ministry's website. The money will be spent through the Texas Central Partners, a private group set up to develop the high-speed line that would link two of the state's biggest commercial hubs in 90 minutes.

Japan's government has vowed to help rail operators and equipment makers win contracts outside the country, where a shrinking population is limiting growth prospects. JR Central, Japan's largest bullet-train operator, has been working with Texas Central Partners to assess feasibility of high speed trains in the state.

The Texas Central Partners investment is the second time this month a Japanese-style high-speed rail project in the U.S. has won government backing. A plan to build a line in Washington won $28 million in funds from the U.S. government two weeks ago. Both projects would use JR Central technology.

-- Bloomberg News

Investor Icahn wants AIG to break up

NEW YORK -- Activist investor Carl Icahn is putting more pressure on American International Group Inc. to break itself into three separate companies.

Icahn said Monday on his website that after speaking with AIG Chief Executive Officer Peter Hancock several times, Hancock remains unwilling to split the insurer up. Icahn vowed to reach out to shareholders directly and said he may propose adding a new director who would agree to succeed Hancock as CEO if asked by the board to do so.

AIG confirmed Monday that it is maintaining an "active dialogue" with Icahn and said that breaking the company up "did not make financial sense."

Last month, Icahn said AIG was "too big to succeed," a play on the phrase "too big to fail," which was used during the financial crisis to explain why the government was forced to prevent AIG's collapse. It was thought at the time that a collapse of AIG would have a cascading effect, dragging down other companies entangled in the growing financial crisis.

The U.S. bailed out AIG at a cost of $85 billion, money the company has since repaid. Icahn said Monday that he holds more than a 3 percent stake in the New York company.

AIG shares rose 34 cents to $62.55 in early trading Monday.

-- The Associated Press

CVS makes deal on cholesterol drug

NEW YORK -- CVS Health Corp.'s drug-benefits unit will cover Amgen Inc.'s new cholesterol-cutting injections while excluding a competing treatment from Sanofi and Regeneron Pharmaceuticals Inc., pushing for savings from medications that list for more than $14,000 a year.

The decision, which applies to workers whose employers use CVS Health for drug coverage, shows that benefit managers are continuing to be aggressive about setting exclusive deals with drugmakers to get better prices for expensive new therapies.

CVS said that its independent pharmacy and therapeutics committee had reviewed data for Amgen's Repatha, as well as Praluent from Sanofi and Regeneron Pharmaceuticals, and concluded that the drugs were clinically equivalent.

"That puts us in a situation where we can bargain with the drug manufacturers" and get a significant discount in return for an exclusive deal, said Troyen Brennan, CVS's chief medical officer, in a phone interview. "You have to use every tool that you have to try to keep costs down today."

While the discount CVS obtained from Amgen was "substantial," Brennan said he would not reveal the amount or the length of the contract with Amgen.

-- Bloomberg News

Ford drops Takata over air bag trouble

Ford Motor Co. will not be using air bag inflators made by Takata Corp. in future vehicles, another blow to the troubled Japanese parts supplier as the auto industry continues to shun its product.

Ford joins Honda, Toyota and Nissan is deciding against putting the inflators in cars, trucks and SUVs now under development.

Takata inflators can explode with too much force, sending shrapnel into drivers and passengers. At least eight people have been killed worldwide and hundreds injured. The inflators have led to the recall of 19.2 million vehicles in the U.S., and government regulators are investigating the possibility of millions more.

Ford has recalled more than 1.5 million older Mustangs, Ford GTs and North American-built Ranger pickups to replace the inflators. Spokesman Kelli Felker would not say if other models have Takata inflators, but did say the company has recalled all vehicles with inflators that Takata has determined are defective.

Takata uses ammonium nitrate to create a small explosion that inflates the air bags in a crash. But the chemical can deteriorate under prolonged exposure to airborne moisture, causing it to burn too rapidly and blow apart a metal canister designed to contain the explosion. Ford has decided to stop using inflators powered by ammonium nitrate, Felker said.

-- The Associated Press

Business on 11/24/2015

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