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Cash no longer king in Italy as COVID helps government push for plastic

By Elisa Anzolin and Gavin Jones

ROME/MILAN (Reuters) – Italy’s love affair with cash is fading. The coronavirus is turning Italians off notes and coins and the government is launching a raft of incentives to accelerate the trend, believing plastic payment can curb rampant tax evasion.

The Treasury estimates some 109 billion euros of tax is evaded annually, equal to about 21% of the revenue actually collected. The government believes the problem can be tackled by boosting digital payments which, unlike cash, leave a trace.

Prime Minister Giuseppe Conte is offering refunds on some money spent electronically, tax breaks for outlets with card machines and a new 50-million euro ($58.93 million) state lottery for card users only.

The coronavirus, which forced the government to lock down the economy between March and May, is helping his efforts.

“We have seen a surge in digital payments since the lockdown, I think mainly because of people not wanting to touch notes and coins,” says Cinzia Di Siena, who has run a pharmacy in southern Rome for the last 13 years.

A study published last week by credit association Assofin, market research firm Nomisma and pollster Ipsos said the lockdown was a “major occasion for Italians to try out non-cash payments,” with almost eight out of 10 making purchases online.

It reported that 31% of Italians increased their use of e-commerce during the lockdown, versus 23% of respondents in the United States, 18% in Germany and 16% in Britain.

Despite the recent trend, Italy is nowhere near the level of cashless purchases seen in much of northern Europe. European Central Bank data shows card payments in Italy last year accounted for 12.3% of GDP, versus a euro zone average of 16.6%.

CASH PRICE OR CARD PRICE?

Many Italian market stalls and taxi drivers will still not accept cards, and it is commonplace for private doctors and other professionals to offer clients one fee for payment in cash and another, much higher one, for payment by card.

In his drive for a more cashless economy, Conte has promised that from Dec. 1 the state will refund Italians 10% of all their credit or debit card spending up to a ceiling of 3,000 euros.

In addition, the 100,000 people who make the largest number of plastic payments, of any amount, in a six-month period, will get a “super cashback” payment of 3,000 euros.

Card payment receipts will be the tickets in the new state lottery next year, while from 2021 Italians will only be able to deduct medical expenses from their annual tax returns if they attach an electronic payment receipt.

Sabrina Patrizi who has run a fishmongers for 20 years at the bustling Alberone street market in southern Rome, said the incentives are already changing shoppers’ habits even before they come into force.

“This market has always been cash only, but recently the number of people wanting to pay with plastic has trebled,” she said, adding that she had just bought a digital

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Federal government no longer controlling key COVID-19 drug

Hospitals can order a coronavirus treatment directly from Gilead Sciences and its distributor instead of relying on the government as a go-between, the Trump administration announced Thursday, saying supply of the drug exceeds demand.

Remdesivir, sold under the brand name Veklury, and other therapies are being wielded against the coronavirus and will remain a key tool even after the approval of a vaccine.

The U.S. government bought up much of the drugmaker’s supply of remdesivir in June after clinical trials suggested it could help COVID-19 patients recover faster. Federal officials wanted to lock down the drug for Americans during the scramble to get the pandemic under control.

“Now, federal government oversight of the allocation of Veklury is not required because the drug is no longer a scarce resource—a tribute to progress we have made against COVID-19 and to the strength of our partnerships with the private sector,” Health and Human Services Secretary Alex Azar said.

Johanna Mercier, chief commercial officer at Gilead Sciences, said there is “enough supply on hand to treatment every existing COVID hospitalization in the U.S.”

She said they’re also confident they can meet demand even if the disease surges.

Though the Food and Drug Administration hasn’t fully approved a treatment for COVID-19, remdesivir is part of an expanding arsenal of drugs with emergency or temporary authorization for use on coronavirus patients.

A steroid, dexamethasone, has been shown to help some patients survive and — perhaps most exciting of all — companies are reporting positive results from trials involving synthetically produced proteins known as “monoclonal antibodies.”

Scientists say therapies will remain a key part of the response for the foreseeable future.

Efforts to inoculate the American public will stretch months into 2021 and the eventual vaccine will not be 100% protective, so doctors will rely on groundbreaking treatments to keep people out of the hospital or recover faster.

“There’s two issues — no vaccine works perfectly in everyone. Secondly, there will be some people who don’t end up getting the vaccine or are infected before they are able to get vaccinated,” said Dr. John Redd, HHS assistant health secretary for preparedness and response.

The administration made 500,000 doses of remdesivir available to states and territories between July and September.

Dr. Redd said localities and hospitals were not accepting or needing the full allocation made available to them, so the government no longer needed to be involved.

“We see this as a very good sign, and it’s been a key indicator that supply of remdesivir now outweighs demand,” Dr. Redd said.

Officials said AmerisourceBergen will remain the sole distributor of drug through the end of the year, and the price of the drug will not change. It will still be Gilead’s wholesale acquisition price — $3,2000 per treatment course, or $520 per vial.

Patients generally do not pay directly for drugs like remdesivir, since the costs are rolled into overall treatment costs paid by Medicare or private insurers.

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