Good morning.The Federal Trade Commission is launching a probe into recent shortages of chemotherapies and other drugs, examining the role played by companies that help buy and distribute the bulk of medicines sold to U.S. hospitals.

The inquiry shines a spotlight on a little-noticed corner of the drug supply chain—but one that can have an outsize impact on stores of critical medicines.

• The investigation: The agency is exploring whether the companies that broker drug purchases for hospitals, along with the middlemen that ship the medicines, have misused their market power to push down prices of generic drugs so much that some manufacturers can’t profit and have stopped production, causing shortages.
   
• Specifically, the probe is seeking information about a market dominated by a handful of companies. Three groups purchase drugs on behalf of most hospitals in the U.S., while the three leading wholesalers supply about 90% of drugs to hospitals and other buyers across the country.
   
• Industry response: The Healthcare Supply Chain Association, the trade association representing the hospital purchasing groups, has blamed drug shortages on manufacturers’ quality problems and said the groups work with hospitals to manage shortages and increase the number of drug suppliers.

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The China conundrum facing Wall Street banks.

What’s the definition of a Chinese company? That apparently simple question is proving difficult to answer, creating headaches for Wall Street banks that are increasingly being forced to juggle the competing demands of Chinese and U.S. regulators.

The uncertainty means bankers don’t know for sure which IPOs need approval where—or how far Chinese regulators could go to block deals in foreign markets.

Chinese companies have raised more than $77 billion from U.S. initial public offerings in the past decade, according to Dealogic. But that source of business has dwindled in recent years, forcing Wall Street firms to look outside China for new sources of business.

• The Treasury Department's Office of Foreign Assets Control has sanctioned two U.A.E.-based companies, one Iranian company and one Turkish company, along with three individuals, for illegally facilitating the export of unspecified U.S. goods and technology to end users in Iran, including the already sanctioned Central Bank of Iran. 
   
• Self-driving car company Waymo issued its first-ever recall over a software issue after two of its cars in Phoenix collided with a pickup truck being towed backward.
   
• New York City is suing a slate of social-media companies, alleging that they are causing a youth mental-health crisis.
   
• A tiny hedge fund is becoming a thorn in the side of energy giant BP. London-based Bluebell Capital Partners has a history of aiming at big targets, and sometimes hitting them. 
   
• A French appeals court on Wednesday handed a one-year prison sentence to former President Nicolas Sarkozy, who was found guilty of breaking campaign finance laws during his failed 2012 re-election bid, though it remains uncertain if he will spend any time behind bars.

Climate change has hit home insurance. Is health insurance next?

Climate change is making house insurance more expensive and harder to get. Health insurance could be next, as research shows extreme heat and wildfires are putting more people in the hospital.

Californians exposed to both extreme heat and wildfire smoke on the same day were at greater risk of being hospitalized for cardiorespiratory illnesses, according to a study published earlier this month by researchers at the University of California, San Diego. In particular, the study linked higher temperatures to heart attacks and strokes and found that wildfire air pollution increased the risk of cancer and lung problems.

U.S. probes Israeli strikes that killed civilians in Gaza, possible use of white phosphorus in Lebanon. 

The U.S. is investigating several Israeli airstrikes in Gaza that killed dozens of civilians and the possible use by Israel of white phosphorus in Lebanon, as part of a probe by the State Department to determine whether one of America’s closest allies has misused its bombs and missiles to kill civilians, U.S. officials told The Wall Street Journal.

The process shows the dilemmas facing the Biden administration, which so far has ruled out putting conditions on arms transfers to pressure Israel, but faces increasing calls from some members of Congress to do so as the war wears on.

• Gaza Cease-Fire Talks in Limbo as Israel Sits Out Next Round

• A senior Republican lawmaker publicly warned about an unspecified “serious national-security threat” to the U.S. and requested that President Biden declassify information to allow for an open discussion on how to respond to it.
   
• The consequences of politics in Washington are playing out in Oleksander Kucheriavenko’s Humvee on the eastern front of Ukraine’s war against Russia.
   
• Workers at South African mines are holding their colleagues hostage underground amid a turf war between rival unions. 
   
• Iranian officials said two explosions struck natural-gas pipelines in the country early Wednesday, calling the blasts a terrorist attack, which comes amid heightened tensions in the Middle East over the Israel-Hamas war in Gaza.

• Morgan Stanley plans to cut several hundred jobs in its wealth-management division as new Chief Executive Ted Pick seeks to rein in costs in an area that is critical to the Wall Street firm’s success but has shown signs of weakening lately.
   
• The generative AI boom reflects a period of tech innovation that is ideally suited for revolutionizing the business world—unlike previous tech booms that favored the creation of big tech companies that served the consumer market.
   
• A Kremlin spokesman said that the fate of Americans detained in Russia could only be resolved “in silence.”
   
• The House on Wednesday rejected the smallest proposed change yet to the $10,000 cap on the state and local tax, or SALT, deduction. The bill from Rep. Mike Lawler (R., N.Y.) would double the cap for married couples to $20,000, only for tax year 2023 and only for those making less than $500,000.

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