♪ emily: i am emily chang, and this is the "best of bloomberg west," where we bring you the top interviews from the week in tech. coming up, the iphone maker ordered to cough up $18 billion. is your effectively -- europe effectively putting tech giants on notice? we will discuss. plus, shares jumped off a conversation with evan williams. we will bring you the interview with the twitter cofounder. it is go time for commercial drones.

we will discuss the latest regulations as american businesses take to the sky. first, to the week's lead. european regulators slammed apple with a $14.5 billion tax bill, the largest tax penalty in the eu's three-year crackdown on so-called "sweetheart deals." these are arrangements in which a multinational company moves profits and costs to where they're taxed advantageously. in this case, ireland. its corporate tax rate is the lowest in western europe and it has attracted more than 700 u.s. companies to set up shop there, including google and facebook. apple employs 6000 people in ireland. in this week's ruling, the eu commissioner said that ireland allowed apple to pay an effective tax rate of 1% on its profits in 2003, down to .005% in 2014, and that, she said, gave apple an unfair vantage. here she is in an interview with

bloomberg tuesday. >> the tax rate in ireland is 12.5% and, obviously, most companies, national or multinational, they pay the corporate tax rate in ireland. and they have to look at some apple, onlyn case pay a tiny, tiny fraction of the taxes than they themselves have to pay, and that is obviously not fair competition. it is not a level playing field. emily: we also spoke to the irish finance minister and we will bring you his comments in a moment. first, take a listen to our conversation with "bloomberg intelligence" litigation specialist matt larson and alex webb on apple's response. >> a lot of people were surprised about the scale of the back payment. apple's defense is they have been in ireland for a long time. this agreement has been in place since 1991. it was always legal. they never used any legal loopholes.

the agreement they had with ireland was such that it was completely above lord -- aboveboard. emily: we also have a picture of steve jobs at the first apple factory in ireland. >> yes, they opened a plant in cork. yes, apple, as ever, they always talk about their customers. although, who is writing the stories? of course, journalists. emily: what are the next steps for apple in the legal battle? >> apple and ireland will appeal this decision to the european general court in luxembourg. it is the same court hearing the appeals in the starbucks, netherlands investigation and the fiat chrysler case. both of which are significantly smaller, but could give some indication in how the appeals court may take the decision. this whole process is going to take, ballpark, two years to determine.

after that, there are further opportunities to appeal to even higher courts in europe. it will be quite a while before we get a final decision. emily: alex, leading up to this point, the u.s. has been stepping up its defense of apple calling the eu a super unnatural tax authority, indicating the -- they are overstepping their bounds. what did we hear from the united eight -- states government today? >> they are not happy. you have to be careful calling them a defense of apple. they are interested in ensuring the tax is paid in the u.s. -- for every dollar that apple days -- pays in tax overseas, that is then deductible from the tax they have to pay in the u.s. should they ever repatriate their funds. $14 billion going to ireland, that is $14.5 billion not going to the irs. emily: we mentioned that apple is fighting this ruling. ireland is fighting this as well. which leads us to the question, why wouldn't ireland want to collect $14 billion from the

richest company in the world? bloomberg's mark barton spoke to the finance minister of ireland and they pointed out that the opposition party would like to just -- see just that. >> why don't you just accept the money and shut up? 13 billion euros plus interest is a lot of money. >> because as a minister of finance, i have a responsibility for advising the government on these matters. this is the government that rescued ireland from the verge of bankruptcy from 2011 on. and foreign direct investment and the creation of high-level jobs is fundamental to our economic policies. and we stand by our economic policies. and we are going to protect our economic policies. we're not going to get into a situation of short-term gain for long-term damage to the economy. emily: standing his ground there alex. , what kind of long-term damage are we talking about? what have we heard from other tech companies? >> this is, as we heard yesterday, people were saying on

a scale from one to 10, 10 being extremely damaging, it's on the lower end of that, a two to three. ireland has thousands of people employed by u.s. tech companies. it ceases to be the automatic place where american companies might go. the thing is also from the flipside, if you are any other country in europe, ireland is 80 -- 180 billion euros in debt from when it's banks were bailed out. so, this $14.5 billion will go toward paying this off. if you are a german citizen, you are thinking why should i subsidize apple to have 5.5 million jobs in ireland? emily: i know you have been going into the weeds on this, looking at the tax structures that other companies have. do any of them have similar arrangements? >> a lot of companies make use of ireland -- we consider it the austin, texas, of europe. there is a tech community that has been built up there.

ireland has developed favorable tax laws, specifically relating to transfer pricing. which is what this whole apple investigation took a look at. as a result, you've got a lot of companies that have organization -- subsidiaries set up in ireland that have these transfer pricing arrangements in place. you also have a big content -- contingent of life science pharmaceutical companies. there is one with significant operations in ireland, both because it is a good place to be, there are favorable tax laws , and there is also favorable treatment in how their taxation system treats these transfer price agreements. this is a little bit of a warning shot from the european commission, and it may encourage some companies to take a second look at whether they have negotiated too sweet of a deal with ireland or even look at how their overall multinational set up is working for them. emily: our conversation with bloomberg intelligence analyst matt larson from washington and bloomberg news reporter alex

webb, who covers apple. coming up, our market moving conversation with ed williams, ceo of medium and cofounder of twitter. why he says twitter should weigh all options for future m&a. hospitals are prescribing patients a healthy dose of we will explain why -- dose of virtual reality. we will explain why vr is becoming a more affordable option for doctors. this is bloomberg. ♪

emily: evan williams has played a major role in shaping how users express themselves online, from founding blogger in 1999, then he went on to start podcasting, and from then, a little side project called twitter was born. he became ceo of twitter and remains on the board of directors. he was not done creating. in 2012, he started medium for a

way to publish posts longer than twitter's 140-character limit. >> medium is a way to write stories and ideas, and is meant to be open for anyone to find their audience. it is an update on blogging and social media, but it is focused on things that can be longer. it's useful by amateurs and professionals, everyone from the president and the white house publish on it to individuals who just have personal stories to tell. emily: right. so, president obama, bono, hillary clinton, publishers. what you see as the balance between amateurs, influencers, and publishers? evan: we think the mix is really important and it makes the conversation better. the entire point of medium, unlike a stand-alone website, if you publish on medium, you are in the mix. your ideas bounce around with

other people. you are more likely to be found. you can respond. people can find you. one of our mottos is that great ideas can come from anywhere. we need professional journalists and readers and writers creating all the time, but, especially when it comes to writing, there are tons of individuals who have unique perspectives and valuable ideas and the ability to articulate them, and so we offer a place to do that and to find your audience. that makes is what makes it work -- that makemix is what makes it work. it is where a business leader can write something and a customer can respond or vice versa. because there is that diversity of voices, you get much more insight. emily: medium is beautiful, simple, elegant. where are your monetization? how do you maintain that experience and make money at the same time? evan: we are working on growing the monetization piece right now.

we just started it in the spring, after building the platform for a couple of years and really making it work for individuals. now we are focused more on enabling professionals as well, which, of course, means getting them paid. we have native advertising as part of the product now, where brands are publishing on medium and working on the publishing side. some publishers are also implementing our beta subscription program as well, so you can actually create a pay wall or a membership program for your content. that is looking good, but it's in its early stages. emily: hillary clinton used medium to explain her vp pick. tim kaine used it to respond. mitt romney explained why he is not running for president. how does that come about? do you have a team of people trying to get hillary to post on medium? what is the play-by-play? evan: we have an outreach team thatis in receipt -- d.c.,

is sort of a white glove service team. they helped get the ball rolling. it has taking on its own momentum. medium has.c., become the default. if you are in d.c. or active in that world, or has something of substance to say, medium has become the default for that. all the political major presidential campaigns were on there, save one, and lots of big commentators, professionals, journalists, etc. it has gotten this momentum. people from that world read it. if you have something to say, you go there to say it. emily: it is interesting because these are things that would have been published in our beds -- in s in traditional newspapers. one person who has not published on medium is donald trump. any effort to get him? evan: we are happily open to what he has to say.

we are happy to add his voice to the mix. emily: he has taken fine advantage of twitter. [laughter] he seems to prefer expressing himself in 140 characters. what is it like watching trump take off on twitter? the same asf everyone, i guess, a mixture of bewilderment and some fear. it has been fascinating, especially the most recent revelation that his tweets -- you can distinguish his tweets from his staff by looking at the source. years ago when we built in that ability to see the source, we -- the device that a tweet was posted from, we did not picture that particular use case for that, but i'm kind of glad it is there. emily: there was a provocative title in vanity fair, "silicon valley created donald trump." do you think silicon valley created donald trump or twitter created donald trump? without twitter, donald trump would not be where he is?

evan: i would hate for us to take the credit or the blame for that. i think it is a result largely of our media ecosystem now, which has tremendously good and bad things. so, that's -- when i started working on the internet, i was very excited that anybody could put their voice out there, and i just thought the world is going to be smarter, wiser, more intelligent when the truth is out there unfettered. really, the reason i'm still working in this area is because i realized it is not as simple as that. the tremendous amount of noise has not necessarily made us smarter. in many ways, it has made us dumber. there's so much we have to do to build on top of the systems and on top of this free flow of information to actually take full advantage of it as a society. we have a lot of work to do. emily: you've had plenty of high-profile tech ceos coming out saying they are against trump.

where do you stand on that? do you think he would be good or bad for innovation? evan: i am firmly against trump. emily: how do you, as somebody who has built multiple platforms for free speech, balance your own personal, political views with your responsibility to the platform and the users? we just saw this issue came up with facebook and their trending topics section -- session where , they were accused of the prioritizing conservative stories, which they fervently denied. it's interesting -- evan: i will also say, i am not firmly against all republicans. what i am proud of is on twitter and medium, we built platforms that are neutral and we worked very hard to give an equal, take both sides. on medium, we have many senators, many congresspeople, about an even mix on both sides. on our outreach team, we employ an equal number of people

who reach out to the right and left. there is nothing in our system that bias is one side versus the other. i think that has created a very healthy exchange. personally i read and recommend , viewpoints from both sides. because they are on the same platform, again, people are more open to them. emily: we will continue our conversation with ev ahead, asking the twitter cofounder his thoughts on jack dorsey and potential twitter m&a. that is next. this is bloomberg. ♪

emily: now back to our conversation with twitter cofounder and medium ceo evan williams. medium has become a platform -- place where amateurs and influencers of all kinds post longer pieces. president obama, bill gates, bono, ford, hbo, just a few examples of people and companies who have used their forum to share their thoughts with the world. the founder of the bankrupt

gawker recently published a piece about freedom of the press and where it stops. itsked evan williams about in part two of our conversation. evan: it is a little bit scary for the press, especially if a -- an unknown source of money is fighting you. while i wasn't a fan of a fanhing gawker did, i'm of freedom of the press. i think it's critical. i think, ultimately, gawker should prevail in the appeal. it would be a bad thing if random media sites can be taken out by people who don't like what they say. emily: it is obviously a really important question. i'm sure it's a question you deal with behind the scenes a lot. what is free speech? what counts as they are? what is going too far? when you started blogger, there were trolls. there was online harassment. it almost seems like nothing has

changed. evan: it has gotten worse for sure. early days of the internet, it was a little better. we sort of felt like it's a big club. if you are there, you're welcome . to use a metaphor, we had dinner parties with our front door open. if you stopped by, everyone was glad to see you. so much of the internet has evolved with that same default framework. the idea that anyone can join any conversation is not something we expect in the real world. because so many wonderful things come from that online, there is a lot of desire to hold onto that ability, and yet, it causes so much problems when you open it up to the masses. emily: why is it so hard to crack down on online harassment? why is it so hard to quiet the trolls? evan: because the line is always fuzzy. when you really dig into these issues, it seems much easier from the outside than it is when you actually look at the details. there's a lot of stuff that is banned.

a lot of the rhetoric would give you the impression the twitter or other services don't do anything. there are huge teams august on teamsssue and -- huge focused on these issues and they delete stuff all the time. where it is tricky is where the lines get blurry, and if you have a philosophy of we want to defend free speech, and we want to allow people -- the principle of free speech is you have to defend speech even if you don't agree with it. while that is not a legal requirement because twitter is a private entity, as are all these other services, it is a value that we hold, that people should be able to get out thoughts even if it aren't popular, and, therefore, there is a judgment call all the time. the policies are evolving. the tools are evolving. but it is not a trivial issue. emily: do you think twitter should have taken this on sooner? emily: -- evan: dick acknowledged that a couple years ago and --

in myself, even from the earliest days, i think we would have thought about it different architecture for the service had we known how severe this issue would get, because i think it really has gotten a lot worse in terms of the vitriol and the level -- the severity of the attacks that some people suffer. a lot of it -- the architecture of the service -- a lot of what allows really great things does allow the bad things, but i still think there are things we can do. i met with the team fairly recently that is working on this . there's a bunch of smart people who are going to be improving it soon. emily: look, your cofounder of twitter. you are one of the biggest shareholders of twitter. you have been the biggest champion of twitter. this is a company that had a market cap high of $25 billion and now is at $13 billion. do you think you can ever get back to those heights?

-- do you think it can ever get back to those heights? evan: i cannot make any material statements, being a board member of twitter. i think very abstractly speaking, it is a large service and a valuable service. there will be -- the thing that twitter provides to the world is real-time information layer. that is incredibly valuable and can be a lot more valuable. it is a matter of innovation and development. there is not an asset like twitter in the world in terms of the mix of individuals and world allers and entertainers and the information that is created on a daily basis. there is still much more that can come out of that that, i would say, you know -- i am an optimist in general. emily: what is your faith in jack? evan: my faith is high in jack. i fully support jack. emily: i know you can only go so far. we see a lot of m&a. do you see twitter remaining an

independent company? evan: no comment on that. we are in a strong position right now, i think. as a board member, we have to consider the right options. emily: the last twitter/medium question -- medium is a complement to twitter, but it is almost the opposite of twitter. you are more in-depth. do you see them as potentially opposite in a way? evan: in some ways. part of my reason for working on medium is because, in a few years while twitter grew and facebook evolved and instagram and all of these other social media platforms, it really took an increasing amount of our attention and energy and innovation of our technology development. they still all pointed to and talk about -- all talked about

nonsocial media. articles, text, journalism was still incredibly important. people were consuming more and more of it, but it had not evolved as much. online publishing had not evolved as much over those years. that is why they are incredibly complementary, even though they are very different. because they are very different. twitter is not really -- it is more of a distribution vehicle on more substantive content a discussion platform than it is somewhere where you offer ideas or offer more complex ideas for stories. twitter and medium are complementary. that's kind of the reason i wanted to work on medium. emily: that was ev williams, twitter cofounder and medium ceo. coming up, some call it a silent revolution. could the adoption of digital health care disrupt the economy?

we will talk to a veteran health care investor, next. if you like bloomberg news, check us out on the radio. you can listen to us on the bloomberg radio app, bloomberg.com, or in the u.s. on serious xm. -- sirius xm. ♪

emily: welcome back to the "best of bloomberg west." i'm emily chang. it is time now for series a. our weekly deep dive into investing. -- tech investing. this week, we spoke to stephen kraus who heads up the firm's health care investing. a blood testing startup drew application for a diagnostic blood test for the zika virus after regulators found problem -- problems with the way theranos was gathering patient data. u.s. regulators sanctioned theranos. we asked his thoughts on the startup.

take a listen. you have been investing in this space longer than newer investors. i wonder if you've seen anything like this. stephen: it is amazing. for someone who cares deeply about putting products and services in the hands of patients and doctors, it is pretty maddening. anyone who is serious as a health care investor and entrepreneur -- enough is enough. the company had to pull back test results. their ceo has been banned from operating a lab. they've had partners leave them. now this zika result proves they did not operate the clinical trial well. it is frustrating. frankly it overshadows a lot of , the great work that is happening in health care. emily: did she pitch to you? stephen: she did not. if you talk to most health care investors, she did not rich -- deep to anyone who had health care experience. it is a complex industry where you think you would want folks who have health care experience. i hope we can talk about a lot

of other great promising companies. it is very frustrating and i think it proves if you try to put valuations ahead of patients, you're going to get burned. theranos was burned. emily: where do you see potential? there are a lot of newer investors getting into the space. you have been doing this a long time. stephen: it is a great time in health care. his industry that, for too long, -- this is an industry that, for too long, it has been pretty archaic and behind other modern industries in terms of technology. i think we are in the 1990's of enterprise software in health care. only five years ago, 50% of doctors did not use software to capture your clinical information. that is shocking. emily: pretty sure my doctor still writes on a notepad. [laughter] stephen: that is a problem and that is changing. emily: i like her. stephen: you like her, but your data is nowhere. if you want to manage a population's health, and you don't have that information, you cannot really change health care for the better or lower costs or

improve quality. that is where we are sitting today. you have 100% of doctors using digital health records. now you can do things happening in other industries like complex data analytics. that can really improve the quality of care and the cost of care. emily: where do you see the most potential for disruption? stephen: i think it is the analytics layer. you have companies like flat iron or catalyst health that have raised attractive rounds. i think consumerization of health. there are many things that are happening in the healthcare ecosystem. you see the rise of individual exchanges and you see individuals having to pay thousands of dollars or more. 10 years ago, only 10% of payons -- patients had to thousand dollars a dr. bowles. thousand dollar deductibles. consumerism in health care is an interesting place to invest in terms of app and software that

can help people make decisions. emily: apple bought a company in this area. they have barely scratched the surface, it seems. do you think they can become a big player here? stephen: i think apple is making the moves. i think glimpse is really interesting. this concept of a personal health record. we all should want to own our health data and want to know about our health data. the idea of a personal health record has been around for a decade and hasn't taken form. glimpse is a personal health record, and i think apple has the interface and the dominant market share with their devices where, maybe the integration of that personal health record can become a reality for patients and get them involved in their care. emily: how do you see the exit environment for biotech and health care companies in comparison to enterprise tech. that's what we often focus on here. apple has made an acquisition. ibm has been very acquisitive. what is the environment like right now? they require a lot of money and

a lot of capital. stephen: they require a lot of capital. especially on the biotech side. when you think about biotech and health care, they are very different. health care i.t. -- they look a lot like consumer technology companies. innovative technologies that gain scale in the marketplace and then companies like ibm and google will come in and acquire them. they have to have exposure to the largest sector of our economy. it is an economic exposure play. i think all the large software companies will make those acquisitions. $40 billion has been spent here today on acquisitions -- spent year to date on acquisitions in health care i.t. pharmaceuticals, it is different. they are in the earlier stage. they are moonshots. they have outsourced research and development to biotech companies so they are making those acquisitions well. emily: accompanied you invested in -- it is so fascinating and exemplifies what you do. they went public very fast. they are focusing on reproductive technology, where there has not been a lot of

innovation. talk to me about making a bet on this company, where there is so much potential, yet a lot is unproven. is one: having a child of the most important things that people can do, humans can do. science is trying to help couples who face infertility, give them technology that helps them have a child. the technology was finding that reverse scientific dogma, that women are born with a certain number of eggs in their own variant cool and that -- their ovarian pool and that depletes over time -- it turns out that that may not be true. the founder found that women have them sell -- have stem and the eggseggs, can refurbish and you can harnish that technology to help women become fertile and have a child. i cannot imagine of a greater company to invest in. the founder is awesome. it is a perfect combination of

what we do at venture capital. we invest in a huge dream that changes peoples' lives. how would you not want to invest in that as a public or private investor? if they are right, it is a huge multibillion dollar opportunity. emily: what is your take on this mylan epipen controversy/outrage? stephen: outrage. an unfortunate time with kids going back to school. the company has had to react. their stock price has taken a hit. it's good when the markets have morals to them, too. i think it's a debate we have to have in society about how we deal with innovative pharmaceutical companies, like ova-science, how you regulate and allow exclusivity for those companies, unlike a mylan, which is simply marketing agene -- a generic. ova-science should have a greater market exclusivity then mylan should. they should have much greater pricing product. evan: trump versus -- emily: trump vs. clinton on

health care -- who is better? evan: clinton will provide stability in the markets. that is important because you are making long-term bets in public policy involvement. emily: last question, stem centrex was a recent biotech deal that had huge acquisition for $10.2 billion. is this a deal that traditional vc's missed? how did that happen? how do you make sure we get the next one? stephen: we always make sure we can get the next one. we miss one from time to time. emily: it was not just you. stephen: it's a really interesting area stem cell , technology. it could be a moonshot. the acquisition could be zero. we miss some and we get some. luckily, we get a lot of them. emily: so fascinating. it could be zero yet they are paying $10 billion for it. stephen: if it works, it could -- mylan, which is not a very innovative company, produces -- $1.8 billion in ebitda each year. these are highly profitable companies when you develop a

drug and they work. they are multibillion-dollar franchises. emily: coming up, cleared for takeoff, the new regulations that could get commercial drones in the air faster. the details, later in the show. this is bloomberg. ♪ >> from san francisco to silicon valley, we are covering the story that is changing. talking to people today you will be talking about tomorrow. and tackling the tech industry's biggest debates. >> we are starting to see catastrophic events. >> when we have companies starting to grow fast, we don't tell them to slow down. >> innovation, technology, the future of business -- "bloomberg

emily: thousands of would-be drone pilots are racing to get licensed under new faa regulations that went into this week. the new rules frees companies from having to get special privileges, a process that took months. more than 3000 people have signed up to take the test so far and the faa is estimating the number of drone operators will exceed the nation's 171,000 private pilots in a year. we caught up with a company that provides on-demand drone insurance. >> before, you could fly a drone commercially, but you had to get a special exemption and it took quite a while. they streamlined it. but you had to be a licensed pilot. now you can do it as a matter of course. you have to get a license, but it is much easier. you just have to pass a

knowledge test. as you said, 3000 people signed up to take that test already today. it takes about 10 days to get a license going, but once that happens, you should be able to fly pretty much at will after that. there are a few restrictions -- you cannot fly over people, it's daytime only in low altitude. otherwise, it is really opening up this to a lot more people. emily: what do you like about these new rules? what don't you like about these new rules? >> what i like about these new rules is that for the first time, you can go to an apple store and buy a phantom 4 and take a test at one of 600 test centers, get vetted similar to tsa pre, get insurance, and get your certificate to be able to be a remote pilot. and make the money back that it costs you to buy that drone in a number of weeks. that is exciting for the -- any industry. emily: is there any area that you wish these rules went farther? or anything that you dislike about them?

>> i can tell you what our customers think. our customers have been talking about their nervousness around the waiver process. almost every provision of this new rule has the ability to submit a waiver online that you should have the right to fly near a certain airport, or in -- beyond visual line of sight, or other types of conditions that are normally prohibited. they are nervous about how much -- how that process is going to work and how much time it will take. time will tell. emily: talk about rules for hobbyists or the lack thereof? as i understand it, if you or i want to buy a drone and use it for fun, we don't have any rules to follow. alan: yes and no. so, there are no specific rules, but you are supposed to follow the safety requirements of a community organization. basically, what that means is very much similar to the

commercial rule, you are not supposed to fly over people, go too high, not go too near airports, etc. there are certainly questions about how well that is enforced and we have seen hundreds of reports of drones flying near planes and whatnot. but, essentially, the rules are very similar. emily: i was speaking to the secretary of transportation, anthony foxx, last week about this very issue and the fact that rules for hobbyists could go further. what is your take on whether more regulation is needed in that area or what? >> we do not think more regulation is needed. we think more education is needed. really, it's about letting people know what they can or cannot be doing, rather than any form of regulation. that seems to be working well.

the industry seems to be -- the know before you fly campaign, etc. really making sure there is material in every box to let people know what they should or should not be doing. emily: take a listen to what secretary fox had to say about the new rules and what industries they could help open up when it comes to drones. take a listen. secretary fox: it will open to -- open the door to many more uas's.commercial uses for on the other hand, i think as we have commercial uses, hobbyists, airplanes, the integration of all those different uses into a single system is going to be the most complicated part of this. emily: so, let's talk about jd -- two of the industries that this will affect most. there has been talk about agriculture, transportation. what do you see? >> on the ground, an imaging is the number one vertical. that would be things like real estate photography, event photography, wedding photography.

anybody who is a photographer or videographer is basically a drone photographer and will be going out to get a license. the remaining large areas are inspections, and that could be anything from roof inspections, to cell tower inspections, any number of things that people inspected with human beings but are more efficient and safely done with drones. emily: what about amazon? how far off is an amazon drone delivering packages to my doorstep? >> amazon is doing most of its testing in cambridge and the u.k. right now. we don't really know exactly how far they have gotten. from a regulatory point of view, there are stumbling blocks that they and google and others wish had gone further. but also the potential to obtain waivers for them. we have to see how the technology develops and how the process develops around these deliveries. emily: alan, as the person who is reporting on these issues, what do you think is the next

frontier? the next story the next , development when it comes to drones and drone regulation? alan: it really does feel we are -- feel like we are seeing a critical mass here of change. we are going to see, by the end of the year, rules that will allow drones to directly fly over people. it's going to be relatively simple at first. just covering the drone with foam, so if it falls, it will not hurt anybody. the next step after that, i think, will be to give broader permission to fly long-distance. railroads, power companies want to be able to fly these things miles and miles over infrastructure to inspect them and use video links. once that happens, i really think we are going to see some tremendous growth and then, after that, you know, probably these deliveries that were talking about -- we're talking about. emily: that was verifly ceo jay brackman and alan levin.

doctors are examined the effect of virtual reality on our minds. how the new technology can help with pain management. this is bloomberg. ♪

emily: now to another technology taking off. forget morphine, hospitals are turning to virtual reality as an effective treatment from -- for everything from intense pain to alzheimer's to depression. with the price of hardware falling, vr is offering an affordable option. we take a look at the effects of virtual reality and how it could impact our minds. >> virtual reality is a little bit like a spotlight. the experience of the mind being in this environment when it is immersed in this peaceful, positive environment. it is almost like the rest of your experiences are unable to be noticed because it recruits so much of the brain to focus on that spotlight that everything outside of that environment falls to the wayside during that experience of virtual reality.

>> cedars-sinai here in l.a. is one of a handful of hospitals experimenting with a surprising new treatment for people suffering acute pain. >> how long have you been here? what brought you here? >> i have been here for about four days now from chronic back pain. just taking some medications, and possibly an epidural soon. >> i'm in the hospital because i have a total artificial heart. last week, it had a failure. i have been on a heart medication for pain for five years. i am trying to get off of it. >> i'm constantly having pain in my left upper quadrant in my right -- and my right lower quadrant. it goes into my back. i cannot relax. i have had every test possible. if there was a surgery, i would do it today. >> chronic pain is more than just a physical experience, but

it is the biopsychosocial experience. virtual reality has a way of affecting people physically, emotionally, to some degree even socially. >> i decided to try something different, something new. >> all right. ready? >> every time they send us a new one, it is a little bit lighter. do you want to go to iceland? do want to try that? are you afraid of heights? >> no. >> perfect. >> virtual reality undoubtedly has an effect on the human mind. it sort of hijacks the brain. it can be used for evil, but it can also be used for good. >> what are you seeing? >> it was like ice formations. it makes you feel like you can grab them. >> honestly, in the 18 years i have been practicing medicine, i cannot think of anything i have

done that is more effective and you can physically see their body language change. they often look straight ahead like they are looking at a still image. the moment that they turn their head, that is a magical moment. >> it literally is like totally panoramic. >> 360. >> at the very least, it does no harm and has the potential to cut down on the need for drugs like morphine and make patients more relaxed and have them wanting to go home sooner. >> would this be something you might reach to before morphine? >> i am sure i will try this first followed by the rest of the stuff. >> in a million years, i never would have thought they would have brought it to a hospital. it really felt like i was there. >> it helps me relax. when the muscles relax, the pain goes away. >> vr seems to take patients out of their pain, at least for a

while, but it also seems to take them out of the confines of their hospital beds while they have the headsets on. for those trapped by their condition for long periods, it may be a welcome relief and help mitigate some of the stress of being in a hospital. >> it is kind of like a jail cell. i can get out, go around, and walked, and everything else -- and walk and everything else, but you are still in this 4x10 room. >> we need a virtual reality pharmacy. shelves, so to speak, of vr content that is evidence-based that i can reach off the shelf and map to my patient's needs. the more of that that we have, the broader the opportunities we have to engage patients with virtual reality. this is not about silicon valley entrepreneurism. it's about when and whether we should interact technology with a compelling human experience of being a patient. it is not a computing science or an engineering science, it is a social science.

emily: that does it for this edition of the "best of bloomberg west." we will bring you the latest in tech throughout the week. be sure to turning wednesday for our -- tune in wednesday for our special coverage of apple's live event. which announcements can we expect from the ceo, tim cook? i will take you through the developments at p.m. eastern, 10:00 p.m. pacific. continue coverage at 6:00 p.m. eastern. we will see you then. this is bloomberg. ♪

♪ >> obama cancels talks after the philippine leader says he will swear at him. saudi arabia says there is no current need for an output freeze as iran prepares to step up production. anjin sending fleets to safe boards prevent the cargo from being seized.