EP 143: Debunking Healthcare's Biggest Myths with Zach Weinberg and Derek Thompson

In this episode, Logan is joined by Zach Weinberg (Co-Founder/CEO @ Curie. Bio) and Derek Thompson (writer at The Atlantic) for a candid discussion on the state of U. S. healthcare and scientific progress. They unpack what went right, and wrong, with COVID vaccine policy, the public backlash against mRNA technology, and the ripple effects on trust in science. The conversation also dives into the real reasons behind NIH budget cuts, the economics of drug discovery, and the business incentives in medical R&D. It’s a sharp, thought-provoking look at the intersection of policy, innovation, and public perception. (00:00) Introduction to Drug Pricing in the US (00:23) Broad Healthcare Topics and Open-Ended Discussion (02:37) COVID-19 Vaccines: Successes and Public Perception (06:21) The Evolution of COVID-19 and Vaccine Efficacy (07:59) Public Policy and Vaccine Mandates (13:10) Impact of School Closures and Public Sentiment (19:23) NIH Funding and the Importance of Basic Research (25:04) Challenges in Science Funding and Public Perception (35:19) Government vs. Private Investment in Science (36:40) Operation Warp Speed: A Case Study (39:07) Antibiotic Resistance Crisis (43:22) The Drug Pricing Debate (44:05) Challenges in Drug Discovery (54:06) Regulatory Hurdles in Medical R&D (58:06) The Future of Drug Development (01:04:19) Concluding Thoughts Executive Producer: Rashad Assir Producer: Leah Clapper Mixing and editing: Justin Hrabovsky Check out Unsupervised Learning, Redpoint's AI Podcast: https://www.youtube.com/@UCUl-s_Vp-Kkk_XVyDylNwLA 🎙 Listen to the show Apple Podcasts: https://podcasts.apple.com/us/podcast/the-logan-bartlett-show/id1606770839 Spotify: https://open.spotify.com/show/5WqBqDb4br3LlyVrdqOYYb?si=3076e6c1b5c94d63&nd=1 🎥 Subscribe on YouTube: https://www.youtube.com/channel/UCugS0jD5IAdoqzjaNYzns7w?sub_confirmation=1 Follow on Socials 📸 Instagram - https://www.instagram.com/theloganbartlettshow 🐦 Twitter - https://twitter.com/loganbartshow 🎬 Clips on TikTok - https://www.tiktok.com/@theloganbartlettshow About the Show Logan Bartlett is a Software Investor at Redpoint Ventures - a Silicon Valley-based VC with $6B AUM and investments in Snowflake, DraftKings, Twilio, and Netflix. In each episode, Logan goes behind the scenes with world-class entrepreneurs and investors. If you're interested in the real inside baseball of tech, entrepreneurship, and start-up investing, tune in every Friday for new episodes.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Drug prices are very expensive in the United States like that is absolutely true. But part of the reason why we have premium drug pricing in the US is to incentivize innovation in the first place. And if you want cheap drugs now, you will get them and then you will get materially fewer drugs in the future.

• 0:21Logan Bartlett?

  I sent you guys some stuff before. I think the broad topic is healthcare. And there was a bunch of different questions that I think each one would probably take us, you know, two hours to go through in full. And so I think we probably want to keep this just largely open ended, given you guys are both

• 0:40Logan Bartlett?

  very bright about the state of,

• 0:44Logan Bartlett?

  I think, society as it relates to a lot of things in general, but then specifically, I think you've you've looked at different data around healthcare and vaccines and societal implications around that stuff. I think Derek, you seem like some of the cuts to NIH had you fired up this morning. So I'm glad I'm glad I'm catching you as you're kind of thinking about this. There was a few big buckets, but we can take it in any different direction. I think the the drug discovery, manufacturing, supply chain, all that stuff's interesting. I also think as it relates to that COVID and like what we got right with vaccines, what we got wrong, like where the misconceptions kind of are around that, because it does.

• 1:27Logan Bartlett?

  When I talk to some of my friends, it seems like some things are like irreparably broken or mistrusting now that like I can't seem to get us out of a cycle of like, you know, above board conversation around that. And then I think that might dovetail into like NIH and,

• 1:45Logan Bartlett?

  you know, where we go with some of these cuts and things like that. So that was kind of a broad level agenda. I don't know if you guys want to hit anything specific.

• 1:53Speaker 02

  No, that's great. I think, I think what I would recommend is like, I like the conversation around the mRNA vaccines and Operation Warp Speed because it's specific. And then we can like, take the reaction to the COVID vaccines and how it sort of bloomed into its own kind of movement or and really given like a lot of, I think, tailwind to like the Maha movement and vaccine skepticism. Like, that's, that's concrete. Like, questions that are like, what's the biggest problem with the healthcare system? I want to like, I could definitely answer that question. But it's like, it's so big that I want, I don't know where we, where we go necessarily, where it's like, as opposed to like, the NIH cuts are just like, specific.

• 2:35Logan Bartlett?

  Yeah, yeah. Let's do it. Well, so I'd be curious, Zach, what do you think we got right with COVID and the vaccines and Operation Warp Speed and all that stuff?

• 2:47Speaker 00

  Yeah, and I'll even try and get to where I think some of the public disconnect comes from, because I have like, one very specific opinion about this. But maybe we start with, like, the facts, which is that COVID as a, as a virus was killing a huge percentage of people. Like, I think sometimes we forget, because we were all vaccinated at this point, that about 1%, and depends on which numbers you look at, of people that were infected in kind of that first wave, died. That is a, that is a very deadly virus, right? Like, and, and obviously, it's skewed to people that were older, or out of shape, or overweight. And there's some genetic factors potentially, but, but ultimately, like, it's a pretty bad, it's a pretty bad virus.

• 3:31Speaker 00

  And it was remarkable, honestly, like, how fast human society was able to produce a effective vaccine that stopped people from dying, and in many cases, even stopped, you know, hospitalization for almost everybody in the world. And we got very lucky, I think we forget this, that like, this mRNA technology that both the Pfizer and Moderna vaccines are based on existed, because it was not, it was almost a failed technology, interestingly, because it was originally developed with the theory that you would use it as a, as a drug. It was meant to be for treating disease, not for preventing, you know, viral infections.

• 4:14Speaker 00

  And actually, one of the biggest issues with these mRNA as a technology was like the immune system reaction to it. And so we got super lucky that like somebody had funded it as a treatment. And then this, you know, pandemic shows up and we're like, oh, wait a minute. We could actually use this to activate the immune system, which is what you want in a vaccine. And if you remember, when we ran these first set of clinical trials, the mRNA vaccines, the Pfizer and Moderna ones, performed better than the AstraZeneca one, which was based on a more classic, older technology. And so, you know, not only did we get a vaccine really fast, we actually got one that worked really, really well. And, and I think like somehow we forgot that we basically saved, you know, probably

• 4:56Speaker 00

  a few hundred million lives by, by doing this, plus the extreme cost.

• 5:02Speaker 02

  The estimates, the estimates from Imperial College are closer to like five to 10 million, I believe, just don't want to make sure that we, it's not as opposed to hundreds of millions, but it's definitely in the millions.

• 5:13Speaker 00

  Yeah, in the millions. Maybe I'm doing my math wrong, but oh yeah, I guess if you have like four or five billion people or so. Regardless, you're saving tons of lives and it's good catch, by the way.

• 5:26Speaker 00

  I think where the, the initial like issues came from is if you look at the first batch of COVID vaccines and when they ran the initial clinical trials, it was interesting actually because my wife was on one of the trials. These were placebo controlled trials. I want to be really clear, like you had, some people got the vaccine, some people didn't, and you looked at prevention of essentially infection and disease. The initial version of these vaccines did prevent transmission. Like the first version of that did prevent transmission. And so the logic of if you vaccinate the entire population, you reduce the overall burden of disease was accurate when it first came out because that actually, that, you

• 6:10Speaker 00

  know, if I get it and I don't spread it, it reduces spread. And so the idea of like mandating vaccines actually made a lot of sense based on the initial clinical study data. We got that right.

• 6:21Speaker 00

  And then what happened is COVID mutated. And if you go back and you remember this, remember we had all these like different variants that showed up. We'd like the Delta variant and all these different future variants. And what you found incrementally is that the new COVID variants escaped some of the efficacy of these vaccines. And in particular, the transmission piece of it. Right? So you were still essentially like shedding the virus and you could infect other people. But you were protected in a very serious way from getting hospitalized and dying. So like the core piece of what a vaccine is supposed to do, which is like prevent you from dying, was still effective and still is effective to this day, by the way, which is incredible. But the transmission piece kind of like escaped, if you will, the, you know, these are viruses that mutate based on pressure.

• 7:05Speaker 00

  And so there you go. And we didn't change the nomenclature and the wording and the phrasing we were using about the utility of these vaccines. We kept going back to like prevent transmission. And that's not what they were for at that point in time. And so the mandates, I think, mattered materially less. Like they started correctly. Like I think the science behind the mandates makes a lot of sense when you prevent transmission. And then future variants escaped that transmission. And so like the mandate doesn't make any sense and we didn't change our policy. And eventually people realized that like it's still, you're still transmitting this virus even though you're vaccinated. It's like, why are you, you know, now it becomes more of a personal choice rather than a society choice thing. And I actually think in a way, those people are right. Like if the vaccine doesn't prevent transmission, take the risk, man.

• 7:50Speaker 00

  Like, you know, go for it. And there's one little nuance about healthcare costs. Cause like if you show up in the hospital, like we're paying for it. We can have that debate separately. And, and I think that's where this whole thing got lost was basically like a correct scientific decision in the beginning that should have been unwound. Once we knew the new variants were no longer being prevented from transmission from the vaccines. And we didn't change that policy and we lost public. Not support, but just like opinion in a subset of people because of it. That's really my take, like, good and then it went bad.

• 8:24Speaker 02

  I gotta be honest, it's been a long, long time since I heard a COVID take that I've considered so right in so many different ways. Because you appreciate in that answer, something that I think is lost amongst so many people on the far ends of this debate, which is that the virus changed, reality on the ground changed. And so if you were just reading the initial population reports and the clinical trials, the COVID vaccine in late 2020, early 2021, it really did seem for a moment like it was blocking transmission. In which case, the mandate justification is so powerfully strong because the state has an interest in ensuring that spread stops.

• 9:09Speaker 02

  But once it becomes essentially a really powerful tool for reducing by about an order of magnitude, the individual's risk of getting, of being hospitalized or dying. The promise changes, and therefore I think either the policy has to change, or at least the explanation of the policy has to change, and neither did. And a lot of people got upset about that. And I think that in many ways, frustration with the COVID mandates has become, or has bled into skepticism about the COVID vaccines themselves, which has thus bled into skepticism about mRNA technology itself, which has also advanced skepticism about the entire scientific enterprise.

• 9:50Speaker 02

  And that, to me, is one of the huge tragedies of Maha right now, the Make America Healthy Again movement, or just MAGA health, MAGA science skepticism, is that frustration with public policy choices relating to mandates or school closures has fallen down the slippery slope and collapsed into a pile of nonsense when it comes to attitudes toward science investments. And so I think it's just really, really important for folks to say, if this is what they think, and I think it is true, that it is simultaneously possible that various Democrats made mistakes in terms of...

• 10:30Speaker 02

  Policy, but that has nothing to do with the degree to which we should fund synthetic mRNA science in other fields that might turn out to be as promising as it turned out to be for the coronavirus. And again, according to Imperial College, it saved, I think, if I recall, between five and 10 million lives worldwide, just the synthetic mRNA vaccines themselves. So I do think that like, someone 40 years from now, who picks up a history book, or whatever, asks, you know, GPT-11 to explain them, you know, 2010s, 2020s, American history, is going to be very confused about the fact that Donald Trump was president when Operation Warp Speed was created, that Donald Trump essentially

• 11:12Speaker 02

  authorized Operation Warp Speed, but that the movement behind him polarized not only against the success of that policy, but about like, the entire system that is required, the scientific system that is required to make a policy like this possible. Synthetic mRNA vaccines would not have existed, or would not have been possible in 2020, if people like Katalin Karakow hadn't been working on them for years, if not decades. It was a really, really deep scientific enterprise that made companies like Beyond Tech and Moderna, Beyond Tech being the company that I believe like made the fundamental vaccine recipe with Pfizer. The Pfizer one. Yeah. That work took so long. And when you look at what we're doing right now to

• 11:56Speaker 02

  science, the president's budget calls for 40% cuts, roughly, to the National Institutes of Health, 50% cuts to the National Science Foundation. I mean, you are just burning, you're just torching your ability to produce scientific breakthroughs. And we're not going to know what breakthroughs we're losing tomorrow. Like, by its nature, science takes a long time, but it's a little bit like refusing to do updates in the house that you know has a termite problem. If you don't do the updates in the house with a termite problem, you're not going to learn that you made a mistake tomorrow. The house is going to start to fall down in five years, and you can trace it back to that decision to not invest in the foundation. But there really is a profound, to me, like, a sociologically profoundly

• 12:40Speaker 02

  interesting fact, that the person responsible for Operation Warp Speed, which might be the most successful

• 12:47Speaker 02

  Medical policy program, just from like a lives saved standpoint. And maybe like one of the most successful, like from like an effective altruism standpoints, like dollars in to lives out programs like in American history. That the movement behind that guy is now against the very object of success that that program created. It's really, really astonishing.

• 13:10Speaker 00

  The school closure thing, by the way, which I didn't touch on, I think was also like a massive mistake.

• 13:15Logan Bartlett?

  Yeah.

• 13:15Speaker 02

  One quick thing on school closure, this will be really, really quick. I think the school, I think the length of school closures was absolutely a mistake. I do think that people who wave away Republican excess by saying, well, none of this would have happened if Democrats didn't go overboard and shut down the schools for a year and a half. I would ask them to go back and look at public polling about school closures in 2020 and 2021. In many cases, and this really surprised me, it's parents who wanted the schools to be closed. Now, as the parent of a 20 month year, month old, I cannot imagine having that position.

• 13:57Speaker 02

  Like when my like Jewish day school is out for a week for like Passover or something and we have to fully do childcare, I'm like, Jesus fucking Christ, like, how are we spending a week on Passover? Like, please get this child back in daycare. So it's that outcome surprises me, but people need to go back and remember just how scared people were. And they, in many cases, wanted schools to be closed much longer than I think was sort of epidemiologically defensible.

• 14:24Logan Bartlett?

  I guess I'm curious, I mean, we sort of talked about like what we got right and it's unusual that that no one can campaign. I know, Derek, you talk about this in your book, that no one takes credit for Operation Warp Speed and its efficacy at this point, which is is kind of a wild fact of history. I'm curious how you guys think about like beyond the transmission and not evolving the nomenclature, like, are there other things that you point to that you feel like we got wrong in this process in hindsight that sort of led to this distrust of institutions and therefore what's been pretty draconian cuts to NIH?

• 15:06Speaker 00

  Well, I think, I mean, one other, one other angle here that I think is sometimes hard to, to, to argue for, but I'll give you like another argument for why mandates can still be reasonable. Um, especially when you deal with a, a virus that affects kind of like older people by nature. Um, which is like people over 65 in the United States are on Medicare. Right? So the vast majority of people, uh, we as the taxpayer are on the hook for their healthcare. And I think, by the way, that's not necessarily a fact. Most people understand that like some percentage of your tax dollars are essentially being the insurance company for people 65 and older. Uh, which is a good thing. It's great that we can offer this, but, but we are on the hook.

• 15:49Speaker 00

  Uh, if you're unvaccinated and you get COVID, but you don't die, but you still go to the hospital. You still get, you know, into the inpatient setting, you're dealing with like hospitalizations and kind of the subsequent costs associated with it. We're paying for it. And so there is still a cost to society. It's not transmission at that point in time. But like your tax dollars and my tax dollars are paying for the people 65 and older who get hospitalized, who are unvaccinated. And so while I agree, generally speaking, like you have the choice of what to do if it's a truly an individual decision.

• 16:30Speaker 00

  I'm not still, is it really an individual decision if you rely on the American taxpayer as your backstop insurance provider? For all the downstream things that happen to you. And so I do think you could make the argument that mandates still make sense from a taxpayer perspective. And it's a very Republican thing, by the way, to be like, ah, I'm paying for this. Like, you know, we need to get something in return. Um, I think we lost that debate as well. It got, it got lost in the abyss of like, you know, it's America, freedom, decisions, all these things that don't really have like deeper, deeper meaning and. Yeah, it's been, it's, it's, it's a real disaster, honestly, just like the messaging.

• 17:07Logan Bartlett?

  Doesn't that stuff always come up, though, when, I mean, I think about drunk driving back in the day and you go see those videos and people are like, you know, who's going to stop me from getting behind the wheel after I've had a couple of years?

• 17:18Speaker 00

  Well, that, that's, that one, you have like clear external harm, obviously, you know?

• 17:22Logan Bartlett?

  No, but I mean, I, and so I'm taking it, I think that's the furthest extreme of it, I think, uh, is like someone's making that point and it seems like there's always this, what you said is intellectually true, but the psychology of it is never going to resonate with the individual in some ways. I just think it's, we can't do collective action in a meaningful way for any extended period of time. I know we did it in World War II when we had like a major adversary we were going after and there was that like couple of weeks after nine 11 that everyone was on the same page, but I think it's really hard to get people to buy into a collective benefit to society at large.

• 18:02Speaker 00

  Well, look, like collective, collective benefit, and we should, I mean, we can talk about vaccines for a while, but, and all the issues that, you know, RFK has in his beliefs of like, by the way, like the entire autism, COVID, not COVID vaccine link that everybody keeps talking about as if it's a real thing, is based on a fraudulent 1998 study by this guy Andrew Wakefield.

• 18:24Logan Bartlett?

  Retracted.

• 18:24Speaker 00

  Retracted, 100%, 100%. This is one dude who, in my opinion, should be in jail, uh, because of the harm he's caused. He, it had 12 participants in 1998 and he basically fraudently created the data. Like that is the, that is the base. We don't talk about the fact this was like one asshole with 12 people. Uh, and by the way, like thimerosal, which is like this preservative that they all bitch about, which was once used in, in, in vaccines, it was removed in 2001. We don't even use it anymore. And so like, if you just like trace all the underlying arguments of this stuff, it's all based in basically fake, fake information, like truly debunked science and, and, and people. I will say, the harm

• 19:09Speaker 00

  that that does in terms of getting, you know, support for scientific research. And Derek, to your point of like, you know, you don't know what you're missing out on because, you know, it takes decades for this stuff to play out, you know, on the NIH front, which obviously I think we're getting wrong. There's this one really important fact, and I talked about it on some other podcasts that I think people don't realize, which is if you think about making a drug for some disease, it's really, it's a multi-step process, but to try and like overly simplify it, there is the biology of it, which is basically like, what in the human body is happening that is causing this disease in the first place?

• 19:51Speaker 00

  It's not the, it's not the making of the drug part, but it's, it's the driver of disease. And biology research, right? What causes Alzheimer's? What causes dementia? What causes this cancer? So on and so forth. That is not patentable science. You cannot patent biology, meaning if I discover like the true cause of Alzheimer's, I cannot really profit from that discovery. We do not allow patenting of biology. And there's some good reasons why we don't do this, which means biology research is not fundable by the private market. You can't do it. There's no math. Very, I mean, there are a few clear little exceptions here and there, but like to do, to, to figure out what is causing disease in most cases is a public good

• 20:35Speaker 00

  that has to be driven by government, because even if you figure this out, you, you can't protect your invention. And so private business will never fund it. Downstream drug discovery, right? Of like, okay, how do I actually drug the thing that we found? That obviously is patentable and we have proper incentives and we can talk about that. What people don't realize is the NIH isn't funding drug discovery. The NIH is funding biology. It's funding research to figure out what causes disease in the first place. And if you don't fund that research, there's no ability to make a drug in downstream of it. It doesn't work, right? And I just go back to like, and I'll be quiet, but like the Alzheimer's and dementia use case, because it's very tangible for people.

• 21:19Speaker 00

  We don't know what causes either of those diseases. We have no idea. I mean, we have some ideas of like what shows up in the brain in terms of, you know, tau, for example, but is that really causing it? We're so far from understanding what causes these like major neurological conditions. And so, which means we're so far from drugging them successfully. And if you pull funding from the NIH that eventually, basically, you know, you could tie to like biology research and neuro and Alzheimer's dementia, we're never going to drug these things. And that, people just assume like, ah, pharma will solve it. But like, no, pharma, you cannot fund that research with private money because you can't patent it. There is no business model. And that, obviously, the administration does not understand. And that's my big fear when you think about these NIH cuts.

• 22:04Speaker 00

  It's like, what we're actually cutting is understanding disease. And that's a problem.

• 22:11Speaker 02

  Yeah, understanding disease and also understanding biology that can sometimes be used to cure disease in ways that aren't necessarily linear. Like sometimes biology works its way into the drug pipeline in a very linear way. Like the classic example these days is the GLP-1 category where there were scientists that were interested in the Gila monster and they synthesized the Gila monster's venom and they realized there was something in the venom that essentially was suppressing appetite and regulating insulin. They turned it into a type 2 diabetes medication. Then during clinical trials, they realized that people who were in the intervention groups in those type 2 diabetes trials were losing a ton of weight. They then did trials on weight loss, yada, yada, yada.

• 22:52Speaker 02

  You now have a weight loss revolutionary drug that turns out to also do a shit ton of other things. It seems like it's effective for body wide inflammation and for that reason could have effects and seems to have effects in cardiovascular disease and dementia, on a host of things. So that, that feels very linear. Like you found a mystery in biology, you synthesized it, it did a thing, you built on it, you, you created an entire drug category that's doing a lot of good for the world, I think. Sometimes, and this is a story from my book that I, that I love, and I'm just going to just, just to read, just to share it here. The work that the NIH uncovers is used in very indirect ways that are nonetheless extraordinary. So like the most popular COVID tests relied on a technology called polymerase chain reaction.

• 23:36Speaker 02

  It was developed in the 1980s. PCR is a method for amplifying small DNA sequences that can be used for anything from paternity tests to a bunch of disease diagnoses. And when scientists were originally trying to figure out how to scale PCR, they needed very specific bacterial enzymes that didn't fail at high temperatures. Unfortunately, this is the 1980s, they realized that two decades before that, 1960s, a totally different team of biologists went to Yellowstone National Park and isolated in hot springs bacteria that thrived in boiling conditions. And so they took that bacteria, they incorporated it into PCR research, and then they launched

• 24:19Speaker 02

  a revolution in diagnostics and genetics, like a ton of genetics testing, I don't think is even possible without PCR. So what's really cool about this project is like, if you were going to develop a medical test, whether it's for genetics to determine if you're suffering from COVID, no one would ever fucking think, well, the first thing we have to do is to book a flight to Yellowstone and, you know, take some samples from some geysers, because that's really what's going to be critical work in the, you know, pipeline of building this particular test. No way. But that's how science works. It's like you build this base of knowledge, and then once you have that base of knowledge, it never goes away. Everything you discovered is discovered forever. That's like the magic of science. And so now you can take this bed of knowledge, you can build on it.

• 25:04Speaker 02

  And so the fact that we just like want to burn the bed because we're mad about COVID mandates and school closures and a bunch of policy decisions that frankly have nothing substantively to do with what biologists can discover tomorrow that can help create a drug in 10 years, it's completely mind boggling. And it's really been disappointing for me because I have no faith that RFK Jr. is going to be an efficient steward of non-insane healthcare policy. But there's people at NIH, like Jay Bhattacharya, I've read like dozens of his papers. This is like, I've emailed with him, I've talked to him about his papers. This is like a really smart guy, I think.

• 25:48Speaker 02

  And I cannot believe how

• 25:53Speaker 02

  The smart folks at HHS are being totally overrun and overwhelmed by frankly, just like the anti-tech conspiracy theorists who are in charge of this wing of government. Like, I would defy folks who have sympathy for RFK's views to find me a technology invented since, let's say, penicillin that he thinks is a good idea. This guy was against nuclear power. He thinks Wi-Fi is giving us brain cancer. He's against broadband technology. He's against basically like every single medical therapy that's been invented in the last 40 years. He's highly attuned to the possibility that it might hurt 0.5% or has some effect in

• 26:36Speaker 02

  0.5% of its population without any real sense of what happens to the world if we simply don't develop the therapies. Right? So he's biased for, his pessimism is biased towards seeing the fault in technology that he doesn't see in questions that we can't solve with medical technology. And it's just been fundamentally depressing to hold out a little bit of hope that some of these really smart people could, could sort of stem the tide of nonsense at HHS. And it looks to me, unfortunately, like they're utterly failing.

• 27:08Logan Bartlett?

  The hard part about this, and Derek, you and I went back and forth, or I replied to one of your tweets about this, is there's, there's almost like this, I don't know the right phrasing for it, maybe you have like a, some sociological term for it. I was kind of using like a gelman amnesia effect of this where the concept that like when something in the news you know well gets reported, you find all the inaccuracies. But when something that you don't know about gets reported, you just take it as at face value. And it's almost like with RFK and all this stuff, it's like when there's all these clinical trials and humans and all this, we're nitpicking all the little problems with it.

• 27:50Logan Bartlett?

  And then we point to this ethereal thing that has no data or, you know, is very amorphic in nature and like that might be the solve. And it's like, it's a really hard way of debating because... You end up mired in the details of the thing that you're supporting and defending versus you can't attack this amorphic thing that there's no actual evidence really to support, or if it does, is, it's really ethereal. And so it's hard to engage. But I guess if I were to steel man, like the NIH funding cuts, because people are listening to us, you know, left-leaning, progressive growth, you know, whatever. I don't know the right terminology that that we would probably fall under.

• 28:30Speaker 00

  You can say the word abundance. It's fine. I'm not gonna stop you.

• 28:33Logan Bartlett?

  Yeah, yeah. Abund- are you saying abundance Democrats, or are we?

• 28:38Speaker 00

  Abundance people, abundance people. There's nothing to be Democrats.

• 28:41Logan Bartlett?

  Yeah, yeah, that's fair. I guess, I mean, the criticisms seem to be that it's been super wasteful. And so they're reducing the budget by 18 billion to about 27 billion. And so it's still a significant amount of money in mass. And that, I think the criticisms have been around wasteful spending and promotion of dangerous ideologies. And I think as I was kind of unpacking it, it seems like there was a grant to an organization called Eco Health Alliance, which collaborated with the Wuhan Institute on Virology, which was one. And then there's some research related to topics like gender identity and climate change, which the administration has deemed politically motivated. I think that's the steel man of it. I don't know. I mean, you guys help me out here.

• 29:26Speaker 00

  I, look, I think like, this is a classic, I mean, this is just like politicians on both sides. It's like, identify the problem and propose the absolute wrong solution. I don't think the argument that like, the NIH is wasteful is wrong. Like, there's plenty of things you could point to in how they think about grant reviews and who does those grant reviews, the overhead question, which is, we can talk about of like, how the universities tend to skim like, a really large percentage of the grants, funding some really stupid things that they shouldn't be funding here and there. Like, absolutely. Like, reform is a great idea. I think it's one of those kind of industries, or not industries, like agencies where no one's really taken like, a critical eye. And I think Jay, the new

• 30:11Speaker 00

  guy running it, seems like a great reformer. But reform it within the existing budget. Cutting the budget is just cutting science, right? Like, what we'd be better off doing is saying, hey, we could be getting more for our 40 billion or whatnot. And instead of just saying, like, actually, we're going to chop 40% of it, like, reform rather than cut. And no, obviously, we decide like, ah, we're just going to cut it because we're mad at some, like, diversity study. And like, you could show up and cut the diversity research if you want, but then keep the money and use it for biology research and cancer and Alzheimer's and all these things. Like, yes, maybe the mission creep has gotten in there. So there's a reasonable steel man, but the answer should be reform, not budget cuts.

• 30:54Speaker 02

  I think it's important for people to understand the level of care that's being used to do these NIH cuts. So there was a story that the Journal of Science reported on where the NIH announced that they were going to cut 80% of the largest longitudinal study for women's health that has ever existed. I believe it's called the Women's Health Initiative. And the first people were just like, what are you, what are you doing? Like, this is the exact sort of study that you said you wanted more of. It's about understanding the root causes of chronic disease

• 31:36Speaker 02

  and figuring out how we can make menopause more comfortable for hundreds of billions of women going into the future in this country and every other. Why would you cut this? So, science in the New York Times calls the NIH, contacts the NIH, and says, you do realize you cut 80% of the largest longitudinal women's study in American history. Forty-eight hours later, they reverse the cuts. And then RFK goes, he either went on Twitter to say this, or he said it to a reporter, said, We haven't cut this program anymore. And the New York Times and Science Journal were lying about the idea that we were cutting it in the first place.

• 32:19Speaker 02

  The quotes from the NIH spokesperson are right there. Like, we're going to look into these cuts. Now we reverse the cuts. And then RFK comes in and says the cuts weren't even happening in the first place. This is the level of honesty and care that is being used to cut $18 billion worth of science. And by the way, it's of a piece with the level, I think, of honesty and care that's being used to cut just about everything across government with Doge. I mean, this is an administration that, in order to turn the Department of Energy into something that was more focused on nuclear security, accidentally fired half the people who work in the only administration in DOE that has the words "nuclear security" in it.

• 33:00Speaker 02

  They're just slashing and burning and then asking questions later and acting affronted when anyone points out that they're going way too fast and not operating with any kind of care for A-plus excellence in their efforts to reform some things that do truly need reform. So there is this, like, parallel world where I would be so optimistic that folks like Jay, whom I want to be clear, I've had nothing but polite and frankly, like, quite interesting conversations with in my history as a economic and science reporter. I want to believe in a world where these folks are going to cut $18 billion worth of science funding and find the exact, right, $18 billion worth of science to cut. But let's be honest.

• 33:45Speaker 02

  Think about this from the perspective of, like, a VC. What percent of VC investments actually, like, pay out? 10, 15% if you're doing a great job, 20? The response from the LPs can't be, "Hey, Andreessen Horowitz, we realized that 80% of your investments failed, so how about this? We're going to give you 80% less money, just quintuple the efficiency with which you invest." It's a bullshit way of thinking about any kind of high-risk, high-reward strategy. And when you're thinking and when you're dealing with the process of discovery, whether it's in science or technology, you simply are taking on the not just risk of but inevitability of enormous amounts of failure. Because the few things that you put your money on are going to have returns

• 34:30Speaker 02

  that make the whole thing worth it. And there is in fact, research showing that because of the enormous returns of understanding basic facts about biology, basic research science is one of the highest, most efficient forms of government spending that exists. So this story is like really, really important to science. It's important to me, but I really do urge people to think about the degree to which it's illustrative of a broader philosophy in government right now, which is, I think Zach said it perfectly. The correct observation that there's something imperfect in government, followed by a profoundly imperfect and even destructive solution.

• 35:09Speaker 00

  There's actually this really interesting paper, I wish I had it, that talks about in biology in particular, just like NIH funding, this like crowd in effect.

• 35:18Speaker 02

  Yeah.

• 35:19Speaker 00

  So what are the downsides of government spending is like it takes the place of efficient private investment and you get worse outcomes because the government is like materially worse at allocating money versus the market. And that's true in a lot of settings. Part of why maybe in certain places Derek and I probably don't agree about like what the government should be doing. In science, there's this notion of crowding in actually, which is like where you see more government investment in basic research, you actually tend to see the private investment follow. Because what happens, and it's not rocket science, right? It's just like the government funding chases things that private wouldn't. It finds interesting nuggets of science. Biology is usually the best example. And then the private investment follows behind it to say, oh, shoot,

• 36:01Speaker 00

  now that we learned this thing about disease or about biology, now we're ready to fund what comes downstream of that, which is like the medicine, right? Like the drug discovery parts of it. There's actually a really effective taxpayer dollar. I would bet it pays back. I mean, you'd have to trace the dollars, but I would bet you it pays back in spades on just like investment in the United States. None of this logic is being, you know, considered, obviously, by the folks in charge. And, you know, this is, this is what we get for electing angry people with, with no real ideals underneath them. They're just angry, you know, just pissed and make bad decisions.

• 36:37Speaker 02

  Ironically, you know, was one of the greatest crowd in sort of policy architectures the last few years is Operation Warp Speed. Operation Warp Speed had a pull funding where they said, if you make a vaccine that passes these criteria, this level of efficacy in phase three clinical trials, et cetera, we will give you billions of dollars to buy a ton of your vaccines. And the reason that was so important, rather than just what's called push funding, which is just, oh, you're Moderna, I'll cut you a check for $500 million, good luck with the money, is that, let's say that, you know, you, Logan, Derek, Zach, Jay Bhattacharya, all these people, we're all running pharma companies in 2020, trying

• 37:20Speaker 02

  to build a COVID vaccine. If I'm a little bit worried that Logan and Zach are ahead of me right now in the pharma pipeline, I might pull back my investment by thinking, wait, if Logan and Zach beat me to market, and I'm like the third or fourth COVID vaccine, then I'm not going to make any money on this vaccine. No one's going to take my vaccine. So I'm going to pull back on my investment. But if the federal government is guaranteeing me the same $5 billion it's guaranteeing to Logan and Zach, I'm going to have pedaled a medal on this vaccine development process. And I'm going to, you know, maybe find other investors who can pull in money as well. So it has like, I think, the way that sort of pull funding mechanisms can work, in addition to push funding mechanisms like simple NIH grants, is a really beautiful way of government reconceiving its relationship

• 38:04Speaker 02

  to invention. And this is the kind of thinking that I was like, hopeful we might get, like, I'm not a Republican, but like, I was like, there are smart Republican tech people who are flying to Washington. And I know that they know a lot about how to use markets to create products that don't exist yet. And wouldn't it be cool if you took all this NIH spending, which is push funding, here's scientist, here's an R1 grant, you know, a couple hundred thousand, millions of dollars, you're offered four or five years to do your thing, with pull funding, if you build this miracle drug for Alzheimer's, let's say, we will give you $10 billion, even if you're the 10th company to build it, now everyone get in and take in a bunch of money from, from private banks, and build some miracle

• 38:48Speaker 02

  vaccine, or some miracle drug in Alzheimer's, I was hoping we were going to get more of that. And instead, you know, we didn't get, it seems like we're not getting anything on the building side. We're getting everything on the destruction side.

• 38:59Speaker 00

  It's this concept of like, having a guaranteed customer on the other side.

• 39:03Speaker 02

  Exactly. Yeah, it's demand uncertainty. Yeah.

• 39:07Speaker 00

  Yeah, yeah, yeah. We actually have this issue. And it's what's crazy to me is we, people have known about this issue for 15 years, which is in antibiotic resistant bacteria, essentially, where you've got a mark, the mark, there is no market for new antibiotics, which I don't think most people realize, but like, there's almost no way to get paid to develop a new antibiotic. And it has to do with the way we reimburse for use of antibiotics in the inpatient setting, meaning once you're hospitalized. And we don't have to go into all the nuance of it, but essentially, like, there, the, the hospital gets paid kind

• 39:47Speaker 00

  of like a fixed rate for certain hospitalizations. And if you add more drugs into the cost structure, like the hospital eats some of the costs. So they don't really have an incentive to use these new antibiotics. Therefore, there's no real customer for them. They also won't buy ahead, right? So they won't buy in stockpile because it's too expensive. And so basically, like, there's no guaranteed market for antibiotic resistant bacteria, like for new antibiotics, that's the best way of saying it. And, and by the way, this is a major, major killer of Americans, right? At a certain point, like, you get some sort of, you know, of bacterial infection, the existing antibiotics we have don't work, or you've seen them before and your body has developed persistent, resistance, and you die in the hospital of a really nasty infection, essentially. And like, this kills tens of thousands of Americans. And it's

• 40:32Speaker 00

  super well known. And the reason nobody funds this kind of research is there's no, there's no customer on the other side that you can bank on. Perfect spot for like, another Operation Warp Speed style model, which is to say, okay, here's what we're going to do. United States government is going to be a guaranteed buyer. Yeah. Of your next antibiotic, we'll stockpile and then we'll distribute out to the hospitals as needed. But you need that guaranteed buyer or nobody is going to fund the underlying drug discovery. The, the amount of money that goes into new antibiotic discovery in the United States is like basically zero. It's, it's, it's really sad and like, it doesn't matter. Let me tell you, you get a bacterial infection, it doesn't matter if you're Jeff Bezos.

• 41:16Speaker 00

  Uh, or the guy on the street, like you're going to die from this thing. If we don't have proper antibiotics, there is no like safety option that you can throw money at, at that point in time. And it's just like another example of like, we know these, these gaps exist in, in, in scientific funding. And for whatever reason, like cannot get the government to act in, in, in like an intelligent way. Cause it gets lost in whatever other healthcare reform. There's multiple examples of this where just like, you need the government as a customer. And to, to your, your, your version of Paul. By the way, another great way of incentivizing people to like build something that works rather than just like spend the money on, you know, hand, like essentially giving government handouts. If you pay for the actual product on the other side of it, like there's a real incentive and then let the markets work behind it.

• 42:01Speaker 00

  But yeah, we're not getting any of this, we're getting this and Trump coin. So it's great.

• 42:07Logan Bartlett?

  I mean, if we were to try to figure out why this area has been cut. And we've talked about the implications, but there's the time horizon point of this, right? Which is, which is hard. Uh, it's totally kicking the can. Investing in this is kicking the can on the, down the road of the problems that might, uh, come up from it or might save, stave off. And versus going in, and it's a kind of a rounding error of the overall budget in the grand scheme of things, right? $18 billion on a whatever, what is it 35 trillion dollar budget? Uh, it's just, no one wants to go after the entitlement spending that actually causes the problems for the, the budget and trying to find different reforms around it. Uh, and so this, you know, we, we have these weird things that no one really advocates for in a meaningful way and they get.

• 42:52Logan Bartlett?

  conflated with a bunch of ideologies and stuff. And so it just ends up getting cut. It's a shame because we will never know the counterfactual of what would have happened otherwise, right? We can sit here and complain about it and be like, oh, this is such a shame. And you know what? In 10 years, no one's gonna know what the path not taken would have been. And when the next pandemic or whatever it is comes up and we don't have the drug, who's to say we would have had it back then if this had been kept up, which makes all the incentives really difficult to invest behind this and keep it going.

• 43:22Speaker 00

  Well, this is also, this is the drug pricing argument, right? It's the same underlying.

• 43:27Logan Bartlett?

  Maybe unpack that. Yeah. Give, give the overview, I guess, or a little primer on that.

• 43:32Speaker 00

  Yeah. I mean, it looked like I've, I've been in on all sides of this, right? Both as, as a startup, it's a, I worked at pharma when they bought my last company. Now we fund early science. So I've kind of like seen all pieces of this. And it's the same idea of if the reward on the other side for taking risk is not big enough, you simply don't take the risk in the first place, right? And like that applies, that's not just like a drug discovery thing, right? Like that applies in, in, in almost every context.

• 44:02Logan Bartlett?

  Venture, you know, anything.

• 44:05Speaker 00

  Absolutely. And one of the challenges in, in, in drug discovery is simply it mostly doesn't work. It is absurdly complicated to go from, I have an idea for a potential future drug and actually getting through all the layers of complexity of testing and just optimization of the actual drug itself to get something to market that actually works. And so if the reward on the other side is not big enough, it doesn't get funded in the first place because, you know, as an investor, you do these expected value calculations, like we do them at Curie Bio. Absolutely. We look at the number of patients. We look at the chances of success. We look at the potential pricing on the other side of it.

• 44:49Speaker 00

  We do all the math and we make sure that based on what we think is the chance of success of this, of this happening, whether to write the check in the first place. And so we have this giant debate about drug pricing, right? Because drug prices are very expensive in the United States. Like, that is absolutely true. But part of the reason why we have premium drug pricing in the U.S. is to incentivize innovation in the first place. And if you want cheap drugs now, you will get them. And then you will get materially fewer drugs in the future. I kind of think of it as like, are you comfortable knowing that basically all the medicine that's ever going to exist, exists right now or is in the pipeline?

• 45:30Speaker 00

  Because if you materially drop pricing, people are simply not going to invest in the first place. And this is the debate because it's somewhat of an ethics question of like, how do you think about investing in the future versus investing now? And so drug pricing can get really, really contentious because people are on the hook for decent numbers. But it is what drives innovation, right? High drug prices are what drive people to invest in this in the first place. And that is the trade that we are making. I would also mention drugs as a category. Think pills and injections and all the small molecules, antibodies. They go generic.

• 46:11Speaker 00

  So when you pay very high prices today, you are only paying them for a subset of the overall time, think like eight to 12 years roughly. And then you get them and your kids and the future kids get it essentially for free. All right. So there is a giant downstream reward in drugs. You know what doesn't go generic? Hospitals, doctors, right? Surgeons don't go generic. Like, we don't have a generic surgeon doing knee replacements and hip replacements. And we argue about drug pricing because it's very cute and you see it. But actually, as a percentage of the premium dollar, like, meaning like for every dollar we invest in healthcare, like, basically less than a dime of every dollar actually goes to medicine. The rest is going to the doctors.

• 46:55Speaker 00

  And so like, we talk about the drugs as like this big problem, but actually like, it's a beautiful incentive to make new things that eventually get really, really cheap. And all the stuff that where the healthcare costs actually really go, which is to the physicians, that just kind of continues to go up and up and up. And all of this nuance, I think, just gets lost in what is a very emotional debate of like, why is this, you know, therapy I'm trying to go on costing me a few thousand bucks to get on it? And this is why. It's like, you know, that's what got it there in the first place.

• 47:23Logan Bartlett?

  Zach, what do you say to people about subsidizing the rest of the world with our innovation?

• 47:30Speaker 00

  We do.

• 47:31Logan Bartlett?

  Yeah.

• 47:31Speaker 00

  We absolutely do.

• 47:32Logan Bartlett?

  It's just the cost.

• 47:33Speaker 00

  This is my same like Trump gets the problem right and then he gets the solution wrong. He's always like, the Europeans are freeloaded on American innovation in biotech. Like, yeah, yes, they absolutely are. You know, we pay a premium as the United States. That is what drives the investment and the incentive in the first place. Like, on a typical drug, the United States is likely to be 50, sometimes 60% of like all global revenue for that drug. So it's really driven by the United States and then kind of see like a little bit in Japan and Europe kind of tax, tax line. And what the Europeans do is they basically say, we're going to negotiate like collectively for the whole country and we're only willing to pay a certain price.

• 48:16Speaker 00

  But because as a pharmaceutical company, you've already like spent all this money on R and D and so now you're just trying to like each, you know, get every dollar you possibly can. Eventually you kind of cave to the Europeans. You're like, fine, because it's all incremental margin at that point in time. And really the thing that funded it was the United States. So it's very true, like the Europeans freeload on, on what we do. Now, if the idea is like, hey, let's bring US pricing down to what the Europeans pay, congratulations, what you've now gotten are no new drugs. Like, that's it. Drugs will not be invented because like nobody is going to take this insane risk for a very low price. I mean, if I, at some point, we should, we should do a longer.

• 48:56Speaker 02

  Zach, do you support, do you support Trump the same way that he's like, you know, sending J D Vance to Germany to be like, you guys need to spend more on military because it's absurd that, that America spends a trillion dollars to create sort of like a military, a shell over Europe rather than Europe investing in its own defense? Is this a, is this something that you think the Trump administration should do for pharma?

• 49:19Speaker 00

  Yes, I do. I do because it will incentivize even more innovation. And it's unfair to the American taxpayer that the Europeans can basically free ride on the fact that the United States is incredibly rich country, which sometimes I think we forget. And as a result, we're the ones driving all this innovation. They don't pay enough. Now, the tactics for doing that, I'm not sure. Hopefully, a very smart person could figure out like how we kind of like hold them hostage and threaten them a little bit. Maybe we like ban exports if you don't pay enough or something along those lines. Like, hey, if you want to sell your pharmaceutical product in the United States, you cannot sell it in Europe unless the Europeans pay like, you know, whatever, 20% off of what we pay. There's little things like that I'm sure you could do.

• 50:05Speaker 00

  But yeah, it's absolutely, it's absolutely true and they know it too, right? Also, by the way, access to medicine in Europe is materially worse than it is in the US because of this. Because they take their time, right? And they slow down the conversations. And so we have stuff as a patient in the US, we have drugs available here that Europeans don't get for sometimes years behind us. Like, it's not, the access is really poor. Again, right problem, like he does get it right in the sense that like they are freeloaded. I just, the solution is to pull them up, not to pull us down. If you pull them up, things are good. If you pull us down, you know, that disease that you're worried about getting in 10 to 20 years is not going to get solved.

• 50:44Logan Bartlett?

  Before we hopped on, Derek, you were asking about manufacturing a little bit and the speed. Do you want to dive into that briefly?

• 50:53Speaker 02

  Manufacturing speed of what? Everything?

• 50:56Logan Bartlett?

  Drugs, weren't you saying?

• 50:58Speaker 02

  Oh, we were talking about.

• 50:59Logan Bartlett?

  Drugs specifically? Yeah.

• 51:00Speaker 02

  This was, it wasn't manufacturing. Yeah, no, it, this was a, this was a paper that Patrick Hollison tweeted out that I read. I thought was really interesting on, it's, it's, it's not the manufacturing of, of drugs. It's about the fact that the number of new drugs approved per billion dollars spent on R and D has.

• 51:21Speaker 02

  Decline by 50% roughly every decade since the 1950s. And that means that the sort of the efficiency of of medical R and D has declined roughly 80 fold in inflation adjusted terms in the last 70 years. I mean, that's just extraordinary. It this is not just productivity flatlining in medical R and D. It's it's going down. And to drop the point home of just how strange and important that is like if productivity stopped growing for overall manufacturing or productivity stopped growing for like agriculture. I'm trying to think of industries where we just had absolutely extraordinary lift off curves in terms of productivity growth. It would be a catastrophe for the for the human race, for the US economy.

• 52:06Speaker 02

  And so the fact that we're seeing this slowdown in productivity in medical science, which I consider obviously like Zach incredibly important is is is a really interesting phenomenon. And the paper looked at a couple of different factors that they considered primary causes of this um this slowdown in in um R and D productivity. One is one they is what they call the better than the Beatles problem, which they summarized as like the idea that like yesterday's blockbuster, Zach was just saying this, is going to become today's generic, which means that every time we succeed in developing a drug, say statins or something, you know, PSK not inhibitors. Well, that means that in order to develop something that's better than the thing on the market, it could be very, very, very difficult, certainly maybe harder than developing the original statin.

• 52:50Speaker 02

  And not every industry is like this. You know, if if you if you create like, um, you know, uh, uh, if you're Crest and you build like, you know, Crest toothpaste, you don't need to like make a better toothpaste every single year. You can just print out the same Crest toothpaste and you're going to be totally fine. But in science, like every breakthrough is a breakthrough that you can't have again. And unlike in manufacturing, you're not doing the same thing over and over, which makes you like really, really good at, say, making solar panels. That was number one, this better than the Beatles problem.

• 53:21Speaker 00

  By the way, to use your Crest analogy for one second. The other view, the like twist on that analogy is imagine after 10 years of your toothpaste being on market, the government federally mandated that toothpaste was essentially free and you could no longer sell it.

• 53:36Speaker 02

  Right, then you would have to create a new crest, essentially, which which might be good for overall toothpaste. We might in that world, depending on how much people were willing to pay for, you know, new state of the art toothpaste, get a world in which like you brush once and your teeth are clean for the year. But in any case, this is this is the idea, and that not every industry is like medical science, where you're constantly having to come up with entirely new products, because the product that you did come up with last year is going to be generic in a handful of years. That's from one. And the other one they mentioned is is a regulatory problem, which is a familiar theme among among folks that that that I that I read. I don't think everything is a problem of regulation, but I think that there's a lot of bad rules out there.

• 54:18Speaker 02

  And the paper quoted the Novo Nordisk, the Danish company that makes Ozempic. Their CEO once pointed out that, quote, "If printed and stacked, the millions of pages of regulatory documentation required for FDA approval with a total of nine million electronic links would exceed the height of the Empire State Building." So, you know, this is a this is not a study that came up with this statistic. It's the CEO of a pharma company. So he's fairly self interested in terms of dramatizing the the problem of regulatory burden. But those were two factors. And I'd be interested to know what Zach thinks, but I think this is like a really, really important area.

• 54:58Speaker 02

  Like if we found a way to come to make breakthrough science more efficient, it would just be like this is like this is the holy grail that people who are AI boosters talk about. Like when you ask them, what really is AI going to do for the human race? They're like, it's going to make it much, much faster to come up with the sort of breakthrough discoveries in biology that help us live healthier and longer lives. So if we could do this with or without AI, it would obviously be a BFT.

• 55:29Speaker 00

  Look, the better than the Beatles problem is, is real. Uh, and if I had to, if I had to pick like one reason for decline in productivity as it relates to medicine specifically, there's kind of other angles here, but like new, new, new drugs. That is probably the biggest and, and far away. And, and I don't, it's funny because I read the paper and they talk about like, oh, we're going to propose a bunch of solutions here. And that's actually the one part of the paper. They don't propose a solution, uh, which I, I don't have a great idea either, but to try.

• 56:02Speaker 02

  What's the solution? The Beatles exist, you know, the, the drugs exist.

• 56:05Speaker 00

  I mean, yeah, I mean, my solution is if you just get America as rich as humanly possible to your abundance part, like then we just, we have more money to go and, and invest in these things. And frankly, the reality of, of, of science may be that the incremental drug is harder to find, right? The low hanging fruit has been found. The thing that you, you have to remember as, just kind of like as a consumer of this stuff is the minute a new treatment launches, when you run a clinical trial for your next drug, you're not comparing against placebo in the vast majority of cases. What you compare against is what's called

• 56:46Speaker 00

  standard of care, which is basically like, what is the best available treatment for the population that you're, you're, you're focused on today. And what's happened over the last 40 years, because we've actually gotten pretty good at some of these things, is that standard of care just keeps getting better. And in a way, our success causes the, the problem, right? Like the better the standard of care gets, the higher the bar is for you to beat. And the more that bar goes up, the more chances of failure. And so hence what I think is like a natural productivity challenge. You know, look, the hope obviously is new technologies allow you to make better drugs. The challenge is.

• 57:25Speaker 00

  The amount of money that you have to spend before you know whether it remotely has a chance of being better is in the like 100 million plus. And that's the challenge right there, which is like, until you stick a new idea, a new drug in a human being, the amount of information that you have to predict whether this thing is going to work is still pretty limited. You've got some proxies, worked on a cell, you know, in a Petri dish, it worked in a mouse, maybe it worked in a dog, maybe it worked in a monkey, like, those are great incremental data points, but, you know, the number of things that like work in a mouse that don't work in a human is pretty extensive. Uh, there's your problem right there.

• 58:05Speaker 02

  Zach, how do you feel about the work that's being done on like digital cells? This, this idea that we could eventually create a computer model. I'm not explaining this to you, I'm explaining to the audience, just, I know, you know what it is, but like, we can essentially create a computer model that captures the full complexity of the human. It's immune system, it's cellular system, metabolic, et cetera. And so you could essentially test, like, run a digital test of your molecular hypothesis for a drug in this computer before you dose it in a person and get something like 80

• 58:44Speaker 02

  to 90% fidelity or certainty on whether the drug, the molecule would do the thing in the human that it did in the computerized human. Is, is this like a mod, is this a direction of science that you're interested in and optimistic in?

• 59:00Speaker 00

  No.

• 59:01Speaker 02

  Okay.

• 59:02Speaker 00

  No chance. Uh, I mean, like, close your eyes and look forward 100 years, like, maybe. Um, why? Let's just like, one basic thing, uh, to build a computer model that is accurate, you need accurate training data, right? Cause the computer learns from observations, right? It has to have some input to make a prediction. Uh, and that training data needs to be accurate and it needs to be at scale, right? You know, in the same, like, why are these LLMs so good at, like, I can make a Jalen Brunson as the Pope, uh, image this morning in like seven minute, you know, seven seconds, like, it's cause, I don't know, there's a lot of fucking pictures of the Pope and Jalen Brunson on the internet. And so like, the computer can kind of learn pretty quickly. Also, by the way, if it gets it wrong, I just ask it to make another one.

• 59:47Speaker 00

  Not so true, you know, imagine what happens when these predictions are, uh, the big. I don't know, my co-founder, as I asked my same question to my co-founder, who is a scientist, not me, and he gave me this really simple explanation, which I really loved, which is basically like, when we observe what is happening in a cell in research, we are essentially observing that cell while it exists on a piece of plastic. Like, that is not how this cell actually, like, works in the body, right? Because we can't observe the cells in your body because you're alive. And you can't, you can't kind of come in and like build a camera that looks at like all your living cells.

• 1:00:28Speaker 00

  And so all of our understanding of how cells work at like a molecular level essentially is like in some way fundamentally inaccurate. We can get directionally right, and we obviously do learn things, and you learn a lot from trial and error and all that kind of stuff. But like, the input data for the model is like a Petri dish, and it's literally a piece of plastic. And so we are so far from even understanding what happens in a cell that like from observation, let alone being able to feed that data into a model. And so it's not that I think the models won't be incrementally valuable. Like, yes, it'd be great to have a predictive model that kind of like gives me directionally where I go.

• 1:01:10Speaker 00

  But the idea that you could rely on that model from an accuracy standpoint is, I just think, like fundamentally incorrect. I mean, think about it this way, like, how many times inside Gmail does Gmail, who has literally all the text of your emails ever, plus all the text of humankind in the history of humankind to train from? It has like the largest dataset ever created. How many times is the email response that it predicts for you correct?

• 1:01:35Speaker 02

  You know, like

• 1:01:35Speaker 00

  5%?

• 1:01:36Speaker 02

  I don't know, 65%? I know, I'd say 65.

• 1:01:39Speaker 00

  65, maybe you give a lot of simple like thumbs up answers.

• 1:01:41Speaker 02

  I might have, I might have like very simple email exchanges with people. So like, can I interview you? Yes.

• 1:01:47Speaker 00

  You know, that's got like, it's got like a billion x the amount of training data. And so I, it's a training data problem. And I think these tools are great, and I'm thankful that people are working on them. But like, no, it's not a panacea because it's a Petri dish. And then, by the way, even if It does make a prediction that you rely on. You still have to go make the thing. You have to physically manufacture it and then you have to confirm if the prediction was right. And you still gotta go like, stick it in a cell line, stick it in a mouse, stick it in a dog, stick it in a monkey. And you gotta do those in like sequentially, you know?

• 1:02:22Logan Bartlett?

  You don't get to verify it right away like you do with the digital.

• 1:02:25Speaker 00

  I mean, look, if you, if you want to create a, a system where it's like any scientist can make any drug and put it in a human being. Rand Paul would like that system. I guess the libertarian system, right? Like, you know, like, ah, fuck it. Like, let's see what happens to people. Like, if they want to do it, that's up to them. But like, we did that for a while. This is before we had the FDA. And then we got things like thalidomide, which is why we have the FDA in the first place, right? Which was like a, a sedative that we were, we were giving to, to people and women in particular. Uh, and it turns out it causes major birthday attacks. But we didn't catch it because we didn't test it. So like, there's your trade, right? Which is like, yeah, we could move science a lot faster if we're willing to kill people along the way. Doesn't seem like we're willing to do that as a society for, for right reasons.

• 1:03:10Speaker 00

  And so you still have this like, I, I think it was like the make, test, iterate cycle and the make, test, iterate cycle in computers is immediate. And the make, test, iterate cycle in atoms, uh, in, in, in physical stuff i- is not. Plus you got the, so, so no, I don't, I don't, I don't. I don't know. I don't think so. I actually, I mean, this is gonna sound so ridiculous. I know you have to jump. I actually think like the only real way to incrementally produce better drugs over an extended period of time is to just throw money at it. Like you just need the reward to get bigger and bigger and bigger because the risk actually kind of goes up, not down.

• 1:03:51Speaker 00

  Uh, as we get better and there will be incremental things, absolutely, that make this, you know, faster and cheaper. And like my entire venture fund is based on this idea of like, we can make things, you know, incrementally better, faster, cheaper. But there are certain constraints in like, a dog is not a person. A monkey is not a person, a rat is not a person. And, you know, they are only so predictive until you get into human trials. And it's expensive. It's just really expensive.

• 1:04:19Logan Bartlett?

  On that optimistic note, uh, thanks, Derek. Thanks, Zach, for doing this. This is great.

• 1:04:24Speaker 02

  Absolutely. This is fun. I like.