Garth Sundem   00:00

Welcome to this episode of the Medical Affairs Professional Society podcast series: “Elevate”. I’m your host, Garth Sundem, Communications Director at MAPS. And today we are speaking with Robert Atkinson, President of the Information Technology and Innovation Foundation, and author of the recently published book, “Technology Fears and Scapegoats: 40 Myths About Privacy, Jobs, AI, and Today’s Innovation Economy”. So, one of the categories of myths in this book is, of course format. And Robert, as we chatted about just a minute ago, our listeners work in the pharmaceutical and med tech industries, should they be apologetic about it?

Robert Atkinson   00:49

No, there’s a lot of interesting industries. And at the end of the day, there’s really only one that saves people’s lives. And that’s the pharma biopharma industry. And the idea of being apologetic for serving in really such an unbelievably great industry is to be just, something’s gone wrong if people feel they need to apologize for that. My brother was diagnosed with cancer and recently and boxed in, but two years ago and lung cancer and pretty I don’t know, it was stage four pretty far along. He would be dead today without whatever that drug was that uses your own immune system.

Garth Sundem   01:30

Oh, did he do Car-T? Yeah. Did he really? Oh, interesting.

Robert Atkinson   01:34

So he’d be dead. There’s no question he would, he would not be alive today. So somebody, a bunch of scientists saved my brother’s life. And everybody involved in that system, from discovery to people who are on the factory floor, making the drug to the people who are marketing and everybody should be incredibly proud. So this is just ridiculously there’s been a demonization of, quote, Big Pharma. My sec, my last book was actually called Big is beautiful debunking the myth of small business. And a pharma was made up of a large number of, you know, 10 person companies making, you know, grinding compounds and a little pistol and mortar and thing, and nobody care, but it’s a big company. So it must be bad. So it’s absolutely they should be incredibly proud.

Garth Sundem   02:24

You know, is it okay then for pharma to make money? I mean, so I’m going to be kind of blunt on this recording. Now, some of the questions that I think are floating around in the Medical Affairs ecosystem that sometimes people within the function are hesitant to, to address. Is it okay for pharma to make money? I mean, your brother’s car T therapy wasn’t cheap.

Robert Atkinson   02:49

Right? Well, first of all, of course, it’s okay to make money unless we want to move to a socialized system, which is, frankly, what the opponents want the most many of the critics of, quote Big Pharma, they will literally come right out and say they want NIH to be making and selling drugs. It’s absurd. So that’s number one. So we live in a capitalist system. And thank God we do because it produces all these great benefits. So the real question for Pharma is are the profits excessive? Now, there’s two issues here. One is, Pharma is a little bit like venture capital or making a movie, you know, most of the movies don’t make any money, they lose money, but occasionally, you’ll get one that makes it and then that the portfolio theory makes up for that. So when people say, Oh, what’s one drug? Well, that was because when you know better an idea, and we’ve written about, you know, what 100 drugs failed. So you have to make a bunch of money on the one that succeeded. So that’s point number one. Point number two, let’s just look at the overall rate of profit in the industry. Now, again, what people like to point out, they’ll pick one firm, oh, my God, look at the protocol that’s meaningless. You have to look at the entire industry. And according to the academic researchers that we cite, did a study a few years ago, and they compared profits of pharma versus s&p 500. And they define they found that a profits in pharma were actually lower than the s&p 500. There was another one that NAT analysis of the journal plus one that found that quote, pharmaceutical, pharmaceutical, quote, returns were substantially lower than those of eight other healthcare industries. So that’s the other thing if you really want to look at profits in the healthcare industry, it’s not pharma, it much more is in is in pharmaceutical benefit management, for example, those firms are making a lot of money, but I’m not even criticizing them. I’m just but the idea that pharmas making excess provinces is simply not supported by you know, legitimate good scholarly studies.

Garth Sundem   04:49

Yeah, it seems like the public opinion of pharma if it’s negative, you know, we’re we’re losing lives to that opinion. You know, So it seems dramatically unfortunate that that the opinion of the pharmaceutical industry might not quite match the reality of the pharmaceutical industry. So why is that? Why does pharma have a bad rap? If its profits aren’t those are the margins, I guess, aren’t those of s&p 500. And we’re saving lives.

Robert Atkinson   05:23

So, one of the pharmas, not the only industry that has this problem. And so, there’s really two issues. There’s the issue of, you know, look, I, if my brother had to pay out of pocket for his treatment, and he’d be dead, because he doesn’t have as much money. So you know, like drugs, some drugs cost a lot. And people look at those notes, hopefully, geez. But they don’t look at all the other. I mean, what I think what my colleague Steven is, oh, leads are BioPharm word, but I think it’s something like you’ve probably noticed 90% of drugs are off patent and nobody notices or cares. But it’s the few that are still on their patent that have to make their money back. And people sort of recoil this with high cost. But I think the more serious problem that’s emerged in the last sort of decade or so is in the United States. And I say this in a completely bipartisan way. I just background I was I was head of the Biden, trans non resident, election team heading up there Advanced Technology Policy Team. So I’m not a free market Republican or anything like that. But there’s a lot of people on the Democratic Left that really progressives, the Bernie Sanders of the world, in this case, representative in the house called Katey Porter, they fundamentally do not want private sector to be involved in these sectors. And so for example, they push for government owned broadband networks. They, they they want, essentially government driven drug development. So if you do that, people do that. Why would we give up on a great system? Well, you then have to intentionally degrade the system, you have to tell people the system doesn’t work. So they have this long, and I think for your listeners probably don’t appreciate how systematic the narrative in the campaign has been. So drug companies not only make excess profits, they don’t invest anything in r&d. Now you and I will laugh at that and go How can anybody in the right mind believe this nonsense? But that’s what they say, Oh, they spend more money on stock buybacks in r&d, no, wrong, they spend more money on advertising the nerdy, no, wrong. They don’t develop any new drugs, no, wrong. I mean, if you look at the number of new molecules, approved by the FDA, you’ve seen this incredible pickup in the last 15 years. And then they say, Oh, well, they’re just all meat to drugs, no wrong. And that’s what we point out in the book. So there’s, it’s an intentional campaign to degrade the industry, and really, at the end of the day, have the government takeover of drug development.

Garth Sundem   07:55

You know, if the government took over on drug development, I imagined that, you know, be some sort of, sort of like a nonprofit structure almost. And now, the drug companies are at the end of the day incentivized by by by profit. That’s what a, you know, for profit corporation is Medical Affairs. We’re sort of firewalled from that a little bit. We can’t measure against commercial objectives we measure against various metrics describing patient benefit, is the incentive structure for the pharmaceutical industry as a whole? Can we do the best for society while we are incentivized by profit?

Robert Atkinson   08:42

Most markets have what economists call some quote market failures. So a really good example of that is rare diseases. So it’s tragic. It’s awful. It’s sad. But if you’re a company trying to make money, there are a lot of rare diseases, it just it makes absolutely no economic sense to invest, because you will lose an enormous amount of money. So why would we expect a company to do that? I mean, it’s just it’s irrational. And that extends up to an even broader level, let’s just say hypothetically, that we had a government, you know, chartered nonprofit, it didn’t make any money. And it developed drugs, they probably wouldn’t be investing in rare diseases, either because they need to make money somehow and they’d have to get a big appropriations from Congress to put money into that. So I think the answer first of all, one of the problems was they took away the rare earth tax and the rivers, sorry, rare earths. The rare disease tax credit, which was a mistake, but clearly there are areas where government needs to sort of push a little bit and that’s, I think, a big role. We’re NIH to play a role. NIH can say, look, there are certain diseases or problems or things where maybe the private sector is not doing it, but let’s put more money. into research there. And hopefully we can get things moving along with the drug companies, whether big or small startups or existing can kind of carry it on. But by and large, I mean, the how many drugs have failed on Alzheimer’s? Okay, that’s not a market failure. That’s a, that’s a unbelievably tough science problem. Same thing with cancer, high blood pressure, now we’re seeing obesity, so I just don’t buy that, that they? Yeah, there are a few things here and there. But overall, the alignment between them making money and serving real societal needs, I think is pretty close.

Garth Sundem   10:34

What’s the, aw geez, I’m forgetting my biases. But you know, the, the observable things, the thing that sticks in your head, you know, is it that the pharma industry is that the opinion of the public is based on a few bad actors? Do you see Purdue as a bad actor?

Robert Atkinson   10:55

Yeah, I think there’s some other ones to

Garth Sundem   11:01

Pricing. Yeah, sure. Yeah. Yeah.

Robert Atkinson   11:03

And, you know, the only thing about that, I mean, the pharma, the organization, the drug company, and trade. I mean, they kick those guys out, you know, a lot of them. And, you know, they’re they’re sort of recoiling in horror as well. And so, yeah, there’s sort of this confirmation bias, you see one of these bad actors, and you’re like, oh, man, everybody’s like that. You know, that’s partly just partly the way people are. But But again, I can’t stress enough, there is an organized campaign, literally, to change the way the industry operates. And when it sees one of these, you know, produce or whatever, it just ramps up, the campaign has a hot Look, they’re all like that. And it’s just hard. You know, it’s hard to overcome that. Because it’s, also it’s hard to overcome it, because it’s been going on for so long. And we haven’t been able to adequately push back against when I say we, I mean, advocates of I put myself in the category of advocates of BioPharm innovation, I got a call one time. I won’t say who it was, but it was a it was a advocacy group for a cheaper drug crisis. And, and, you know, one level, I’m supportive of that, you know, they wanted more drug access, particularly in the poor countries in the world. And I said, Look, ultimately, they’re seeing you and I is that I want my main goal, as is as it is to think I, I want really way better drugs for my two kids, when they’re my age. If their drugs are the same as mine, I think we’ll have failed. And your goal is to get drugs brought more broadly to people in the world today. It’s a really a good goal, but they’re in conflict. And she said, Oh, no, they’re not. They’re not in conflict. I said, look, the OECD the big major organization, they have shown clearly that there’s a point nine eight correlation for those of your your non statistical listeners on a one to one, almost a one to one correlation between drug company revenues and drug company r&d. So I want more r&d Because more r&d leads to more drugs.

Garth Sundem   13:08

All right, let’s leave it at that more r&d leads to more drugs and a lot of interesting influences from various forces regulatory, and political and economic as well. So Robert, thanks you for joining us today. For more myths, and many of these are big technology myths, AI myths. Check out Robert’s book, “Technology Fears and Scapegoats: 40 Myths About Privacy, Jobs, AI, and Today’s Innovation Economy”. MAPS members don’t forget to subscribe, and we hope you enjoyed this episode of the Medical Affairs Professional Society podcast series: “Elevate”.