Latest / Making Medicine / Inside Congress: Senator Thom Tillis on Drug Pricing, IP, and the Future of Innovation

Transcript

Inside Congress: Senator Thom Tillis on Drug Pricing, IP, and the Future of Innovation · Making Medicine

• 0:00
  Speaker 1: At Making Medicine. We're reporting on the headlines, not making
• 0:03
  Speaker 1: medical recommendations. For personal health questions, always consult a doctor.
• 0:08
  Speaker 1: Nothing in this episode constitutes investment, financial, or legal advice,
• 0:12
  Speaker 1: and please consult your own advisors before making decisions.
• 0:18
  Speaker 2: These farms man.
• 0:19
  Speaker 3: Yeah.
• 0:22
  Speaker 4: Yeah.
• 0:23
  Speaker 1: For those who follow Incubate, you know the epic Act.
• 0:25
  Speaker 1: This is one of our champions.
• 0:26
  Speaker 2: So seriously geeky. By the way, I know why you're
• 0:30
  Speaker 2: talking like T shirts and stuff. That's okay. I did
• 0:32
  Speaker 2: say IP was sexy. I'm with you.
• 0:34
  Speaker 1: I'd like to get a T shirt IP is sexy
• 0:36
  Speaker 1: in quotes with the logo who can do that? Welcome
• 0:44
  Speaker 1: back to the Making Medicine Podcast. For science, policy and
• 0:47
  Speaker 1: innovation meet we'll be focusing on that middle word policy.
• 0:52
  Speaker 1: As for the first time ever, Incubate hosts a sitting
• 0:54
  Speaker 1: US Senator on the Making Medicine Podcast, Senator Tom Tillis
• 0:59
  Speaker 1: of North Carolina. We'll be joining us to talk all
• 1:01
  Speaker 1: things policy, all things politics, and of course, all things
• 1:05
  Speaker 1: life sciences. As always, I'm your host, John Stanford. Let's
• 1:09
  Speaker 1: get into the show. Center till Us, thanks for being
• 1:12
  Speaker 1: on the show.
• 1:13
  Speaker 2: Thanks for having me.
• 1:14
  Speaker 1: I want to get started dialing back a few years,
• 1:17
  Speaker 1: You've had a pretty pretty incredible career.
• 1:21
  Speaker 3: But it didn't It's not just us Senate.
• 1:23
  Speaker 1: There was a great time in North Carolina where you
• 1:25
  Speaker 1: were in charge, and a steady stream throughout all of
• 1:29
  Speaker 1: that was a commitment to life sciences. I mean, we
• 1:32
  Speaker 1: did some digging and look back at your leadership in
• 1:34
  Speaker 1: the General Assembly, obviously on Capitol Hill, you've been a
• 1:38
  Speaker 1: champion for life sciences.
• 1:40
  Speaker 3: Where's that come from?
• 1:42
  Speaker 5: It really came from my focus on life sciences really
• 1:45
  Speaker 5: did come from my time in the legislature. I was
• 1:48
  Speaker 5: in the minority for two terms four years, and then
• 1:51
  Speaker 5: when we got a majority, I became Speaker. And what
• 1:53
  Speaker 5: I'd observed for four years North Carolina, aside from having
• 1:58
  Speaker 5: horrible tax and regulatory policy, they had all of the
• 2:02
  Speaker 5: above for economic development in the state. They didn't think about,
• 2:06
  Speaker 5: you know, picking strategic sectors and doubling down on the
• 2:10
  Speaker 5: ones that we had the most compelling case for. And
• 2:13
  Speaker 5: so I said, guys, I don't want to be all
• 2:15
  Speaker 5: things to all people. I don't want to pursue every
• 2:17
  Speaker 5: economic development opportunity. I want to pursue ones where I
• 2:19
  Speaker 5: could walk into a boardroom and say, you'd be crazy
• 2:22
  Speaker 5: not to pick North Carolina that sort of posters. So
• 2:25
  Speaker 5: it's high tech, financial services, biotech, and military and defense
• 2:29
  Speaker 5: related sectors were clearly our strategic sectors. I said, bet
• 2:34
  Speaker 5: on them. Let's start encouraging local governments and local economic
• 2:38
  Speaker 5: developers to build inventory for these types of projects. And
• 2:42
  Speaker 5: I think the proofs in the pudding. And incidentally, with
• 2:46
  Speaker 5: due respect to the people who came up with the
• 2:48
  Speaker 5: research triangle concept back in the day decades ago, everybody
• 2:52
  Speaker 5: thought they were crazy, but I saw that as an
• 2:54
  Speaker 5: asset that needed to be exploited, and that's why we
• 2:57
  Speaker 5: went to target it economic development.
• 3:00
  Speaker 1: Well, that will be coming back to that strategic not
• 3:03
  Speaker 1: just at the state level, but globally. What the US
• 3:06
  Speaker 1: does very well is biotech and how do we keep
• 3:08
  Speaker 1: that going. Let's talk about some of the fruits your labor.
• 3:11
  Speaker 1: I had the team pull the data to date, five million,
• 3:15
  Speaker 1: six hundred million of new investments this year in North
• 3:18
  Speaker 1: Carolina generates two hundred and twenty thousand jobs a year
• 3:22
  Speaker 1: the pharma and biotech in the state. Those are direct jobs,
• 3:25
  Speaker 1: and those are direct jobs. I mean, so you know
• 3:27
  Speaker 1: these numbers better than I do. It is hard to say,
• 3:31
  Speaker 1: I mean Massachusetts, California. They get to make big claims,
• 3:35
  Speaker 1: big economies. North Carolina would not have been that third state,
• 3:40
  Speaker 1: not be I think we're CNBC's first state.
• 3:44
  Speaker 2: Tell it.
• 3:45
  Speaker 3: I get asked a lot by other states, how do
• 3:47
  Speaker 3: we catch up to North Carolina? What would you answer
• 3:49
  Speaker 3: that question with?
• 3:50
  Speaker 5: Go back and implement a well rounded tax policy, commit
• 3:55
  Speaker 5: to future reductions if you achieve growth standards for for
• 4:00
  Speaker 5: any kind of tax reform, regulatory reform you're after, It's
• 4:05
  Speaker 5: pretty simple. Keep it simple. Understand that regulatory burdens are
• 4:09
  Speaker 5: actually even greater than tax burdens. So take out any
• 4:13
  Speaker 5: of the regulatory overhead that you can and focus on
• 4:16
  Speaker 5: basis point differences between states. So when I came in
• 4:19
  Speaker 5: a speaker, I said, guys, I don't want to be
• 4:22
  Speaker 5: two percentage points better than South Carolina on taxes. I
• 4:27
  Speaker 5: want to be basis points better. And if we can
• 4:30
  Speaker 5: go further, great, but let's just manage so that we're
• 4:33
  Speaker 5: always in the top three, four or five on any
• 4:36
  Speaker 5: major measure. And then we went on the merits of
• 4:38
  Speaker 5: the state as a whole. That's how you win economic development.
• 4:41
  Speaker 1: And in your view, that delta is that small I mean,
• 4:44
  Speaker 1: you don't have to be fifty times better in business.
• 4:46
  Speaker 1: You just have to be a little bit better to
• 4:48
  Speaker 1: attract the jobs in the investment game of.
• 4:50
  Speaker 5: Nues, and it's more sustainable. I think a lot of
• 4:53
  Speaker 5: the states. When we decided to do tax reform, we
• 4:55
  Speaker 5: were the first state, and it was something that I suggested.
• 5:00
  Speaker 5: I was worried, well, what if we do these big
• 5:01
  Speaker 5: tax cuts and the revenue doesn't come in. I said,
• 5:04
  Speaker 5: let's adjust for it and the implementation. Let's create triggers.
• 5:07
  Speaker 5: We'll do perspective tax cuts if we hit our clip.
• 5:11
  Speaker 2: Rate, and we did.
• 5:12
  Speaker 5: Every time, every one of those triggers when they came
• 5:14
  Speaker 5: about triggered another tax reduction, and so getting our tax
• 5:20
  Speaker 5: climate to competitive at the same time that we're getting
• 5:23
  Speaker 5: our regulatory climate to competitive. I think the other thing now,
• 5:26
  Speaker 5: everybody wants to eliminate the income tax. I want a
• 5:30
  Speaker 5: I want you you want to continue to have downward
• 5:33
  Speaker 5: trend on income tax. But if you want a diversified
• 5:37
  Speaker 5: tax base and you want something that can deal with
• 5:39
  Speaker 5: countercyclical be countercyclical, bet be resilient, then you want some
• 5:44
  Speaker 5: primarily consumption based taxes, but with some productivity production based
• 5:49
  Speaker 5: taxes as a mix, and we've got the right mix
• 5:51
  Speaker 5: in several states. I was talking to the governor of
• 5:53
  Speaker 5: Mississippi a couple of weeks ago and he said, yeah,
• 5:56
  Speaker 5: we're we're implementing tax reform, and we learned a lot
• 6:00
  Speaker 5: from North Carolina and how to do it right because
• 6:02
  Speaker 5: we looked at all the states that did it wrong
• 6:04
  Speaker 5: had to go back and repeal taxes, those sorts of things.
• 6:06
  Speaker 5: We haven't had to do that. And that's just being
• 6:09
  Speaker 5: smart business like in the approach.
• 6:11
  Speaker 1: And I you know, one, maybe I'm putting words in
• 6:15
  Speaker 1: your mouth here, so push back if I am.
• 6:17
  Speaker 3: But it's not the extremes.
• 6:19
  Speaker 1: It's not no income tax, it's it is finding a balance.
• 6:24
  Speaker 1: And it just seems like we live in a world
• 6:25
  Speaker 1: where and we'll get to this in a second, where
• 6:27
  Speaker 1: the most extreme policy idea is what rises to the top.
• 6:31
  Speaker 1: But from the tax perspective, you're not out here saying
• 6:34
  Speaker 1: zero percent income tax.
• 6:36
  Speaker 5: No. I think it's you create more of a challenge
• 6:40
  Speaker 5: for yourself. And if it's purely consumption based tax framework,
• 6:43
  Speaker 5: what happens when consumption goes down dramatically? So you know,
• 6:48
  Speaker 5: in the same way I used to advise a clients
• 6:50
  Speaker 5: on well rounded business strategies. We wanted a well well
• 6:53
  Speaker 5: rounded business strategy for our tax environment.
• 6:55
  Speaker 2: We got it.
• 6:56
  Speaker 5: You should always have downward pressure on product I want
• 7:00
  Speaker 5: to tax productivity too much, but having that in the
• 7:03
  Speaker 5: mix with consumption sales taxes is the right formula. I
• 7:08
  Speaker 5: think it's indisputable. North Carolina's done well since we implemented
• 7:11
  Speaker 5: those foundational reforms back in twenty eleven, actually two thousand
• 7:16
  Speaker 5: and thirteen, because I did not want to do tax
• 7:20
  Speaker 5: reform in the midst of a financial crisis. What I
• 7:22
  Speaker 5: wanted to do was reg reform to create the economic
• 7:26
  Speaker 5: activity to then fund the tax reform. We were not
• 7:28
  Speaker 5: in a position to do tax reform in in my
• 7:31
  Speaker 5: first two years a speaker, but we got well positioned
• 7:34
  Speaker 5: two years later, which.
• 7:35
  Speaker 1: I imagine included batting down some of your more your
• 7:40
  Speaker 1: members who were more extreme, like, let's get we're here,
• 7:42
  Speaker 1: we're in charge, we got the gavel, let's go hard charging.
• 7:46
  Speaker 1: How do you pacify, because I think this is so
• 7:49
  Speaker 1: incredibly important in this moment, how do you pacify the extremes.
• 7:54
  Speaker 5: I'm not very good at pacifying adults, to be quite
• 7:57
  Speaker 5: honest with you. The way I pacified members in the
• 8:01
  Speaker 5: state House. I created a committee on When we came in,
• 8:05
  Speaker 5: we were all about jobs, jobs, jobs. I said, don't
• 8:08
  Speaker 5: come to my office with anything that's not going to
• 8:10
  Speaker 5: create or save a job.
• 8:12
  Speaker 2: That's our first priority.
• 8:13
  Speaker 5: We're in the middle of a financial crisis, and invariably, yeah,
• 8:17
  Speaker 5: I hear what you're saying, but I need this or
• 8:19
  Speaker 5: I need that. I got so tired of seeing some
• 8:23
  Speaker 5: of these silly bills being filed. You know, a speaker,
• 8:25
  Speaker 5: I can't stop a bill from being filed. I can
• 8:27
  Speaker 5: just stop it from being moved. And in the past,
• 8:30
  Speaker 5: you know, you do serial referrals. So if you have
• 8:32
  Speaker 5: a dumb bill and they'd say you'd refer to rules,
• 8:36
  Speaker 5: if favorable refer to finance, a favorable refer to state government,
• 8:40
  Speaker 5: and favorable refer to rules. That was a way of
• 8:42
  Speaker 5: saying it's never going to get be heard. I create
• 8:44
  Speaker 5: a very concise way of saying it wasn't going to
• 8:46
  Speaker 5: be heard. We created a committee on ways and means
• 8:49
  Speaker 5: that never met, and when you got to build, referred
• 8:51
  Speaker 5: to ways and means is because I would tell them
• 8:53
  Speaker 5: there ain't no way and you got no means. You've
• 8:55
  Speaker 5: just got to be disciplined. But when you get a
• 8:58
  Speaker 5: I mean, I was the second Republic speakers since the
• 9:00
  Speaker 5: Civil War. We made a lot of promises and I
• 9:02
  Speaker 5: was obsessed with fulfilling every single one of them. And
• 9:05
  Speaker 5: I was damned if I was going to let anybody
• 9:07
  Speaker 5: take us off that strategy.
• 9:09
  Speaker 2: And we didn't, and we did well.
• 9:11
  Speaker 1: Yeah, and the state returned you then and said, Okay,
• 9:15
  Speaker 1: you've done so well at the state level, go fix
• 9:18
  Speaker 1: what's going on in Washington. You mentioned a formula a
• 9:21
  Speaker 1: little earlier, and I want to I want to get
• 9:22
  Speaker 1: your sense. You oversee, Intellectual Property for the Senate will
• 9:26
  Speaker 1: flash up on the screen, the big fancy chairman title
• 9:29
  Speaker 1: of the subcommittee.
• 9:30
  Speaker 3: But you know IP, when we talk.
• 9:33
  Speaker 1: About the formula for life science investing, IP is critically important.
• 9:38
  Speaker 1: You're pushing some changes to intellectual property. Curious why something
• 9:43
  Speaker 1: is as weedy as IP. Why does it make your
• 9:47
  Speaker 1: your radar?
• 9:48
  Speaker 2: I think I P is sexy.
• 9:50
  Speaker 5: It's ay, and I have to explain why what I
• 9:54
  Speaker 5: my first professional job, I came out of a warehouse.
• 9:57
  Speaker 5: I was working for an insurance company and Chattanooga, Tennis
• 10:00
  Speaker 5: see that I was recruited to Wang Laboratories in Boston,
• 10:03
  Speaker 5: which at the time was two billion dollar market cap
• 10:07
  Speaker 5: emerging technology the hands down winner and office automation. But
• 10:11
  Speaker 5: I was a product manager and I'd have a lot
• 10:13
  Speaker 5: of smart engineers and software engineers, hardware engineers come to
• 10:18
  Speaker 5: me with good ideas. One of the first things I'd
• 10:20
  Speaker 5: have to look at is is this patentable? Or am
• 10:22
  Speaker 5: I going to get a recovery on my investment that
• 10:25
  Speaker 5: I'm gonna have to make because not all R and
• 10:27
  Speaker 5: D pans out. So that gave me, I mean, at
• 10:31
  Speaker 5: the ripe age of twenty five up in Boston, mass
• 10:34
  Speaker 5: gave me an appreciation for intellectual property. Who knew that
• 10:38
  Speaker 5: I'd be in the Senate and I'd had a chief
• 10:40
  Speaker 5: who was formally on Judiciary said I think we need
• 10:42
  Speaker 5: to reinitiate the Intellectual Property Subcommittee. We're our office proposed
• 10:47
  Speaker 5: recreating that subcommittee and Judiciary, and I'm glad we did.
• 10:52
  Speaker 5: We've done some extraordinary work. But quite frankly, it's the
• 10:54
  Speaker 5: only reason I'm willing to remain on Judiciary because it
• 10:57
  Speaker 5: is a real nuts and bolts, gritty, gets stuff done
• 11:01
  Speaker 5: committee and.
• 11:03
  Speaker 2: We've got more to do.
• 11:04
  Speaker 5: The pair the patent eligibility Restoration Act is critically important
• 11:09
  Speaker 5: for the life science of space because there are inventions
• 11:14
  Speaker 5: creations in life sciences today that are not even eligible
• 11:19
  Speaker 5: for consideration.
• 11:20
  Speaker 2: To be patented.
• 11:21
  Speaker 5: There's still going to have to be a process that
• 11:24
  Speaker 5: you have to go through to receive a patent, but
• 11:26
  Speaker 5: not even for consideration, and that will have it already
• 11:29
  Speaker 5: is having a dampening effect on innovation.
• 11:32
  Speaker 1: Yeah, I mean, from our perspective, money can't chase the
• 11:36
  Speaker 1: idea of something. It's the patent that makes the magic happen.
• 11:39
  Speaker 1: We've gotten some taking a stand on IP the administration,
• 11:44
  Speaker 1: a lot of ideas, A lot of things come out
• 11:46
  Speaker 1: one that we sort of keep hearing about out of
• 11:51
  Speaker 1: the Secretary of Commerce and maybe more broadly IP that
• 11:56
  Speaker 1: is somehow derived from the federal space. Therefore we get
• 12:00
  Speaker 1: equity stakes in.
• 12:02
  Speaker 5: I think that is nonsense. I am tired of Republicans
• 12:08
  Speaker 5: calling themselves conservatives. If they condone that sort of intervention,
• 12:12
  Speaker 5: With all due respect to the Secretary of Commerce, go
• 12:15
  Speaker 5: back to business if you want to do that. That
• 12:17
  Speaker 5: is not the proper role of the government at all,
• 12:19
  Speaker 5: certainly not the federal government. Other than that, I don't
• 12:22
  Speaker 5: have an opinion.
• 12:23
  Speaker 3: I was going to say, I don't even need a
• 12:25
  Speaker 3: follow up question. It's just it's absurd.
• 12:27
  Speaker 5: You know, It's sort of like it's going into these
• 12:29
  Speaker 5: ten percent stakes and chip manufacturers. Does anybody honestly believe
• 12:34
  Speaker 5: that any other board vote matters when the US government
• 12:37
  Speaker 5: has a ten percent stake and a major corporation, we've
• 12:40
  Speaker 5: got to get out of that. Well, let the government
• 12:43
  Speaker 5: observe and facilitate innovation, not become a part of it,
• 12:48
  Speaker 5: because government does not innovate, it only creates the groundwork
• 12:53
  Speaker 5: for innovation.
• 12:54
  Speaker 1: Well, and we seem to have a deepening reach by
• 12:57
  Speaker 1: this administration. You know, I think when you decided to
• 13:00
  Speaker 1: come to Washington, you know, the parties were beginning to
• 13:05
  Speaker 1: meander from true pillars, and for Republicans that was free
• 13:09
  Speaker 1: markets and capitalism. We have meandered quite a bit. And
• 13:13
  Speaker 1: now one of the issues that we talk a lot
• 13:16
  Speaker 1: about here is this most favored nation approach, this idea
• 13:19
  Speaker 1: of reference pricing, that the US market should begin to
• 13:22
  Speaker 1: employ price controls all our Europe.
• 13:24
  Speaker 3: Alla Japan. Where one, what do you think about that? Two?
• 13:32
  Speaker 1: If we become a price controlled market, where do you
• 13:36
  Speaker 1: see consequences for the innovation jobs? North Carolina economy.
• 13:39
  Speaker 5: I again, I think that it will probably lead to
• 13:45
  Speaker 5: significant unintended consequences. Anytime you try to control the market
• 13:51
  Speaker 5: or control prices.
• 13:53
  Speaker 2: It never works. Never works.
• 13:55
  Speaker 5: Now, one of the things that we should do is
• 13:58
  Speaker 5: educate our consumers and one of the reasons why we
• 14:02
  Speaker 5: are very expensive jurisdiction. Take a look at our litigation environment,
• 14:06
  Speaker 5: take a look at so. I do believe that there
• 14:09
  Speaker 5: is a disparity, and I do believe that there are
• 14:11
  Speaker 5: certain countries that are getting an advantage that we need
• 14:15
  Speaker 5: to equalize in the same way that we have trade
• 14:18
  Speaker 5: deficits and we need to have more I think fair
• 14:23
  Speaker 5: flow of trade, but against all of the blanket tariffs.
• 14:27
  Speaker 5: I think the what if we're trying to address the
• 14:30
  Speaker 5: inequities in trade. I'm on board with the how I'm
• 14:33
  Speaker 5: not so on board with the same thing here the
• 14:36
  Speaker 5: what I get it. There should not be a dramatic
• 14:39
  Speaker 5: There should not be a scenario where somebody is getting
• 14:42
  Speaker 5: mail order or access from some other country for consumption here.
• 14:47
  Speaker 5: Whether they're doing that legally or illegally, it's occurring. There's
• 14:51
  Speaker 5: got to be a way to adjust for that. This
• 14:53
  Speaker 5: is not the right way to adjust for it, it's mechanical,
• 14:56
  Speaker 5: it's government enforced, and it's going to produce unintended consequences.
• 15:00
  Speaker 1: And so when you see these, I mean, let's separate
• 15:02
  Speaker 1: the two issues, because I want to make sure I
• 15:04
  Speaker 1: want to hear this right. Company decides it's in their
• 15:09
  Speaker 1: interest from a market based solution, to make some announcement
• 15:13
  Speaker 1: on individual products that they're going to charge the same
• 15:16
  Speaker 1: around the world. So company decided this is in our interest.
• 15:21
  Speaker 1: That in my mind seems passable. So what what the
• 15:24
  Speaker 1: White House is sort of calling these MFN deals, They're
• 15:27
  Speaker 1: really just company by company working with the White House.
• 15:30
  Speaker 3: Fine, the codification of.
• 15:34
  Speaker 1: These price controls, in my mind, is a separate bucket
• 15:36
  Speaker 1: and one that needs to be pushed back with your colleagues.
• 15:40
  Speaker 5: Yeah, I don't think it as a prayer being passed
• 15:43
  Speaker 5: in Congress. So I think this is an administration policy.
• 15:46
  Speaker 5: But even the administration policy needs to be careful. I mean,
• 15:49
  Speaker 5: you're when you're the US government, you are the thousand
• 15:52
  Speaker 5: pound guerrilla. And of course every company is going to
• 15:56
  Speaker 5: come to some agreement. They may negotiate tough, but at
• 15:58
  Speaker 5: the end of the day, they're not going to walk
• 15:59
  Speaker 5: away from the table.
• 16:00
  Speaker 2: So it's not a fair fight.
• 16:02
  Speaker 5: So the question you have to ask yourself is what drug,
• 16:05
  Speaker 5: what project is not going to get initiated, what drug
• 16:09
  Speaker 5: is not going to be ever brought to market? And
• 16:11
  Speaker 5: what the good news is it's going to be very
• 16:13
  Speaker 5: low cost. The bad news is it's not going to exist.
• 16:16
  Speaker 5: So the you know, I think it's striking that balance
• 16:21
  Speaker 5: that I'm really trying to encourage in this administration. Now
• 16:24
  Speaker 5: the flip side, if you want to see what happens
• 16:27
  Speaker 5: when you overreach, just go back to the Inflation Reduction Act.
• 16:31
  Speaker 5: We have notes from board meetings where there were sixty
• 16:35
  Speaker 5: percent cuts in small molecule research within months of the
• 16:39
  Speaker 5: Inflation Reduction Act because of the blunt forced object that
• 16:43
  Speaker 5: they use to try and get drug prices under control.
• 16:45
  Speaker 5: I mean, what more evidence do we need? Does anybody
• 16:48
  Speaker 5: really believe that you want to go on a CEO
• 16:50
  Speaker 5: wants to go on a board into a board meeting
• 16:52
  Speaker 5: and saying we have slashed research and development for small
• 16:55
  Speaker 5: molecule research bus sixty percent, not because we don't think
• 16:58
  Speaker 5: there are incredible therapy using cures, but because the money's
• 17:02
  Speaker 5: got to come from somewhere.
• 17:03
  Speaker 1: Well, this has been the from as an advocate sitting
• 17:06
  Speaker 1: with policy. I mean this one has been basic one
• 17:10
  Speaker 1: oh one, as easy as it gets for me to
• 17:11
  Speaker 1: explain a policy. We launched the Life Science Tracker to
• 17:14
  Speaker 1: show exactly that the public statements from these companies saying
• 17:18
  Speaker 1: science is great, our people are great. I'm killing it
• 17:20
  Speaker 1: because why can how can I justify pursuing a project
• 17:25
  Speaker 1: that I know has fifty percent less revenue out of
• 17:28
  Speaker 1: the gate. One of our vcs was quick to say,
• 17:31
  Speaker 1: don't even pitch us an NDA based product. You you
• 17:34
  Speaker 1: either reformulate as a biologic because the market's still for
• 17:38
  Speaker 1: there for that. So the Epic Act and for those
• 17:40
  Speaker 1: who follow incubate, you know, the Epic Act.
• 17:43
  Speaker 3: This is one of our champions.
• 17:44
  Speaker 2: Seriously geeky, by the way, I know why this is.
• 17:47
  Speaker 2: This is who you're talking to, like T shirts and stuff?
• 17:49
  Speaker 3: You know, are our head of public affairs.
• 17:52
  Speaker 1: Grace was running me through some recent numbers one of
• 17:54
  Speaker 1: our episodes across the one hundred and fifty thousand view mark,
• 17:57
  Speaker 1: and I sat there saying, who are.
• 17:59
  Speaker 3: These people who?
• 18:02
  Speaker 2: Exactly a T shirt?
• 18:04
  Speaker 1: Your ip is sexy in quotes with the logo we
• 18:07
  Speaker 1: can do that. You know something that also comes up
• 18:12
  Speaker 1: something with the epic Act. So I'll sit with policymakers
• 18:14
  Speaker 1: both sides of the EE. I'll explain to them the issue,
• 18:18
  Speaker 1: and they get really defensive of small biotechs, and they say,
• 18:21
  Speaker 1: you're right, I love small biotech. We'll put carve outs
• 18:24
  Speaker 1: in the bill for them. But it's this cognitive dissonance
• 18:27
  Speaker 1: that the small biotechs and the investors behind them someday
• 18:31
  Speaker 1: want to sell. And so the biotechs, the crown jewels
• 18:35
  Speaker 1: of RTP, the pearl now here in Charlotte, pretty happy
• 18:38
  Speaker 1: about it. Someday they want to be a product of
• 18:42
  Speaker 1: a large company. How how do you run into your
• 18:46
  Speaker 1: colleagues this idea of big pharma bad, small biotech great,
• 18:50
  Speaker 1: and how do we close the gap there?
• 18:52
  Speaker 5: I think it's as silly as big banks bad, small
• 18:56
  Speaker 5: banks great. You need an ecosystem in these markets, and
• 19:00
  Speaker 5: the ecosystem and finance and banking is no different than pharmaceuticals.
• 19:04
  Speaker 5: You start small, you have a great idea, you get
• 19:07
  Speaker 5: VC interested, you move it to the next level. You
• 19:10
  Speaker 5: either grow big yourself or you become a big a
• 19:14
  Speaker 5: part of something already established, rents and repeat. That's a
• 19:17
  Speaker 5: healthy ecosystem in a tech sector that I focus on
• 19:21
  Speaker 5: a lot in North Carolina. Picking winners and losers doesn't
• 19:24
  Speaker 5: make sense to me. Government's horrible at picking winners and losers,
• 19:28
  Speaker 5: and they in the process they absolutely destroy innovation and
• 19:32
  Speaker 5: risk taking, dramatically reduce investments that we need to make
• 19:37
  Speaker 5: to continue to be the envy of the world. We
• 19:39
  Speaker 5: are the world's envy for the innovation economy. Everything that
• 19:43
  Speaker 5: I do is with a focus on being able to
• 19:45
  Speaker 5: say that for the next century.
• 19:46
  Speaker 1: So let's talk about the biggest threat to being able
• 19:49
  Speaker 1: to say that for the next century. We just put
• 19:51
  Speaker 1: out a stop light green lights in China for life science, innovation,
• 19:56
  Speaker 1: yellow lights, red lights here, price controls, debates about IP cutting,
• 20:00
  Speaker 1: FDA and ih staff. However you want to look at it.
• 20:03
  Speaker 1: We're not giving innovators here a massive green light. How
• 20:07
  Speaker 1: does China factor into your view in the world now
• 20:10
  Speaker 1: that the idea that they're just me too copiers seems
• 20:13
  Speaker 1: to be fading and people are wising up. There's real
• 20:16
  Speaker 1: science there, there's real investment there. How do we keep
• 20:19
  Speaker 1: that at bay? Not by building walls around China, but
• 20:23
  Speaker 1: propping up we.
• 20:25
  Speaker 5: Can be our society their closed society only lets the
• 20:30
  Speaker 5: innovate to a certain extent, and then they when they can't,
• 20:33
  Speaker 5: then they steal our intellectual property and move on from there.
• 20:38
  Speaker 5: We have to get out of the way. We have
• 20:41
  Speaker 5: to understand the FDA is the gold standard for bringing
• 20:46
  Speaker 5: a drug or a therapy to market. We have to
• 20:50
  Speaker 5: we have to realize that we impose. It's amazing to
• 20:55
  Speaker 5: me that we can impose so many kinds of requirements
• 20:59
  Speaker 5: on our industry and still compete at any level. Imagine
• 21:03
  Speaker 5: what we could do if we right size the regulation,
• 21:06
  Speaker 5: streamline the regulations with an eye towards eliminating every barrier
• 21:12
  Speaker 5: where China has an artificial advantage, and there's a lot
• 21:15
  Speaker 5: out there, there are some that we're just going to
• 21:17
  Speaker 5: patient that the clinical trials, the sorts of things we
• 21:21
  Speaker 5: do from the promising molecule to a new drug application
• 21:25
  Speaker 5: to investigational new drug to clinical trials to bringing something
• 21:28
  Speaker 5: to market. We're going to continue to maintain our position
• 21:31
  Speaker 5: as having the gold standard, but we should remove every
• 21:35
  Speaker 5: piece of fat and every unnecessary regulation, every checkpoint along
• 21:40
  Speaker 5: the way so that we don't have the pacing thread
• 21:43
  Speaker 5: of China, and we do have a pacing threat. They
• 21:44
  Speaker 5: are innovating now AI takes that to another level. They're
• 21:49
  Speaker 5: not as creative of a culture as we are, but
• 21:51
  Speaker 5: AI kind of even normalizes some of that.
• 21:56
  Speaker 3: It will be a space to watch.
• 21:58
  Speaker 1: I feel like one of the reasons we have barriers,
• 22:01
  Speaker 1: I mean, you lay it out so clearly, Hey, barrier here,
• 22:04
  Speaker 1: get it out of the way. That's why North Carolina
• 22:06
  Speaker 1: was great, That's why the US can be great. One
• 22:09
  Speaker 1: of the reasons I think people don't rush to remove
• 22:12
  Speaker 1: barriers is they don't believe in this industry. And how
• 22:19
  Speaker 1: do we I've got you here, I got two more questions.
• 22:24
  Speaker 1: How do we change the narrative about this industry? So
• 22:26
  Speaker 1: your peers are saying, what can we do to champion
• 22:30
  Speaker 1: this thing that we're so damn good at? That's not
• 22:34
  Speaker 1: the narrative I get when I walk into an office
• 22:36
  Speaker 1: in Washington, I get to go sit, go sit in
• 22:38
  Speaker 1: the corner a little bit.
• 22:40
  Speaker 3: How do we change this?
• 22:41
  Speaker 1: I don't know.
• 22:41
  Speaker 5: It really blows because some of this is just cheap
• 22:44
  Speaker 5: shot politics. Right.
• 22:46
  Speaker 2: It's vogue to.
• 22:49
  Speaker 5: Attack pharmaceutical companies. You know, they're all a bunch of
• 22:52
  Speaker 5: rich charging too much money. It's easy to create a
• 22:56
  Speaker 5: promising new drug and there's no risk and getting it wrong.
• 23:01
  Speaker 5: You know, it's just absurd to me how simple minded
• 23:03
  Speaker 5: people are and looking into this industry. But I think
• 23:05
  Speaker 5: a part of what we have to do is probably
• 23:07
  Speaker 5: do a better job. And I keep on emphasizing the
• 23:11
  Speaker 5: value chain for healthcare what we end up doing right now.
• 23:15
  Speaker 5: You know, the good news for the pharmaceutical companies is
• 23:18
  Speaker 5: right now the healthcare debate is everybody's flogging. The insurance
• 23:20
  Speaker 5: companies don't get back to you. They're in banking because
• 23:24
  Speaker 5: you're all big and you're bad. But I think we
• 23:28
  Speaker 5: need to do a better job of explaining just how
• 23:30
  Speaker 5: transformational our life science industry has been to the world
• 23:36
  Speaker 5: and how many untold billions of lives. Excuse me, I've
• 23:40
  Speaker 5: been saved to American innovation number one. We've all got
• 23:44
  Speaker 5: to tell a better story, y'all. Do you know the
• 23:45
  Speaker 5: industry does a pretty good job, but you've got to
• 23:47
  Speaker 5: keep forcing it. But I think the underlying frustration is
• 23:51
  Speaker 5: why does it keep on costing so much?
• 23:54
  Speaker 2: When I get sick?
• 23:56
  Speaker 5: And instead of this simplistic insurance companies are to blame,
• 24:01
  Speaker 5: pharmaceutical companies are the blame. PBMs are to blame, hospitals
• 24:05
  Speaker 5: are to blame. Understand even those industries are the gold
• 24:08
  Speaker 5: stand I don't know why we keep flogging the envy
• 24:11
  Speaker 5: of the world versus saying, how do we get these
• 24:14
  Speaker 5: gears working better and figure out how to maintain or
• 24:18
  Speaker 5: have a downward trend on the underlying cost of healthcare.
• 24:21
  Speaker 5: What I've tried to tell everybody wants to go in
• 24:24
  Speaker 5: and give life science as a haircut, or insurance companies
• 24:29
  Speaker 5: a haircut. I said, the problem as you are all
• 24:30
  Speaker 5: wanting to shave their heads, Let's get them all in
• 24:33
  Speaker 5: the barbershop and give them all a nice trimp. There's
• 24:36
  Speaker 5: clearly money to be saved there in an exchange for
• 24:40
  Speaker 5: being able to reduce costs. One of the key things
• 24:42
  Speaker 5: that you can do to reduce the out your cost
• 24:45
  Speaker 5: of anything is to provide that industry some level of certainty.
• 24:49
  Speaker 5: Otherwise they're constantly reserving for the risk, and that is
• 24:53
  Speaker 5: the root cost for some of the increases in healthcare.
• 24:56
  Speaker 1: That last point there, I've struggled to come up with
• 24:59
  Speaker 1: a better term of there has to be fat.
• 25:01
  Speaker 3: In the system.
• 25:02
  Speaker 1: And let me tell you, going into a progressive's office
• 25:04
  Speaker 1: saying yeah, don't do that. It's got to be fat
• 25:07
  Speaker 1: in the system.
• 25:08
  Speaker 4: But I think you're absolutely right that it's margin if
• 25:12
  Speaker 4: if you don't have look at going back to me
• 25:15
  Speaker 4: being an R and D manager, I only had so
• 25:17
  Speaker 4: much budget that I could that I could deploy the
• 25:20
  Speaker 4: research and development, had to manufacture, had a market, had
• 25:23
  Speaker 4: to do all the other things to bring a product
• 25:24
  Speaker 4: to market.
• 25:26
  Speaker 5: And I just think it's being smart and and reserving
• 25:33
  Speaker 5: and recognizing when when you have a narrative in Congress
• 25:36
  Speaker 5: about a shoe about to drop, you've.
• 25:39
  Speaker 2: Got to reserve for that risk.
• 25:41
  Speaker 5: If you have an impending tax it's about to come
• 25:43
  Speaker 5: in an mfn UH negotiation with the US the administration,
• 25:50
  Speaker 5: you got to reserve for the risk. At the end
• 25:52
  Speaker 5: of the day, you have a responsibility to your investors,
• 25:55
  Speaker 5: a fiduciary responsibility to your shareholders to reserve for that risk,
• 26:01
  Speaker 5: and that the money's got to come from somewhere. And
• 26:06
  Speaker 5: if you can't provide a longer term runway for certainty,
• 26:11
  Speaker 5: that's what you're going to get a premium for what
• 26:12
  Speaker 5: you're receiving today.
• 26:14
  Speaker 1: That is as well put as we've had it on
• 26:16
  Speaker 1: the podcast. I cannot have Senator Tom Tillis on a
• 26:20
  Speaker 1: podcast in twenty twenty five without closing on something that
• 26:24
  Speaker 1: has nothing to do with life sciences.
• 26:25
  Speaker 3: Maybe I don't know.
• 26:26
  Speaker 1: You tell me you have announced you're not going to
• 26:29
  Speaker 1: seek reelection in the Senate. You are one of the
• 26:33
  Speaker 1: big thinkers in United States politics and policy.
• 26:37
  Speaker 3: What is next for Tom tillis I'm.
• 26:39
  Speaker 5: Going to keep innovating. I'm going to you know, I'm
• 26:44
  Speaker 5: going to go back into business. I don't know, I'll focus.
• 26:48
  Speaker 5: I'd like to scratch the edge. I think I've finally
• 26:50
  Speaker 5: concluded that I can't really do what i'd love to
• 26:53
  Speaker 5: have in my portfolio, some sort of really complex, nitty
• 26:57
  Speaker 5: gritty business turnaround something like that. Probably, maybe at the
• 27:01
  Speaker 5: age of sixty five, need to realize I can't put
• 27:03
  Speaker 5: all my eggs in one basket.
• 27:04
  Speaker 2: But I love business turnaround work.
• 27:07
  Speaker 5: I love taking a promising company to the next level,
• 27:11
  Speaker 5: doing that kind of stuff like I did as a
• 27:12
  Speaker 5: partner of Price Waterhouse. But probably factor a focus a
• 27:16
  Speaker 5: little bit online life sciences. It's important to me banking
• 27:20
  Speaker 5: financial services. I got to find a home. But I've
• 27:22
  Speaker 5: got three hundred and ninety eight days to do this
• 27:24
  Speaker 5: job before I got to focus on that.
• 27:26
  Speaker 3: Yeah, you're walking around with a calendar floating by behind
• 27:28
  Speaker 3: your head.
• 27:29
  Speaker 2: It's actually a widget on my homepage on my phone,
• 27:31
  Speaker 2: but it's just.
• 27:32
  Speaker 3: The first thing you get to see.
• 27:33
  Speaker 2: But you know what I tell everybody, I have a project. Guy.
• 27:36
  Speaker 5: I am not counting the days until I leave the Senate.
• 27:40
  Speaker 5: I am mindful of the number of project days I
• 27:42
  Speaker 5: have left to get things done, to get para done,
• 27:45
  Speaker 5: to maybe get prevailed.
• 27:47
  Speaker 2: Yeah, there are a lot of.
• 27:48
  Speaker 5: Legislative outcomes that I am optimistic that if I remain
• 27:52
  Speaker 5: focused and I'm mindful of the amount of time I
• 27:54
  Speaker 5: have left that I'm going to get done, then I'll
• 27:56
  Speaker 5: go figure out what to do at the ripe age
• 27:58
  Speaker 5: of sixty six.
• 27:59
  Speaker 1: Prevail epic, no price controls codified.
• 28:05
  Speaker 3: You do that?
• 28:05
  Speaker 2: You know, that's just one committee ext I'm hot for.
• 28:10
  Speaker 1: I am incredibly grateful we got to get you up
• 28:12
  Speaker 1: to Washington so you can close out the year. Thank you,
• 28:15
  Speaker 1: Senator Tom Tillis for taking time to be with us today.
• 28:17
  Speaker 2: Thank you.
• 28:19
  Speaker 1: That's it for another episode of the Making Medicine podcast.
• 28:23
  Speaker 1: Thank you to Senator Tom Tillis for taking time out
• 28:26
  Speaker 1: of his way heading up to Washington to get to
• 28:28
  Speaker 1: work on so many of the issues we talked about
• 28:30
  Speaker 1: here as the year begins to wind down. I also
• 28:33
  Speaker 1: want to say thank you to the incredible team at Incubate,
• 28:35
  Speaker 1: without whom the Making Medicine podcast would not be possible.
• 28:39
  Speaker 1: Our head of public Affairs, Grace Moster, as well as
• 28:41
  Speaker 1: our policy director John Guy. We also have an incredible
• 28:45
  Speaker 1: production team based here in Charlotte, North Carolina that makes
• 28:48
  Speaker 1: all these episodes possible. Given all the great information and
• 28:52
  Speaker 1: even a little pot stirring that Senator Tillis did on
• 28:54
  Speaker 1: today's episode, it only seems fitting to give him the
• 28:58
  Speaker 1: closing lines of Making Medicine.
• 29:00
  Speaker 3: As always, keep innovating,