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