The Biotech Bargain: How Patents Help Turn Risk Into Medicine

Do patents make drugs more expensive? And what role does intellectual property play in getting new medicines from the lab bench to patients?

The questions have never been more timely. Biopharmaceutical innovation sits at the center of some of our biggest public policy debates. Drug pricing, access, generic competition, university research, venture funding, AI-driven discovery, follow-on research, and the future of biotech startups. And in the middle of those debates, patents are often reduced to slogans like patent monopolies and ever-greening and are assigned the political blame for high drug prices and limited patient access to medical breakthroughs.

But the real system is much more complicated. Modern drug development is extraordinarily expensive, uncertain, regulated, and risky. A promising discovery may begin in a university lab, move through a startup, require venture financing, depend on partnerships with larger pharmaceutical companies, survive years of clinical testing, and then still face manufacturing approval, reimbursement, safety monitoring, and market adoption hurdles.

Along that path, intellectual property is not just a prize at the end. It can be the asset that allows investment, collaboration, disclosure, licensing, specialization, and commercialization to happen in the first place. At the same time, the public has a legitimate interest in access, affordability, competition, and generic entry. So the policy challenge is understanding how the system works, what incentives are actually doing, and what can go wrong when lawmakers, courts, and pundits oversimplify the trade-offs.

This is a big conversation, but the through line is simple. If we want more medicines, better medicines, and broader access to medicines, we need to understand the innovation system clearly before we start rewriting the rules.

** Special Guest: Dr. Bo Heiden **

To help us truly understand the critical role of patent protections in the biopharmaceutical ecosystem and what prevailing narratives mean for investors, startups, and biotech R&D, we’re sitting down with Dr. Bo Heiden, one of the leading thinkers working at the intersection of intellectual property, innovation strategy, and life sciences policy. Dr.  Heiden is the co-director of the Eira Initiative, a project out of the Berkeley Policy Institute, the Executive Director for the Tusher Strategic Initiative for Technology Leadership at Berkley’s Haas School of Business, the Co-Director of the Center for Intellectual Property (CIP) at University of Gothenburg, and the Co-Chair of the Technology, Innovation, and Intellectual Property program at the Classical Liberal Institute at the NYU School of Law.

** Episode Overview **

⦿ Drug price and access concerns, as they pertain to patents.
⦿ The economic realities that make drug development a uniquely risky investment problem.
⦿ The CliffsNotes history of why the modern biotech system emerged so strongly in the United States.
⦿ What policymakers often miss in narratives around evergreening and patent monopolies, and how those narratives may now be pushing policy in directions that could undermine the very startup and R&D ecosystem we all depend on for advancements in medicine.
⦿ The Supreme Court’s recent Hikma decision and what it means for skinny labels, induced infringement, and generic competition.
⦿ Practical takeaways on two of the hottest areas in the market: AI-driven drug discovery and the evolving GLP-1 regulatory and generic landscape.

** Mossoff Minute: America's 250th and the Democratization of Invention  **

In this month's Mossoff Minute, Professor Adam Mossoff discusses the democratization of invention sparked by American independence.

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Transcript

​[00:00:00]

Josh: Good day, and welcome to the Patently Strategic Podcast, where we discuss all things at the intersection of business, technology, and patents. This podcast is a monthly discussion among experts in the field of patenting. It is for inventors, founders, and IP professionals alike, established or aspiring. And in this month's episode, we're talking about one of the most important and most misunderstood questions in innovation policy.

What role does intellectual property play in getting new medicines from the lab bench to patients? This question has never been more timely. Biopharmaceutical innovation sits at the center of some of our biggest public policy debates. Drug pricing, access, generic competition, university research, venture funding, AI-driven discovery, follow-on research, and the future of biotech startups.

And in the middle of those debates, patents are often reduced to slogans like patent monopolies and evergreening and are assigned the political blame for high drug prices and limited patient access to medical breakthroughs. [00:01:00] But the real system is much more complicated.

Modern drug development is extraordinarily expensive, uncertain, regulated, and risky. A promising discovery may begin in a university lab, move through a startup, require venture financing, depend on partnerships with larger pharmaceutical companies, survive years of clinical testing, and then still face manufacturing approval, reimbursement, safety monitoring, and market adoption hurdles.

Along that path, intellectual property is not just a prize at the end. It can be the asset that allows investment, collaboration, disclosure, licensing, specialization, and commercialization to happen in the first place.

At the same time, the public has a legitimate interest in access, affordability, competition, and generic entry. So the policy challenge is understanding how the system works, what incentives are actually doing, and what can go wrong when lawmakers, courts, and pundits oversimplify the trade-offs.

To help us truly understand the critical role of patent protections in the biopharmaceutical ecosystem [00:02:00] and what prevailing narratives mean for investors, startups, and biotech R&D, we're sitting down with Dr. Bo Heiden, one of the leading thinkers working at the intersection of intellectual property, innovation strategy, and life sciences policy.

Bo lives and breathes this space like few others on the planet. He's the co-director of the Berkeley Policy Institute's ERA Initiative, a nonprofit applied policy research initiative that seeks to ground innovation policy in the biopharmaceutical, medical device, and life sciences industries in fact-based and economically informed analysis that moves beyond narrative, rhetoric, and anecdote.

Bo also serves as the executive director at the Tepper Strategic Initiative for Technology Leadership at Berkeley's Haas School of Business, is the co-director of the Center for Intellectual Property at the University of Gothenburg, and the co-chair of the Technology, Innovation, and Intellectual Property Program at the Classical Liberal Institute at the NYU School of Law.

Previously, he was a visiting professor at UC Berkeley and the innovation [00:03:00] director for the Qatar Science and Technology Park, where he was responsible for driving innovation strategy and intellectual property policy. Over the past 10 years, Bo has also managed over 100 innovation projects with industry, university research institutes, healthcare providers, and startup ventures

Throughout this conversation, we'll cover drug price and access concerns as they pertain to patents, the economic realities that make drug development a uniquely risky investment problem, the CliffsNotes version of why the modern biotech system emerged so strongly in the United States, what policymakers often miss in narratives around evergreening and patent monopolies, and how those narratives may now be pushing policy in directions that could fully undermine the very startup and R&D ecosystem we all depend on for advancements in medicine. We'll also get into the Supreme Court's recent Hickman decision and what it means for skinny labels, induced infringement, and generic competition.

And then we'll close with practical takeaways on two of the hottest areas in the market, AI-driven drug discovery and the [00:04:00] evolving GLP-1 regulatory and generic landscape. This is a big conversation, but the through line is simple. If we want more medicines, better medicines, and broader access to medicines, we need to understand the innovation system clearly before we start rewriting the rules.

Now, before jumping in with Bo, we'd like to take you to the next installment of the Mossoff Minute, a monthly segment that builds on our Patent Wars episode. It features short conversations with Professor Adam Mossoff, providing updates and quick takes on movements in patent reform, significant court rulings, innovation policy happenings, and occasional Star Wars references.

Adam Mossoff: It's an important and exciting year with the 250th anniversary of the foundation of our country – the first country in human history, founded on the ideals of individual rights, the rule of law, limited government, and free markets has led to an incredible flourishing society. The city on the hill that is aspirational to the rest of the world.

We often forget, though, that the patent system was very much part of this break from England, a break from royal privilege [00:05:00] grants of relationships with the crown and with the leaders and the powers of various countries. America took very seriously that all men are created equal and therefore everyone should have access to these vital property rights.

They believed this. They applied it also to the protection of patents by recognizing that patents and copyrights should be secured in the Constitution.

The very first time in human history that a country's constitution recognized the protection of these important intellectual property rights, and that these should be accessible to all people as property rights. This has been called the democratization of invention.

This is what leads to people like Thomas Edison and Alexander Graham Bell and all of those incredible innovators that we learn about in school that form the foundation of our flourishing society, our explosive growth in our innovation economy, and the model that the United States has become for the rest of the world over the past 250 years, and hopefully for even more centuries to come.

Josh: Thanks, Adam. We're [00:06:00] also publishing clips from the Mossoff Minute as short-form videos on Instagram Reels, YouTube Shorts, and TikTok. You can check out these shorts and follow us at Aurora Patents on all three platforms.

.

Thrilled to have you here today, Bo. Uh, we are big fans of anybody out there who's deep in the trenches and, and tirelessly fighting the good fight on behalf of innovators who are all too often finding themselves in a David and Goliath kind of battle, but unfortunately with a broken slingshot.

So, so thanks for doing what you do, and, and thanks for joining us today

Bo Heiden: No problem. I'm tall, so I, I struggle in a trench. I gotta really bend over uh, miss the fire, so

Josh: To send you a helmet. So I would like to start a little ab- with, um, your background and, and your current focus. So could you, um, just start by telling us a little bit about your work at the Berkeley Policy Institute, uh, and the AIR Initiative, and what drew you away from professional European basketball and into the wild world of biotech innovation [00:07:00] policy, just in case that's not an obvious career transition for anyone listening?

Bo Heiden: You mean it's not a straight line? Yeah, I've

Josh: It's not, I don't think that's a ... No, no

Bo Heiden: Well, uh, the Berkeley Policy Institute is, uh, is an initiative that was created by, um, David Thies, who's the famous, uh, scholar entrepreneur from UC Berkeley. Um, you know, j-just to, to tackle things, um, like these issues in, in, you know, with a em-empirical focus, but also to support, uh, interdisciplinary activity.

You know, and universities talk a lot about interdisciplinary work, but we all like to run off to our own departments. So creating institutes like the Berkeley Policy Institute sometimes makes it easier to draw all these different groups together, I enjoy. I, I have a background in engineering and technology management and economics, and sometimes I play a lawyer on TV, so I, um, I hang out with a lot of them. Um, so I try to-- I, I, I like to all this together, and [00:08:00] this is definitely what we try to do at the ERA Initiative, which is really to ground innovation policy relation to biopharma or, or medical devices in the life science industry in general, fact-based, economically informed, um, analysis. We want to move beyond the narrative and the rhetoric and the anecdote, you know, that as you know, those travel very quickly and very easily. It takes a lot of effort to bring out the facts and, and get them on a higher ground. And I think in today's world, we need that even more than ever

Josh: Yeah, for sure. And it's a, it's a huge challenge to, you know, tackle that 'cause those, those sound bites are, are, are quick and quippy, and they do travel very well. Um, and the, the data is sort of, you know, harder to package in the digestible format to, to combat it. So it is, it is very much, it is very much an uphill battle.

But that is... It's actually a good transition. This is, this is just a side note, um, not so much of a question here, but, uh, you know, in my show prep, I also read that you're the co-director of the Center for Intellectual [00:09:00] Property at the University of, of Gothenburg. Um, uh, one of your many titles. I actually don't know when you, when you sleep, but, um, you know, keep up, keep up the good work.

Uh, but the... I, I read that the mission there is to transform knowledge into wealth and welfare, and I just wanna let you know that I, like, I, I love that. I think that is truly one of the, one of the most succinct descriptions that I've ever read on the f- on the fundamental purpose of, of patents, right?

Like, we're gonna be, we're gonna be publishing this episode ahead of the Fourth of July, and we always try to take this time of year to, you know, highlight and, and draw attention to how, you know, the US Constitution really democratized innovation when it gave individuals the ability to tokenize the fruits of their mind and turn those into transactable property rights, and, and the explosive growth of, of innovation that ensued, um, you know, on a scope and scale of the world it, it just never seen before.

And, uh, you know, we did a great podcast with Professor Masoff on this. But, um, you [00:10:00] managed to nail that in six words, transform knowledge into wealth and, uh, welfare. That's, that's wonderful. Bumper sticker that, T-shirt it, you know, use that, use that everywhere. It's...

Bo Heiden: You're right. I

Josh: You really should, you really sh- It should

Bo Heiden: I have to say that I-- we've been around for 25 years at SIF and, uh, you know, you always revisit your branding and your, and your, you know, mission statements and whatnot. I've always liked that one because it does hit at the, the heart that, you know, knowledge is the most important resource, but it's not that easy create and, and control and generate value out of.

So, um, you know, that's why you need intellectual property force this to happen. And it's-- it does take a little bit of thought to see the link there, which we'll get into today,

Josh: Yeah. Yeah, for sure

Bo Heiden: think blocking people from things is bad, but not when, when the thing wouldn't exist without this exclusivity, right?

So

Josh: Yes. Ab-abs-absol-absolutely.

Bo Heiden: On a bumper sticker as easily.

Josh: No, I don't. But [00:11:00] hey, that whole, you know, transform knowledge into wealth and whatever, you, you know, you could be, you could be transforming, uh, that mission statement into, into wealth maybe. Uh, tokenize that guy. So, um,

I just realized that, um, I cut you off before you explained how you were able to make the transition from professional European basketball into life science innovation policy, and I wanna make sure that I can fuse that, uh, fuse that back in so it didn't s- like, seem like I steamrolled over that

Bo Heiden: yeah. That's-- Yeah, it's a good one. I joke about that. usually give a joke that says, "I used to play professional basketball, that's why I'm so tall." It's, uh... You can see people like, "That's not the right direction." I'm like, "Yeah." But,

Josh: Is that the right? Great

Bo Heiden: yeah, it's, um, it's not normal. But I tended to be much more of an academic person when I was young.

I just grew very tall, and I, I liked to compete. um, so I, I got pretty good at basketball. And when I was in college, I decided, well, I was, I was good, but I was... How do you say? [00:12:00] I couldn't defy gravity enough, so I wasn't able to play in the NBA. So I went to Europe to play, which was great. I got to visit different places and meet different people, live in different countries and, and, uh, and be competitive and... But, um, because I played basketball in college while I went to school, I liked this mix of, you know, physical activity and, and studying. And I, I studied electrical engineering to begin with. Um, so then I did, um, I did a master's degree while I was playing in Sweden and a Ph... And started my PhD while I was still playing in technology management and economics, focusing on, um, the knowledge economy, And how we transform knowledge into wealth and welfare, like we talked about.

Josh: Mm-hmm.

Bo Heiden: So yeah. So the, the body starts to fail, and then I had to lean back on the brain.

But that's a little bit of the story. It is unusual but, uh, for me, I like doing both. And as I get [00:13:00] older, I, I miss the competitive basketball. I think that's-- I think everyone who re- from the sport feels that way.

Josh: I think I, I think I heard somewhere that you, you, uh, you had a pretty sweet jump shot that, um, some, some, some point you referred to yourself as a p- poor man's Larry Bird.

Bo Heiden: Yeah, that's what pe- people wanna say, "Well, how did you play?" I'm like, I was like a poor man's Larry Bird." Like, uh, the triple-double type thing before everyone could do it. And, uh,

Josh: Mm-hmm

Bo Heiden: and, uh, maybe it's, I say to the young people now, a poor man's, uh, Dončić. But now, now that, you know, like Jokić is the kind of bigger guy that could pass and stuff, he's great. I tried to play like that when... not as good as him, but he, but that type of style. But now a lot of people do it, so everyone's shooting three-pointers. I used to be a big guy shooting threes was, you know, incredible. Now it's no big deal. So that's the game, the game changes, right?

Josh: So, you know, innovation policy landscape is wide and, uh, as you know, its needs are many.

Uh, [00:14:00] and, uh, it's a very long list, right? Enablement, eligibility, injunctive relief, efficient infringement, the PTAB. Uh, you have a very well-funded lobby and narrative machine that's, you know, fueled by the, the big tech companies that are trying to burn the ladders that they used to climb up on. Uh, you know, the list goes on.

Why focus on biopharma, med devices, and life sciences and, you know, what gap in the current life science innovation policy landscape is, uh, Aera trying to fill?

Bo Heiden: That's a good question. I, I, I... You know, when you, when you talk about biopharma, you're talking about healthcare, right? People's health and wellbeing, their longevity. Th-this is very important. I know I, I, I like my iPhone and, uh, telecommunications, but, uh, something-- this is actually hits much deeper. And you can see that this is, you know, all the, all the other technology issues are discussed in policy, but healthcare, the cost of healthcare, access to healthcare, innovation, all this stuff really, can resonate with that.

And, [00:15:00] and so I think-- So biopharm innovation is, you know, critical for both health outcomes and economic development, right? So in the US, we lead, in our healthcare out-outcomes in many, in many regards, and we also, um, the pharma section, the biopharma is a economic leader as well. And the thing that really pushed me there was that, um, policymakers are being subjected to an intense, I would say, anti-patent narrative, and that's dangerous in this area, right? It's one thing to argue about patents on your iPhone, it's another thing to argue it about on the drugs that you need, right? And so at one time when I was in DC a few years ago, there were billboards up on the bus stops that said, "Patents kill." And this was related to patents on, on pharmaceuticals. I would argue that patents save. and I don't think that the people that believe that patents kill are bad people. I, I just think they don't understand that without the patents system for a limited [00:16:00] time, um, exclusivity, that the drugs that save people's lives wouldn't exist in the first place. And that little bit of extra thinking there still seems to be difficult to get out into the public, but it means so much.

So we need this kind of rational policy discussion. Um, this is a very important mission. And so basically, um, we're here to be the voice of reason, to, um, supported by empirical evidence and to see whether the, the evidence and this logic can outdo the, you know, the narratives and the anecdotes.

Josh: So speaking of, um, you know, I, I think that there's a lot that we can build on from, you know, everything we've sort of talked about here, and I think we're gonna keep coming back to a lot of this and, and going deeper on what you just hit on. Um, but I wanna lay some, some really important foundation around what you, what you just said in terms of some of these narrative pieces, specifically for dealing with the drug elephant in the room, right?

So, you know, [00:17:00] we do a lot of inventor education, a lot of talks on reform and policy, but nothing, and I mean nothing gets the general internet public riled up in comments like when we do stuff on drug patents and, and pricing. So, you know, a, a lot of listeners hear drug patents, and they immediately think, you know, "This is why drugs are imp- are expensive, so maybe if we didn't have drug patents, then, you know, drugs would be more affordable."

And, you know, maybe in a vacuum that's not entirely i-irrational. I certainly see it, people s-saying it a lot, hear people saying it a lot. But it's missing some incredibly important context that I'm hoping you can help us with.

Bo Heiden: Okay

Josh: Before you can even, you know, begin to debate whether patents make drugs expensive, I think you have to understand why drugs are investable at all.

So let's, let's tackle some of the economic realities that make drug development different. Why, why is drug development a uniquely risky investment problem? How does the biotech innovation model differ from, you know, [00:18:00] software and consumer products like you were talking about or other technology sectors?

And why are IP protections so important in life sciences?

Bo Heiden: No, those are really important points. I, um, th-there is a lack of an advocate for the drug that doesn't exist, right? You know, so there, there's an advocate for the drug that does exist that's somewhat expensive now, even though in a few years it'll be cheaper, much cheaper and cheaper for the rest of humanity. There isn't an advocate for-- know, it's a little bit like, know, like a magic trick if you said, "Would, would you like this drug to be cheap right away as soon as it's approved?" And people would say yes. Ok- whoop, and then it disappears. Okay. exist anymore. So, so the, the bargain wasn't made from the very beginning, right?

If you, told people that we're thinking of developing a drug, it's gonna be very risky, it's gonna cost a lot of money, we're gonna fail a lot of times, and, you know, ha-having to wait that many years for return on investment sometimes-- I think the GLP-1 [00:19:00] drugs took fourteen years to be-- to hit the market.

Uh, that is not a very easy private investment model. So to do that, you need to be able to have these types of exclusivity, and people wouldn't have g-gone into this, um, incredible opportunity or, um, activity had they not known that, that they would have some type of exclusivity that would require some time for payback before then it would become available.

And I think if people were asked in the beginning, "Do you want us to continue that it will cost a bit for a while?" Everyone would say yes, but that's not where they're discussing it. They're discussing it at the point when it's right there in front of you and, and, and that creates a bias in people's thinking, right? And it's completely, it's completely understandable. It's not the same for software. The software doesn't usually have the same sunk costs. Um, it doesn't have the same, um, risk. It is risky, but not the same. You can, you can change it rather easily. You know, you [00:20:00] talk about m-minimally viable products. Put it out there, customers get feedback, you change the code.

This is not how it's going to happen. You have to put a lot of money in. you're gonna have a lot of, uh, dead wells, so to speak, you have to get through a lot of, uh, clinical trials. And so it's a completely different animal from, from this, um, from, the, you know, not necessarily telecom, but definitely from the software space. And you see it, you know, if you ask in studies, you know, people who do software-related, IT-related products don't necessarily rank patents as being, being very important, where uh, with pharmaceuticals, it's, um, it's existential.

Josh: Yeah, I, I read somewhere, you know, with the, with the risk, the high R&D costs, the long development timelines that, um, you know, that patents turn fragile scientific possibility into a financeable asset. I was like, "Yeah, that's, uh, that's a good way to, a good way to look at it." Uh, I was doing a little bit of research on this [00:21:00] and, you know, like everything, the estimates are all over the place.

But, um, when you include, you know, cost of field programs and, uh, you know, cost of capital over a decade plus, you know, development timeline, the, the average investment required to bring one successful drug from discovery to launch is estimated to be somewhere between $2 and $3 billion. Right? Um

Bo Heiden: Yeah, it's, it's incredible, isn't it? And, uh, so to put, put that money out as risk capital either within a firm or, in relation to, um, startups, uh, with the, with the return on investment so far, so far in f- uh, ahead, it's incredible that we found a way to make it work. And I think that's again, we have to appreciate that, know, the drug is there, why can't it be cheap?

The-- we have to appreciate the effort and all the institutional mechanisms that have gone into place to allow this to work, because it has worked, you know, magnificently well. We take it... tend, as humans, I think we [00:22:00] like to take things for granted a bit, don't we? And it's a little hard to get into the details of this, but I think to appreciate it, you have to understand a bit of the details

Josh: Yeah, for, for sure. And, you know, you were, you were alluding to this earlier, but, you know, who's, who's gonna, who's gonna fund this at scale if a successful product's gonna be copied immediately after they're approved, right? I mean, who's, who's gonna invest $2 or $3 billion into R&D when something can be taken for nothing at the, you know, at, at the, at the last stop?

It's crazy

Bo Heiden: that's why the IP system is so existential. You know, um, Elon Musk, he said that patents are for the weak in that famous, uh, clip with Jay Leno. And, uh, he didn't mean it in-- He didn't mean it in a good way, but in reality, he's correct. You know, the-- You are in a weak position if you've invested a lot of money and the thing that you have created, once known, can be easily imitated. Even strong pharma co-companies would be in a weak position without the patents. Definitely startups would be. So, [00:23:00] um, so it's necessary in order to bring-- You know, the patents bring, uh, the new pharmaceuticals to life, right?

Josh: Yeah

Bo Heiden: And then, and then we can have an argument about who should pay, for it, for this and how that should be done.

But let's first acknowledge the fact that without the patent system, we wouldn't have many or most of the life-saving drugs that we have.

Josh: Yep, yep, yep. Yeah, I agree. Um, I love that take on the, on weaker, on weaker patents. I was actually, uh, sort of in a similar conversation with, um, Professor Masoff the other day about, about some of this, uh, you know, the Hickman decision and everything. And, and I said that, you know, the, the new, the new weaker patents I think needs to be, you know, posing the question like, do drugs, uh, do patents make drugs more expensive?

Uh, you know, and the answer is yes, but only in the context that they make them exist in the first place, right?

Bo Heiden: Right

Josh: know, and the cost for a product that exists will always be higher than a cost for a product that does not, uh...

Bo Heiden: Yeah, it's an infinite cost, isn't it then? And

Josh: yes

Bo Heiden: you know, it's not [00:24:00] for a long period of time.

Josh: Yep

Bo Heiden: but if you're, you know, if you're in that window and you heard there was a new drug in relation to a condition that you have and it's expensive, I can understand why people the way they do. It's not irrational, right?

Josh: Yeah.

Bo Heiden: so wh-

Josh: right

Bo Heiden: why we have to work explain to people to understand and, and, and that we're, you know, we're all in this together to try to do this in the best possible way

Josh: Yep, yep, yep, 100%. 

So, you know, one of your goals at, uh, at AIR as you mentioned, is to ground innovation policy in fact-based and economically informed analysis. And, uh, uh, I think we could benefit from more of that, uh, actually in all parts of life, but, uh, especially in our, you know, public discourse around patents.

And, uh, you know, history can be a really great teacher in that analysis. Um, in our, in our Why Patents Exist episode, you know, we talk about how the, you know, the chem revolution started in Germany in the 19th century, but pharma revolution shifts to the US. Industrial revolution starts in England, [00:25:00] but shifts to the US.

Computer revolution doesn't shift anywhere, starts in the US, and so does the biotech revolution. Can you sort of give us the CliffsNotes history of the modern US biotech system, and the critical ingredients that allowed it to take root and flourish?

Bo Heiden: I knew you were gonna ask me this, so I did prepare a little bit. And, uh,

Josh: Great

Bo Heiden: down a few, uh... It's hard to get a long list, right? Because there is no real silver bullet one at a time. You know, it takes a bit of things to come together.

Josh: Sure

Bo Heiden: But certainly, you know, one, one of the key things is that the US built probably the world's deepest biomedical science base. You know, and the, the NIH was created after World War II. We've spent quite a lot of money, is an issue nowadays, right? In, in supporting basic research. And, um, so the US didn't just fund applied development. Um, it funded the scientific, what you call like the substrate from which drug targets and platforms and biomarkers and spin-outs come out of.

You know, it's the [00:26:00] same for, um, the COVID-19 vaccine. You know, the reason it went so quickly is because a lot of work had already been done, right? By the time we needed it. And, and, and so a lot of that work is facilitated by a mixture of, um, government spending on basic science and also, um, the ability to take it to market because of the patent system that gives vent- venture funding for startups and also gives incentives for large companies on this, uh, these platforms, technologies that can be used in lots of things. Which is, you know, whatever people think about the vaccine, you really can't hate mRNA technology. I mean, it's silly if you have some political idea about the vaccine. is gonna cure a lot of people, probably a lot of people's family members. you know, we need to put more money into these types of things.

They, they really work well. All right. So you can see I've slowed-- I'm never gonna get through the list at this pace. 

So, um, [00:27:00] and of course, we had the, we had the Bayh-Dole Act that, that allowed for a lot of this, um, uh, basic research that took place in universities to be licensed. Um, we, um-

Josh: Because, because in, because pri-prior to that, there was no certainty around ownership, right? Of, of things that were developed in, in university. So like the pathway from university to marketplace was like very sort of uncertain from an, an, an investment perspective, right?

Bo Heiden: Yeah, it was the-- yeah, the ownership was uncertain and the management of it was stayed with the government. And so there was almost, again, this idea that no one wants to invest in something that they don't know exactly what are the terms, the ownership and the terms. So giving the ownership to the universities allowed for structures to be put in place could make this more certain and, and, even though it is-- 'cause it's already uncertain enough, right? What has to be done. So you need to have at least this fundamental certainty. 

And then of course, you know, we created the venture capital industry was [00:28:00] extremely important, um, because we have these-- You know, it's a strange in-- lo-strange industry, you know, long lead times, clinical risk, heavy regulation, uncertain reimbursement. So we needed a, a vehicle that could fund that type of risk. So you needed the government helping out on the basic research, but then in the next area, which was still very risky, you needed risk capital and venture capital was important for that. we had this strong university hospital industry clusters around the world because you need to be able to, um, not only have good science but have, you know, good, good sci-scientists and combined with managerial talent and, and IP know-how and licensing and risk.

You need all this to be kind of bundled together. You can't have it in different places. The

Josh: Right

Bo Heiden: pretty good on these clusters. know, building the FDA out to be seen as a, you know, a globally respected approval pathway, that also creates a lot of confidence. You can [00:29:00] see every time you're really taking risks, you need to try to reduce um, risk-taking in as many areas as possible to push people over the, the hump.

Josh: Yeah

Bo Heiden: Um, a-and you're-- you know, as you know, the US does, uh, allow for high returns on this, which then incentivize people to do things. There was a colleague of mine from, from, uh, from Harvard, Ariel Pakes, he, did a study that showed that definitely the Americans were, were sh-um, shouldering the blu-- the, the blunt of most of the, uh, the brunt of most of the, um the cost for innovative drugs. still, even doing that, it was still in the interest of Americans to do that because it was adding so much benefits to health and longevity. So, um, so by allowing there to be a return, we bring these new medicines into life, which increase, increases our, our, uh, our quality of life. And then, of course, uh, the...

we, we had, uh, specifically [00:30:00] about patents, we did allow for the product patents to come earlier than other places. You can see in other countries and regions not having products on, on the drug itself, but on the, on the manufacturing process, made it more difficult to control and therefore less likely to invest. And maybe the last thing I'll point out is that, uh, large pharma and the bio-- small biotechs have really been able to con-- create a complementary, relationship rather than just separate worlds. So again, with IP, um, it's important from a transaction perspective because you have these small companies, they come up with something, they, they generate, uh, risk capital, they de-risk to a certain level of clinical trials, and then they can license or be sold because of the IP, can be transferred to another company to take it the rest of the way. that's o-often overlooked about IP. It's not just blocking, it's about allowing things to be transferred and moved in a market, which in the US is critical pipeline[00:31:00]

Josh: Yeah. Yeah. Ab- absolutely.

Bo Heiden: There's the GIF notes. I hope that was, uh

Josh: no, that was, that was, that was wonderful. 

Um, how did, how did Hatch Waxman, uh, fit into all of that?

Bo Heiden: Yeah, so the, the, the Hatch-Waxman came in, I think it was 1984. This was after the Bayh-Dole Act. So, so those two together were very important. Hatch-Waxman was a, was a great compromise. You know, when you read about the Hatch-Waxman, uh, legislation, you kind of become-- How do you say? You're like, "Wow, people could come together to produce really good legislation." And so it was the bargain, right? So we, we allowed the, you know, we allowed the pharmaceutical companies to patent products, and we even allowed through Hatch-Waxman to get ano- a five-year additional, uh, exclusivity and other exclusivities because of the fact that it takes so much of the patent period to develop the drugs.

Um, at the same time, we created a really clear [00:32:00] pathway for generic entry, That's what we want. We want innovation be maximized, and then we want access to be maximized. problem in the, in the, in the rhetoric is that they, they're overlapping them. You know, there's an innovation, and then there's access.

You know, there's no generics without the innovative drugs. So have to, you have to manage this. W- uh, Hatch-Waxman has done, uh, I think is a v- is a great legislation and, um, you know, how, how many years later now it's, uh, still working, I think, rather well. um, it w- it's almost amazing in the rhetoric today to think that both sides got together and allowed, and this was able to be put forward.

Josh: That's actually why I asked the follow-up specifically on Hatch-Waxman because I just, like, I wanna put a pin out into the ether just to prove that at least at one point in time that it was possible for Washington to collaborate on something, you know, constructive that would sort of pay [00:33:00] dividends for, you know, for, for, for decades, right?

It's like you, you put these two things together and, you know, y- you give investors enough confidence that if the science works that you're gonna have this legally protectable, you know, commercially financeable asset at the end, and you have a framework in place where you can, like you said, you marry, you know, uh, public science, private capital, startups, patent rights, you know, pharma, and it all, you know, it all comes together, you know, in this, uh, you know, incredible innovation in, in health, in healthcare.

Bo Heiden: And to

Josh: yeah.

Bo Heiden: both, and bring both sides together, right? 'Cause usually

Josh: Yeah, that, yeah

Bo Heiden: So not only the Congress bi- bipartisanship, but then the, the both sides of the innovative pharma and the generic to come up with something that actually came out to be a bit of a win-win in the way that it worked out, right?

Josh: Really amazing. I, I hope, I hope our presenters can kind of sort of go back and s- and study, uh, what happened and, you know, and how that, how that happened because, uh, that would be ... It'd be great if we could, uh, accomplish, uh, such things in the future with maybe, say, like AI, just for instance. But [00:34:00] okay, so

Bo Heiden: are always interesting too, 'cause I think the Bayh-Dole Act was signed, uh, I heard a story that it was signed like the last thing that Carter signed as he headed to the helicopter, uh, when he was leaving the presidency. So you have all these interesting stories, right? So that could be a good podca- You know who knows everything?

I mean, Adam Mossoff knows everything about this. So y- and you know him, so

Josh: We'll go a lot, we'll go a little deeper on that. We've, we've, we've covered STTR, um, uh, and SBIR quite a, quite a bit, and some of the, and sort of some of the strings side of it, like what do you need to be aware of as an inventor in, in terms of, you know, long-term, you know, ownership rights, but, um, not, not enough on, you know, on this piece, on the, you know, what it, what it enabled, um, for, for sure.

So I'm glad we got that, glad we got that in today. 

So, so everything was, everything was blissful in, in DC, uh, and we got this great, you know, um, highly productive pharmaceutical industry and so, but things were, things were awesome until they weren't. Uh, a lot of, lot of lobby and PR money has been [00:35:00] spent on, as we, as we mentioned before, some common narratives that are, you know, visually compelling, uh, albeit misleading, you know, metaphors, uh, and, and imagery.

And a lot of the current policy debates center on these phrases like evergreening and patent thickets and patent monopolies. Can you explain what those terms, uh, mean, you know, what they're referring to, and whether those narratives are actually backed by any evidence?

Bo Heiden: Yeah, this is, uh, you know, again, these are-- all these terms are used typically pejoratively, right? They're pejorative labels to support a narrative, typically doesn't hold up under empirical scrutiny, like most composite, know, patent troll. I don't like names that are labels at all, even, you know, predatory infringers. If we-- If everyone's a troll, then all of a sudden everyone's a troll or a predator and, you know. There's a lot of different types of behaviors, some rational and some irrational. So it-- So again, if AERA's goal is to be the kind of voice of [00:36:00] reason and be empirical, then we have to understand what do we mean?

And of course, when it comes to evergreen or patent thicket, it's basically the question that's being asked or the hypothesis that's being put forward whether a, a lot of other patents, um, secondary and, uh, patents related to, um, um, to formulations and related to use and other, um, follow-on innovation, whether the patents on all that are somehow extending the life of, of the original drug that can then become generic in the grand bargain that was Hatch-Waxman. And, and that's an okay question to ask, right? So there's nothing wrong with asking the question. The problem is just looking, looking at it very simply and then drawing the conclusion. And when you look at it, uh, very specifically, for example, on this dur-duration question, 'cause that's the main thing is, right?

That they say, well, instead of getting the fourteen years that Hatch-Waxman was talking about, [00:37:00] roughly, you know, people are getting more than that. Well, when you look into it, you find that new small molecule drugs on average are only about twelve to fourteen and a half years of real market exclusivity, uh, before generic entry. So you can't just look hypothetically at when are patent dates and this and that. You have to look-- find out when did the generic enter, right? Plus we, we even-- we also have, um, innovative competition. Look at the GP-- GLP-1 drugs, right? We have-- So even before all the generics are gonna start to come in around the world now, you've had competition between Novo Nordisk and Eli Lilly and others coming into the game for the next round of innovative drugs while there's gonna be a competition for the generics.

So, um, so again, these terms are used, um, again, I wouldn't mind-- So if you break them apart into the fundamental question, the Hatch-Waxman bargain still work? Are there things that have [00:38:00] happened over the last forty years that have allowed things to move in a way that is different from that?

That-- Those are good questions. We should ask those. But we have to look at them, um, scientifically and, and, and, and listen to the empirical evidence. And that's basically why we have AERA, because I think we've lost that ability to do that, and we just have to have that.

Josh: Yeah, in addition to the data you were citing about the, um, you know, the exclusivity window, the, uh, you know, Center for Protection of Intellectual Property just published some data too. So the F- FDA data is showing that nearly ninety percent of all prescriptions in the US are filled with generic medicines.

Ninety percent, um, up from four... That's up from 14 and a half percent in 1980. I mean, that's a, that's a pretty compelling indicator too, right? That, like, things aren't going off the rails. Like, the sy- the system is doing what it was designed to do, um, in that, in that regard

Bo Heiden: At, and at the same time, we, uh, we lead the world in the most new drug development. So we have 40% of new drugs released worldwide. [00:39:00] Um, so we, we're leading in both the, creation of new drugs and in the use of generics. And I would have to think that Hatch and Waxman are pretty happy-- would be pretty-- would have been pretty-- would be pretty happy about that, yeah

Josh: What do you, and maybe it's, maybe it's everything we've just talked about. I... But what do you... Why are policymakers getting this wrong? What are they, what are they misunderstanding about the relationship between, you know, innovation and, and access to drugs? Like, if you, if you had five, if you had five minutes on the Hill, you know, with, uh, you know, with, with the HELP Committee and every other Orwellian doublespeak named, you know, committee and, and, you know, for- Like, what, you know, what, what would you, what would you tell them?

Bo Heiden: I think the message, the thing that we've talked about a lot already is the message. It's not-- So the message is simple. It's that, um, you need to-- you need both innovation and access, but you don't necessarily want to take away one for the other. Um, so you [00:40:00] need them both. And you're going to have to step up and explain why if we don't invest in innovative drugs...

So like if a constituent-- So the constituency wants all these new drugs to be cheap right away. It's completely rational. have to be able to do the tough job of explaining that years ago the people felt the same way, you wouldn't have the cheap drugs that you have now, right? And so we have to balance both, and we create a system that tries to maximize both, and we try to look at the system to make sure that nobody's gaming it and how to improve upon it. But there's not just an obviously obvious bad conduct here that's allowing the drug prices in r-- at least in relation to the patent system. Other-- There could be other issues, but in relation to the patent system, it is doing its job very well. It's an incredibly successful policy instrument. Um, and, and then maybe the [00:41:00] focus leave talking about the patent issues and talk about other issues where there might be, um, inefficiencies in reducing the, the price of, or accessing the price of drugs.

That can definitely be discussed, but it's very hard for... People really need to know that this is not only about them, it's about, health for their, their children and going forward, and that this is the system that they're benefiting from today.

Josh: I, I like the time travel exercise in that. You know, it's like, "Oh, I want a fully grown tree today." Well, you should have planted it 20 years ago, right? Um, yeah

Bo Heiden: Oh, it's a little bit like that. No, that's right. And it's, it's not an easy thing to tell people that have an illness and struggle. Um, so it's, um... I understand. I, I try to treat everyone as, you know, that they have rational concerns and that the system is im- is-- can never be perfect, but we try to do it as good as we can in a, in an understanding of it.

Maybe, like we said, if we went back in time and we asked people, "How would you do this?" You know, they have the [00:42:00] thing, Adam will like this, behind the Rawlsian veil of ignorance, right? We don't know who we're gonna be or if we're gonna get a disease or not. How would we create the system? I like to think that most people would create a very good balance between innovation and access. I would think

Josh: Yeah

Bo Heiden: But in the moment, you might prefer one over the other, right?

Josh: Yeah. Yeah. Yeah. Well, I think you, you really hit on something there too that I think is, and this is not just the case with this conversation, it seems like it's true with, like, everything that becomes divisive and political footballs and, and po- and polarized. But it's like there is a-- You have to acknowledge the human element of this in the mi- in the middle ground, right?

That is, uh, you know, yeah, I mean, drugs aren't, drugs aren't inexpensive. It would be great if more-- we could get more people, everybody access to breakthrough, you know, me- medicines. Like those are, those are for sure, those are for sure problems. We gotta make sure that we're solving the r- we gotta make sure we're solving the right problems.

But, you know, it doesn't [00:43:00] make sense to say, "Oh, you know, patents are evil," and it doesn't make sense to, to dismiss those, those very real concerns, those very real health, life, and death concerns of, of, um, you know, very, of very real, very real people. And, um, you know, we ha- it's like you have to acknowledge the realities of, of both sides from that.

And that's like, that human element sort of ends up getting, getting stripped from this conversation all too often. So I'm really glad, I'm really glad you me- I'm really glad you mentioned that.

I struggle a little bit because, you know, I, like I don't ever wanna be accused of being a shill for big pharma. Like, you know, uh, big pharma is like far from perfect in, you know, uh, in, in my, in my book.

But like drug patents are essential. And so like I'm gonna go to bat, and I'm gonna fight for the drug patents like all day, every day. But there's, there, there's nuance in the human component to, you know, to this, and that's, that's, that's very, very real. And Pe- like people seem like cold, heartless, you know, detached, whatever, [00:44:00] um, when you take that piece out of the, out of the conversation.

And I don't, I don't think you're really gonna move the conversation forward un- unless you can acknowledge that as, as part of it

Bo Heiden: Uh, no, I think I... go ahead, Ashley

Ashley Sloat: I'll just say, you know, and I think the hard part is acknowledging that the s- to your point, Josh, the system isn't perfect, but you can't throw everything, you know, you can't throw the baby out with the bathwater, right? And G- I think you said something too to that effect, Bo, that, you know, figure out the right problem to solve, right?

And maybe this isn't the problem to solve. If you wanna talk about access and cost and things like that, maybe there's some other things that can be done. But, um, there are things that are working clearly

Bo Heiden: Exactly.

Josh: So, um, unfortunately, the problems for the industry, uh, they don't end with innovation policy in Congress, but, uh, often extend into the courts. Earlier this month, the Supreme Court ruled on a case involving skinny labeling. Um, can you tell us, like, what was, what was at the heart of that dispute?

[00:45:00] Um, why is the HCMA ruling so consequential? And, you know, for the benefit of our, of our audience, can you explain what is meant by skinny labeling?

Bo Heiden: It sounds like a side effect from the GLP-1 drug, doesn't it?

Josh: That's just right

Bo Heiden: Yeah. So the, the skinny label is actually quite an interesting, uh, you know, in the sense that, uh, um, when, when new compounds are created, they're usually created for a specific use. But people continue to innovate find other uses for the same drug, which is great because you don't have to spend as much time coming up with new, completely new compounds.

And in that, we want to give people exclusivity on these new uses, but we don't want them to necessarily-- We want to g- to create a generic version of the old uses. But, but the difficult part is it's the same drug, right? Being sold basically with two different labels. So the skinny label means that you can, that you can use the drug for the generic [00:46:00] purpose, but not the same drug for the proprietary new use one that we wanted to incentivize to create because that, that's better for society. And, and, and so you can see it's a really be-- It's a really great idea to do this, right? To really split this thing off. But, because it is the same drug ba-- you know, that to manage the behavior and how this is done has to be done-- has to be, um, has to, has to be governed properly. So the, the Hikma case was about the idea that, um, that Hikma launched a generic version of Amarin's, um, Vascepa And the idea, the, the accusation was that Hikma wasn't doing enough or explain that this was only for the generic use, not for the proprietary use, or was doing too much to try to make it look like it could be used for both. Um, and the Supreme Court nine-nine [00:47:00] zero said, well, at least legally what they did didn't rise to the level of induced infringement. a discussion of where the line in-- line is, is good, right? I mean, that

Josh: Mm-hmm.

Bo Heiden: we need to know where that line is, and people need to-- 'cause they need to know how to behave,

Josh: Yep.

Bo Heiden: Because the idea of skinny labels is just great. But it, but it is-- I mean, we just got to accept that it is a little tricky, right?

Josh: Yep.

Bo Heiden: So, so the, so the Supreme Court found that, uh, it, it wasn't induced infringement. The question-- But they did leave open the fact that, that there's, that there can be induced infringement, but it has to rise to a certain level for that. So it was basically just setting, setting the, the line. so it didn't really take away what the Hatch-Waxman skinny label mechanism.

It just trying to define this line. And of course, um It's, um, it's, it's very important to see that the [00:48:00] sk- the skinny label, doesn't become too political of a football in that way, because this is actually an extremely useful mechanism of the grand bargain. And so we really need to, to keep it this way, and hopefully that, um, now people will understand where, where the line is.

This will allow for things to be done in a better way, and, um, this won't, uh, necessarily cause a whole lot of issues. I know that there's a, a bill in Congress now that's looking to address this some way as well. not... I, I think it's useful again find some certainty about how to do this in a good way so both sides know. Just want to believe that we can solve this, and I think it's important to solve this and to clarify this in a good way.

Josh: Yeah, for sure. Yeah, r-really, really highlights the delicate balance between, you know, generic entry and, you know, protecting new patented uses and, and, you know, both sides of that equation would, would benefit tremendously from, from clarity on, [00:49:00] on that, right? I mean, it's-- that sort of uncertainty can be, can be paralyzing.

So yeah, I mean, hopefully, hopefully they'll need to move it a little bit on that. 

Um, so I'd like to-- just like to round out the conversation with, uh, some more recent events and hot topics because, you know, what would a twenty twenty-six podcast be without some talk about AI and weight loss drugs? So, um, like, like everything else, uh, AI is, is rapidly changing drug discovery.

Is-- Do you think the patent system is keeping up? And what legal challenges should, you know, practically speaking, like just ground this in some takeaways here, uh, what legal challenges should firms and in- and investors be considering?

Bo Heiden: Yeah, that's good. These are interesting issues. So if we look at AI, this, this-- there is a core tension here that is genuinely novel. You know, can, mach-machines be an inventor, right? And, um, I-- as a non-lawyer, I have to say I find it interesting when the lawyers look back into [00:50:00] rather old statutes, to try to infer whether the people who wrote those statutes, um, allow in-allow inventorship to go, um, to a machine or only to a human inventor, when obviously at that time they were only thinking about humans as possible.

So it may be necessary to create new legislation going forward, um, to deal with this. Because looking back, you know, you're looking back into a time where no one thought about this as a possibility, so you're not really gonna find-- you're gonna find exact, you're gonna find exact language, but you're not gonna find any thought behind it from this perspective. Where it fits, um, where it becomes, um, critical in relation to bio pharma is that, um, let's say that an A-AI, um, helps to invent a drug, a new drug, a new compound, um, and maybe it's allowed us to do that in a, in a, in a quicker amount of time, which is great. [00:51:00] Uh, if it wasn't allowed to be patented, the problem would be is that we still need to spend the two point five billion dollars, right, to, to get it out onto the market. we have to go back to first principles. I think AI and the pat-- is forcing the patent system to go back to first principles and say, "Why do we need a patent?" And we need a patent not only to inse-incentivize inventing, we maybe more importantly need it to incentivize investment. no one's going to invest in, in an AI-created drug, um, if there's no exclusivity, 'cause it's the need for exclusivity.

Like we said, you're weak in that position. So we-- So could be a reason why we need new legislation if the courts can't thread the needle here because the inventorship is one thing, but the investment is another. And in this case, it would be, it would be a problem to basically not be able to invest in new drugs generated by AI. [00:52:00] That would be bad for everyone, I would believe. So, um, so for now, I think companies are being clear that there's humans in the loop and that it fits the statutory arrangement. But, you know, maybe in five years, the computers are getting better. Um, maybe we have to create new legislation for that world where we take AI into account the beginning

Josh: You know, that's-- it's interesting that, um, you know, the inventorship, piece of that with AI, if you, if you kinda do the, you know, the first principles deep dive on it, right? It's like, okay, well, you know, intellectual property rights are born in the Constitution. Uh, y- you know, the only time the word right is even used in the Constitution is pre- pre-Bill of Rights.

This was a, this was, like, a big, uh, time, uh, sort of, you know, philosophically in the exploration of, you know, natural, you know, natural rights, uh, life, liberty, pursuit of, pursuit of property. And so, you know, we give, we give inventors, right, ind- individual humans, uh, the, the, you know, the right to sort of [00:53:00] possess property from,, from the conception of, of their idea.

If, if we're really gonna talk about inventorship and intellectual property rights with machines, we're really kind of talking about, like, machine rights more broadly, right? Like, in a natural rights kind of context. You know what I mean? If you take it, if we take this all the way ba- you know, if we take this all the way back, um...

So man, there's, that could be, that could, that's a, there's a, there's a can- there's a big old can of worms there, isn't there?

Bo Heiden: Yeah, I think you have to leave the natural rights perspective because now we're not talking about people. We're, we're definitely talking about people benefiting.

Josh: Yeah

Bo Heiden: tends to be a more utilitarian

Josh: Yeah. Yeah.

Bo Heiden: And it-- and, and from that perspective, it would be silly not to allow for exclusivity because that would be completely needed

Josh: Yeah.

Bo Heiden: un-until the machines are also doing in silico, know, drug trials in three seconds.

Until that happens, we still need, we still need this, maybe the law doesn't allow for it, and we have to, we have to be careful sometimes to not [00:54:00] get so captured in the way the patent system w-was created to block us from using it in a new way that we need it, right?

Josh: Yeah. Yeah, yeah. Yeah, and I mean, at the end of the day, we gotta facilitate the quid pro cro- quid pro quo, right? The, uh, you know, uh, public disclosure in exchange for the exclusivity. As long as we're doing that, you know, I think we're probably, I think we're probably fine. 

Um, so the other, the other hot topic one, I mean, you, you hit on this a little bit earlier, but, um, you know, what, what does the GLP-1 landscape tell us about how the patent system is functioning?

Bo Heiden: Yeah, this is fun. The GLP-1 drugs are very interesting. Um, I think that to me, I see them as a ca-- I see these drugs as a case study on the effectiveness of the patent system as a policy instrument. I, um, we had someone spent a lot of money to come up with a new, um, a, a new way to treat, um, obesity and diabetes. I think if I'm correct, I think [00:55:00] the-- part of the understanding of it coming from the basic research on the venom of the, of the, of the Gila lizard and... So it comes from something that's very basic research-oriented, right? So again, people putting money into it, then people investing in trying-- taking it forward. And then once this pathway was found, a lot-- and, and it was very successful, other companies jumping in, even on the innovative stage. So even in the innovative part of the bargain, you had new-- you had competition. And now it's coming off of, um, patent protection, and I think in other countries in the world other than the US and, and Europe, they're already talking about ten, 20, 30, 40 companies putting out, uh, generics around this. of course, the companies are continuing to innovate. So, you know, you had, you had injections that you had to do every day, then injections once a month, then, then a pill. So that's all improving, but all the older technology that is still [00:56:00] very useful becomes, um, becomes a highly contested generic market available for very little to solve problems that are incredibly important.

So it's almost a perfect example of the policy working. But what all I hear typically in the press is like, "Oh, this has taken so long," and, "Oh, the companies now are gonna lose money." They knew that the p- the patent cliff was coming. That's the bargain. and it took so long. It, it took what it took, you know?

It-- You know, no one was, no one was upset they didn't have this drug when it didn't exist, right? it's-- this is the, this is the human element. But now that it exists, why does it take so long? Well, okay, um, this is how the system works and p-- and it works extremely well because if you start to toy with it, then you don't get it.

But then, like I said, there's no one advocating for the drug that never came to existence.

Josh: Yeah. Yeah

Bo Heiden: So I think it's a great case study for this, and I, I want to write something on this in a kind of [00:57:00]cheerful way because I of-- there's often not enough, uh, there's not enough in this debate people saying, "Well, this worked great." Right? So

Josh: Yeah, yeah. Yes. Yes, yes, yes. We need the, we need the cheerful warriors.

All right, so, um, I just, uh, wanna throw out some closing thoughts as we, as we wrap up. I kinda, you know, try to take mental, mental notes as we go along here, see if I can kinda put something together in a, in a, in a nice little bow. Uh, and you can, you can tell me what I, what I missed and, and if I get, if I'm getting any, if I'm getting any of this wrong

Bo Heiden: can tie it up in a bow, no pun intended,

Josh: Yeah, that's a yes, and a Doc- Doctor, Doctor Bo. All right. So, um, so the, you know, the role that IP protections play in drug development and, and healthcare is a-- I mean, this is, like, this is a conversation that we need, we need to be having. Part of that conversation is, you know, unfortunately increasingly popular narrative that patent protections are just driving up drug prices and that they're, you know, they're limiting access to the, the [00:58:00] medical breakthroughs.

In, in addressing that, we do need to be abundantly clear that the problem is not the access and affordability concerns are fake. Problem is that bad narratives lead to bad fixes, right? And we have to solve the right problems, and we have to address the right root causes rather than reaching for convenient boogeymen.

And so, you know, without reliable patent protection, far fewer investors would fund the long, expensive, and very uncertain path, um, from, from discovery through, um, approved medicine. With reliable patent protection, the drugs still have an enormous upfront cost. The clinical and regulatory risk is there, the public disclosure is there, but it's followed by a finite and potentially valuable period of protected commercialization.

And it's, it's that exchange that makes the risk legible enough that capital and partnerships and commercialization can [00:59:00] actually, actually form around it. And so it's sort of another classic, you know, bridge versus blockade patenting conversation. But, like, we have to get this right. It's, it's literally a, um, a matter of, a matter of life and death.

What did I miss?

Bo Heiden: No, I think, I think you framed it well. It's a fundamental policy issue. It, it should be discussed. It needs to be discussed rationally. Do we want to side more on access? Do we want to side more on innovation? That should be discussed. know, it, it is a question for society to, to, to think about. But we-- what we can't have is, like you said, we can't have our cake and eat it too.

Josh: Yeah

Bo Heiden: think about it, and we have to make these decisions not based on rhetoric or self-interest. They have to be based on empirical evidence, and they need to be followed up to see how it's working and improve, and improve, and improve on it. So-- And that's what we want to do at ARRA. We're hoping to play a positive role in that development process

Josh: Wonderful. I think that's a great place to, [01:00:00] uh, wrap, wrap it up. Um, both thank you so very much for your, for your time today, for, for joining us, and, uh, this has been a, been an illuminating conversation

Bo Heiden: Thanks Josh for the opportunity. Appreciate it

Josh: all right. That's all for today, folks. Thanks for listening, and remember to check us out at aurorapatents.com for more great podcasts, blogs, and videos covering all things patent strategy. And if you're an agent or attorney and would like to be part of the discussion or an inventor with a topic you'd like to hear discussed, email us at podcast@aurorapatents.com.

Do remember that this podcast does not constitute legal advice. And until next time, keep calm and patent on.