Viewpoint of Biotech General Counsel

John is joined by Jonathan Graham, Executive Vice President and General Counsel and Secretary of Amgen, one of the world’s largest biotech companies and one of the pioneers of the industry. They discuss in-house legal leadership in major biotech companies and how science, intellectual property, and regulation shape strategy. Jonathan began his practice clerking for the Ninth Circuit Court of Appeals, then became a litigator for a large firm. Later, his career shifted in-house. He believes that litigation training develops useful skills, including rapid issue spotting across unfamiliar domains, crisp written and oral advocacy, and an ability to understand stakeholders’ incentives.

The biotech industry is unusually purpose-driven because the output is medicine that can extend life and restore quality of life. That mission creates urgency across functions, as delays can mean patients wait longer for needed therapies. The sector is also highly regulated and fast-moving, which elevates the importance of legal teams that operate as strategic partners rather than as a “department of no.”

Intellectual property is the economic lifeblood of biological drug development. Bringing a molecule to market often costs billions of dollars and requires years of lab work, clinical trials, and manufacturing scale-up. Without enforceable patents, competitors could free ride, undermining investment incentives. This reality drives frequent, high-stakes patent disputes that can be hard to settle because exclusivity is enormously valuable.

Patent doctrines often lag behind technology, forcing courts to fit new technologies into older legal frameworks. Artificial intelligence is potentially a powerful tool for discovery and analysis of molecules, but not a substitute for wet-lab validation or human inventorship. Regulators still require clinical evidence before any medicine is approved and likely will for the foreseeable future.

Biosimilars are currently a booming market with many parallels to generic drugs. A company may participate in the market as both innovator and biosimilar supplier by leveraging its research and manufacturing capabilities. Finally, government-driven drug pricing controls may slow innovation over time, even though scientific progress and therapeutic potential remain strong.

Podcast Link: Law-disrupted.fm
Host: John B. Quinn 
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi

Transcript

Note: This transcript is generated from a recorded conversation and may contain errors or omissions. It has been edited for clarity but may not fully capture the original intent or context. For accurate interpretation, please refer to the original audio. 

JOHN QUINN: This is John Quinn and this is Law, disrupted and today we're talking with Jon Graham, who is the Executive Vice President, General Counsel and Secretary of Amgen. Amgen is an amazing biotech company. It's a company that was one of the founders of the biotech industry. They're involved in engineering, creating these incredible biologic drugs, drugs that are derived from live cells. I think they do some small molecules, you know, traditional, synthesized chemical tablets and pills and the like. But most of their drugs, I think are these biologic drugs. It's a very, very large company by revenue. It's 134th I think on the Fortune 500 list in Los Angeles.

You're not actually in Los Angeles County, I don't think. I think you're out in Ventura County?

JONATHAN GRAHAM: That's right. We're just outside of LA County. 

JOHN QUINN: But if we get to count you in LA you're either the second or third largest business in the LA area by revenue. So it's an amazing company.

Really interesting job and I'm sure, I'm really looking forward to talking to John about this, but before we plunge in, you could tell us a little bit about your career. How did you get to the point where you are general counsel at this amazing company? 

JONATHAN GRAHAM: Sure. You know, after law school I clerked on the Ninth Circuit.

I then had an opportunity to go join Williams and Connolly as a young associate. Williams and Connolly, as I know, you know, is a litigation boutique-ish firm. 

JOHN QUINN: It's a dynamo litigation firm who we encounter. On the same side of them all the time. 

JONATHAN GRAHAM: Yeah. And it was an incredible experience working there.

Very wide range of cases. Everything from, you know, and as a young, a brand new associate, you were expected to do everything right away and we did, it was really fun. 

JOHN QUINN: Do you think having a litigation background now, you've spent most of your career, I think, here in house, do you think having a litigation background was good preparation for that?

JONATHAN GRAHAM: Yeah, it's turned out to be a fabulous preparation. I know there's a, you know, there's sometimes a debate or actually when I first became a GC, people were surprised and expected, oh, well you're not an M&A lawyer. I think things have moved, and I think given the, and the variety of matters that large corporations, general counsels work on, case litigators are, you know, extremely good choices.

In fact, the reason I, after Williams and Connolly, I was there for 16 years. I was a, you know, first year trial lawyer, had a good book to business, et cetera, and I got a call to go join GE as the head of litigation and compliance. And I said, no, thanks. I'm not… 

JOHN QUINN: I think that's when I first met you actually.

JONATHAN GRAHAM: That's right. That's right. But I turned that job down a couple times because. I couldn't imagine that it could be as interesting as what I was doing at Williams and Connolly. But I eventually was persuaded by a very persuasive guy named Brackett Denniston, who was the BC of, GE at the time.

He had a great line. He said, everything you've done in the past is necessary but not sufficient for success in this role. I was like, oh, that's a great line Brackett. And I met an incredible group of lawyers he had assembled, and he and Ben Heinemann. So I joined him and I found out he was right.

It was, it was as interesting as working, in a wide ranging litigation practice. I have to admit somewhat to my surprise, because I figured I could always go back to Williams and Connolly if that didn't work out. 

JOHN QUINN: I mean, the thing about litigators is we get exposed to so many kinds of things, and we have to learn to pivot.

We have to learn to spot issues, we have to learn to communicate. That's really what it's all about. Communicate orally in writing. Yeah. And in-house when you have a lot of different things coming at you. I gotta think that a lot of those skills that you develop as a litigator are really useful. 

JONATHAN GRAHAM: Yeah, and I think one of the skills that is, you know, good litigators have, is understanding people from a wide range of backgrounds and understanding what motivates people, what keeps them up at night, why they do what they do.

And I think, you know, some of my previous life experience plus being a litigator for so long, you know, it was really helpful. And that has, I think, helped me a lot in-house. 

JOHN QUINN: And then after that you went to Danaher? 

JONATHAN GRAHAM: Yeah, I went to Danaher, which is a very large life sciences company. It was doing incredibly interesting place with a wide, a big portfolio of different kinds of companies and different industries.

And, has over time we moved it more and more toward where it is now, which is largely a life sciences company, did a lot of spinoffs talk about M&A. I think while I was there we did close to 300 deals of one kind or another, including some very large ones. And so that was a great experience as well and worked with fabulous people.

Larry Culp was the CEO, who's now the CEO of GE Aerospace. Had a great relationship with him. Learned a ton about business from him and that was a great experience. It was fabulous. I was there nine years. 

JOHN QUINN: And then at some point you joined Amgen. How long, how long ago was that?

JONATHAN GRAHAM: That was just over 10 years. Around, or, yeah, 10 and a half years ago.

I was thinking about working in a more mission focused company in a way, or a different kind of mission. And when Amgen became calling, it was sort of right at the time that I was thinking about, well, do I stay or should I do some different things? 

JOHN QUINN: What do you mean by mission focused? 

JONATHAN GRAHAM: Yeah. I think Amgen's mission is to quote, serve patients unquote.

That was very appealing to me because I, the science part I love and has always been interesting to me at Danaher, and now even more so at Amgen, but putting the, you know, the weight of a large company behind making people live longer, live healthier, be happier, that patients send in that have, had the benefit of taking a medicine that saved their life or made it possible for them to go to school again or made it possible for them to date again. 

You know, when you get a letter from someone saying, Hey, thank you so much for inventing this medicine. It made it possible for my wife to meet her grandchildren. That's a pretty moving sort of experience. We think very much about that within the company. I also have responsibility for our corporate affairs team and we talk about our mission throughout the year but there's one week a year that they put on just an incredible display.

We call it Mission Week, incredible display where of intensity around our focus to serve patients. And we have many patients come and talk to us in a group. There's lots of Kleenex, I guess I should say tissue paper, in the audience, and online for people because some of the stories are just incredibly moving.

And, you know, no matter what you do, whether you're a lawyer, whether you're an accounts payable, whether you're serving food in the cafeteria, or whether you're a scientist developing a new molecule, you can really see how it all ties together. All those people are necessary to work at scale, to bring medicines to people around the world.

And that's it, it's very gratifying. 

JOHN QUINN: I mean, from a lawyer standpoint and legal issues standpoint, how is the biopharma industry different than some of the other industries you've had exposure to?

JONATHAN GRAHAM: I would say it is fun and exciting and purpose driven. I guess I would put it that way. It is moving like crazy, the technology is moving like crazy, the people, you're exposed to, some of the most brilliant scientists in the world and you do have this sense of purpose, like, Hey, every day we delay. So done is possibly a day that a patient doesn't get a drug that might save their life. So you that kind of sense of urgency.

I would also say that within bio companies generally, you know, the role of, well, again, I've worked in a number of companies and I've talked with, of course, many people at many other companies, general counsels and lawyers who've asked for advice about their career, et cetera.

And what I tell people is, if you're gonna go in-house, make sure that the legal department is not regarded as the department of no. It's actually seen as a real contributor to the, to what that company's trying to do. And that's just not the case that a lot of companies, the lawyers are like, oh yeah, we gotta have some lawyers around here at a company like Amgen and some of our peers, the lawyers have a seat at the most important tables and you just can't work in such a highly regulated business moving so fast. That is, that doesn't have a priority on great legal teams. 

JOHN QUINN: Yeah, no, a lot of regulation healthcare generally.

I think everybody, all, everybody listening to this can understand that, but I, you know, there's also a lot of litigation relating to intellectual property. I have the impression correct. Maybe you see it differently, that the industry is also a relatively litigious industry. There's a lot of legal disputes.

Especially disputes around intellectual property, ownership of molecules and the like. 

JONATHAN GRAHAM: I would say that intellectual property, along with the science itself is the lifeblood of the industry because, you know, you can have the most brilliant people in the world working on something, developing a molecule that is a medicine, if it's not protected by intellectual property, no one's going to ever get that medicine because it costs hundreds of millions and often billions of dollars. 

I think the average molecule now takes over $2 billion to bring to market. So if you don't have patent protection about it, and you do all the work to bring it to market, and then someone else can come along and just, you know, make the molecule and start selling it, then you've blown up over $2 billion. And investors don't like that, so you have to be, you have to have a very good intellectual property council all the way from the preparation phase, the prosecution phase. 

And I don't know the exact number, but for example, on my team, I think we have about 50 people that have PhDs in chemistry, molecular biology, physics, et cetera, that work on our prep and portfolio.

And then we have a group of people in house that make sure that we can protect that intellectual property. In court are a very strong intellectual property litigation team. So, yes, it's life is part of that in the industry. You just couldn't do it without that. 

JOHN QUINN: Well, biochemistry or some kind of technical area? 

JONATHAN GRAHAM: No, I didn't, I actually took, I took science classes. I took a lot of math for a lawyer. You know, they say if you don't like math, go be a lawyer. Well, I took a lot of math and then I went and became a lawyer. But, what I've always been interested in is science.

I'm not actually sure why I was just more interested in policy and I became in college interested in the field of economics. I had thought about maybe becoming an economics professor at one point in time. But throughout my career, and actually when I was in trial practice, I often got very technical cases involving chemistry, involving, you know, printed circuit boards involving, you know, the exact composition of wastewater.

And then having to explain that either to a prosecutor, to a judge, or to a jury. I liked taking these complicated concepts, scientific concepts and trying to break 'em down and make sure that, I always say, you gotta, if you can't teach it to a relatively smart 12th grader, then you're gonna fail in front of a jury.

JOHN QUINN: Well, that's what good litigators do. You need to move from subject matter to subject matter. Different cases, usually concurrently, working multiple cases with entirely different industries and subject matters. Is there something that you can say generally about the Amgen approach to intellectual property.

There's some things about your approach to it that you think kind of stand out. How do you think about it? When to litigate, when not to litigate? How do you make these kinds of decisions? 

JONATHAN GRAHAM: Yeah. Well, as you, as you said a few minutes ago, it is a somewhat litigious industry, but it becomes manifest when you have to litigate.

And unfortunately, one of the things that did surprise me when I came to the industry was how difficult it was to settle many of the cases. 

JOHN QUINN: Why is that? 

JONATHAN GRAHAM: I think that it's because the stakes are so high on each side that it just becomes more and more challenging to settle and it's in the end, you have a molecule that's going to the benefit of a patient and you feel a strong desire to make sure that that molecule stays on the market.

Or if you're in the biosimilars business, as we are as well, that you are, you are bringing that to patients at a lower cost. 

JOHN QUINN: Yeah. 

JONATHAN GRAHAM: And, and it just, you know, I used to, you know, usually in business to business disputes, there's always a number that, as I put it, makes everyone equally unhappy and you can get to that equally unhappy number, sometimes swiftly for settlement and sometimes very slowly.

And in this industry, sometimes it just takes quite a bit longer 'cause of the amounts of the investment you've put into designing, doing clinical trials, getting to market manufacturing. So it's just, it's super expensive and it's very high stakes. 

JOHN QUINN: Yeah. maybe we can dive into some particulars here of some of the cases.

I think I previewed some of this with you for the podcast in 2023, there was a case where the US Supreme Court actually ruled against Amgen in a patent case involving one of its cholesterol drugs. The case centered on the legal concept of patent enablement. Basically, the idea that if you're going to get a patent, giving you exclusive rights to some category of invention.

So you need to actually explain in enough detail how to make all of them not just a few examples. And Amgen had patented a broad class of antibodies that black certain proteins related to cholesterol, but the court said Amgen had only disclosed how to make 26 specific versions out of potentially millions that could have fallen under the patents description.

I mean, did that decision in any way make Amgen or your team rethink how they write patents or how, how much research they need to do before they move to patent a new discovery? I mean, do you see a risk of companies easily designing around if they overly limit their claims? 

And then a second question. We all hear about AI being involved now, patent invention and drug discovery. But if a company uses AI to identify a drug, will that really quote unquote enable in the patent law sense the full scope of what's claimed in the patent? 

JONATHAN GRAHAM: Okay. There's a lot in both of those questions. There's a lot in both of them.

JOHN QUINN: Yeah, this is for our patent nerds in the audience. 

JONATHAN GRAHAM: Okay. This is for the patent nerds, but some of this might be interesting anyway, just as a matter of, just general legal.  

JOHN QUINN: Yeah. Let's start with the concept of patent enablement. If you're gonna get an invention, you're gonna get a monopoly. You have to teach the world actually how it's done and what it covers. 

JONATHAN GRAHAM: That's correct. You gotta show the world you know how to do it, and that they ought to now know how to do it. And we were of course disappointed in that Supreme Court case because we think the technology involved showed that if you could make 26, you could make the other, you know, 300 of them.

It wasn't millions, but there was probably another 300 or so. But I would say that you know, notwithstanding the disappointment in that case, and I'll come back to how we deal with it, you know, that's actually a great illustration of how exciting it is to be a lawyer in this business because it’s the edge of technology. 

As we know, courts are typically 10 to 15 years behind in trying to figure out how do you deal, how do you take the new technologies and put them in the old vessels of the law, as it were, and so this was a great example. Antibody technologies, you know, how you, you know, create antibodies typically from using transgenic, humanized mice.

And how you do that, what that technology is, that's pretty, that's not that new anymore. But by the time we got to the Supreme Court in this first case where that was the underlying technology, you know, it was 10, 15, 20 years after, or even more after that had first been done so, you know, from my perspective, disappointed to lose the case, but really cool to be at the cutting edge of creating the law.

And that's not the first time we've been at that cutting edge of creating the law in these biotechnology technologies now for, you know, 30, 40 years, and so that's pretty, that's a cool thing, period.

As to, you know, how do you deal with that now? Now we and everyone else in the industry knows what the new rules are. So it does change what you do and how you write your patents and how you demonstrate enablement. It creates a lot of busy work, quite frankly, because again, as I said before, if you can make 26, you can make 300, you can make 3000. Do scientists want to spend their time doing that? Is that productive for the industry? I don't think so. But if that's the patent rule, then people will have to do that. 

And what that also means is that I think some smaller companies just won't exist because, you know, a venture capitalist isn't gonna give a small startup biotech that has an interest in creating a new antibody, you know, the hundreds of millions of dollars it will take to, you know, run through all those experiments in a wet lab when everyone knows what the answer is.

Anyway, so that's, you know, but yeah, sure. It changes the way we and everyone else in the industry is writing patents. The other thing that was interesting about that is the industry was sort of split 50 50 in amicus briefs. They were written and filed with the court, so you know, there's fast followers.

They wanted to knock the patents down and then there's innovators and they wanted to keep the patents, that sort of patent alive. 

JOHN QUINN: How about the role of AI and drug discovery? We hear a lot about that. Does that raise issues about enablement? Does that raise other issues about intellectual property and patentability?

And maybe you can tell us how important AI is, how is AI being used now at Amgen to discover drugs, if at all? 

JONATHAN GRAHAM: Yeah. Okay. So again, two questions there. Let me, break 'em down. First of all, yes, AI is a very valuable tool and I think it's gonna be increasingly valuable in drug discovery as well as all the other things that people do with AI now and that we're seeing more and more of.

And, but I think when it comes to writing patents and enablement, et cetera, you know, AI is a tool. It's a really fabulous tool, but, you know, some people have questioned, you know, well, does the AI, if you use AI, does it become the inventor? 

JOHN QUINN: Yeah. 

JONATHAN GRAHAM: And the patent office has said, oh no, you can't have, AI.

JOHN QUINN: Can be a human being, basically as an inventor to be patentable.

JONATHAN GRAHAM: But human beings have been using tools forever in the search for new inventions. Right. And so. As I mentioned a minute ago, right now antibody scientists use humanized transgenic mice. They inject the mice, the mice raise antibodies to whatever has been injected into them. You then take those antibodies and you figure out which of them is going to be, you know, the possible best molecule, the best medicine.

So no one has ever claimed that you're using that the mouse is an inventor and therefore you can't get a patent because the mouse invented it. Just 'cause the mouse created the antibody. That's the same thing with AI. I think at least for, at least for the near and medium term, the AI will be a valuable tool and sorting through antibodies and sorting through many other kinds of molecules, many other modalities that are out there. 

And it will give scientists more insight and information, but work is gonna be have to done in wet labs still. And then even more important, you're gonna have to do clinical trials. We're not gonna, I don't think there's a time soon that our FDA and other regulators around the world are gonna say, oh, you've proved this thing inside of a computer, so we're gonna let you sell it to millions of people.

They're gonna continue making you do the clinical trials. And that's a lot of work and effort. And that's a form of enablement as well. So I think on that score, fabulous tool getting better and better, we and other companies are using it more and more. I don't think it's a challenge yet to get a patent when you've been using that tool.

So on your question of, you know, how do you use AI? Certainly our scientists are using AI. You know, everyone's using AI now. It's again, I think a super valuable tool, and it makes lawyers, you know, those of us who are lawyers, there's, I dunno if you wanna go there, I don't, you know, I'm sure you have people that are super capable about what the role of lawyers will be in AI in three years, five years from now. Should young people be lawyers and all that? I have views on it, but that's probably beyond the scope of what you wanna talk about. 

JOHN QUINN: So, of course, at law firms also we're thinking about AI and what that means for us, among other things, lawyers are kind of wordsmiths and, you know, the way we're going to work, the way we're gonna do our work, or the way we're gonna charge for our work, I'm sure is, it's already started to change, frankly, at our firm.

I mean, we've developed, in-house, we've developed an in-house methodology and platform, which is specifically litigation oriented for taking data, for taking documents, discovery materials, deposition testimony, and the like, and structuring it in a way that it facilitates the creation of work streams that litigators use, whether it's, you know, deposition examinations, cross examination expert work with the goal that we'll be able to get 80 to 90% of the way to a finished product.

And of course, if we can do that, that's gonna result in enormous savings, which the clients are gonna expect, they're gonna expect that that savings is gonna be passed on, and we're gonna have to find other ways to charge for that, for what we do. But yeah, it's certainly expected in affecting our business as well.

Let me ask you something about another, about biosimilars. In biologics, biologic drugs, most people are familiar with generic drugs that, you know, when a drug's patent protection expires other companies, can make the same chemical compound cheaply and sell it at a fraction of the price.

But in the biologics world where you're talking about drugs derived from live cells, these drugs made from living cells, complex proteins and antibodies, the generic version as a biologic called a biosimilar, it's not identical, but it's close enough to work the same way. I mean, these are a huge deal now, aren't they?

And Amgen is on the both sides of this. As I understand it, you have your own proprietary innovative drugs that you were the first ones to do, but then you also have some biosimilars that you've developed in the wake of somebody else, you know, first patenting a molecule. I mean, how is that? Is there a contradiction there?

Is that within your firm, do you find you're confronting yourself on issues coming and going, in terms of patent protection and the like?

JONATHAN GRAHAM: Yeah. Great question. So first of all, yeah, this is a big, you know, this is a big industry. It is does sometimes equate it to generics for small molecules. Amgen, we have, I think, eight biosimilars in the market right now, and I think there's over 40 marketed biosimilars in the United States now. So the it's a booming industry and we've been, you know, very proud to be one of the leaders in that industry. I think we've generated. I think since we started biosimilars, it's well over 12, 13 billion dollars of revenue, and that's revenue on drugs that as you said, it's cheaper for healthcare systems and patients to take a biosimilar.

And so, and we do then, because we're both on the biosimilars side of the industry and on the innovator side we do see the arguments that come at both sides, and I think that probably makes us stronger because we're seeing, we see what people are saying and arguing on, on one case, and now we kind of have other people argue those things on another case.

And so I think it makes our legal team, you know more nimble and thoughtful about what the law ought to be. And in fact we are often in, on, in capitals around the world, Capitol Hill, et cetera, where the fact that we're on both sides of these sort of arguments as to what policy ought to be, I think gives us more credibility.

JOHN QUINN: That’s a tough decision when you decide you've been, Amgen had been an innovator drug company for a long time, and that came a point where you decide, well, maybe we should go into the biosimilar business. Was that, there must have been some internal debate about whether that was consistent with your historic strategy.

JONATHAN GRAHAM: Yeah, that was a little bit before my time, but yes, it was very much, it was very much a debate within the company. We're still a much more of an innovator company than a biosimilars company. You know we generate far more revenue and spend much more time and money on the innovation side of the business.

But what we recognized, and I think this has played out well, is that one of our biggest investments is in our operations, in our manufacturing. Biologics are very complicated to manufacture, and they take a lot of money. They're not like generic drugs, so you're spending hundreds of millions of dollars, and we knew, and then, and believe now we're really at the cutting edge of how do you manufacture biologics.

There's a lot of science that goes into that as well as a hell of a lot of capital. And so you what we, the thesis was, Hey, we're already really good at this stuff. We're good at making this stuff and if there's gonna be a market for this stuff. Let's get in there and let's make it and let's be the best at it.

And we think we've demonstrated that and certainly customers around the world have appreciated the work that we put into it. 

JOHN QUINN: I mean, one of the things that's been in the news a lot lately is the Trump administration's approach to drug pricing. We hear a lot about that. Most favored nation pricing.

I guess the idea is Americans should pay no more for a drug than patients in other wealthy countries like France, Germany, or Japan. I know this is a new, new thing that's recently being rolled out. Is there anything you can say about how that's gonna be implemented and how that affects the industry and Amgen in particular?

JONATHAN GRAHAM: Well, I'm gonna stay away from Amgen in particular, but I would just basic economic principles, so we see what happens when governments set prices around the world. This is just a matter of, you know, economics 1 0 1, when people that aren't involved in industry set prices and when there isn't competition that drives pricing, then what you end up usually doing is stultifying an industry.

And I think that the unfortunate thing, you don't really see the consequences for 10 to 15 years in our industry because that's how long it takes to develop a drug from scratch to get it so that people can actually benefit from it. And it, and again, to one of the points I made earlier, you know, if you're a venture capitalist and you're trying to think about, well, what industries do I want to invest in?

What small companies do I wanna put money in? If the company you're putting money in has a great idea, but you don't know 10 years later what price the government is gonna set for that innovation, it's very hard to predict what your rate of return is gonna be and thus you're gonna go to an industry where people aren't setting prices.

So I don't think I've said anything that, that's not just economics 1 0 1 number one. Number two, I would point out that in those countries that have been engaged in price setting for a long time. There's two effects of that. One is that industry has largely fled those countries, scientists and companies don't build themselves in those countries.

Countries that used to be the greatest chemists and molecular biologists perhaps in the world, you don't see new companies. Anything like you see in the United States, in Cambridge area and in the South San Francisco area and in the LA area, you just, you don't see it. So that's one consequence, people flee, the dollars flee.

The other consequence is that patients in those countries don't get the medicines, they don't get the innovative medicines, or they get them quite late. You know, in France for example, you'll get a medicine, an innovative cancer medicine that's saving lives in the US. You might get it three years later because the, you know, the government there has a budget and they're gonna adhere to their budget and they're not gonna pay for innovation.

So it can be quite, people in countries with great scientific traditions, that they can't benefit from that, so I would just say that generally about these sorts of attempts to dictate prices. 

JOHN QUINN: You know, sticking with prices, in 1922, the government passed the Inflation Reduction Act.

The IRA, I mean, before for decades, the US government was essentially prohibited from negotiating drug prices, Medicare, but now this under the IRA, for the first time it gave the government, gave Medicare the ability to directly negotiate prices on certain high selling drugs. The first round of negotiated prices took effect this year, 2026, with some of the drugs seen price cuts of 40% or nearly to 80%.

So this, so again, I'm gonna give you two questions. This was a fundamental shift, kind of in the business model, Amgen sells many drugs for older patients. Older patient populations are covered by me. Medicare, I mean, that's, that's, lemme just stop there. That is a fundamental change. And how, how is that going to affect the industry?

JONATHAN GRAHAM: Well, I think I answered that with my last, which is, you know, it's not good for innovative medicine and, you know, our view, is that what the world needs more of, is more innovation, we're, all of our, you know, many of our societies are aging and the developed, you know, the so-called developed world is ageing at pace and for us to stay healthy, as a you know, certainly as a group of older people, you want medicines to be there and you want them, of course for your children's generation as well. So I think it is concerning that at a time when we need more innovation, these kind of policies, uh, drive money away from innovation.

JOHN QUINN: I mean, some of the drug companies have sued the government arguing that these so-called what they would regard as so-called negotiations, are really just the government strong arming companies into accepting the government's price or face crippling financial penalties. Those lawsuits have have largely failed so far.

How do you manage, it seems like there's a real tension here between, obviously, you know, you've kind of mentioned this several times now. But yet the cost of innovation and the pressure on prices is increasing. You have these new rules and laws coming out of Washington. How do you sort of balance that with compliance and also maintaining this?

R and D efforts, which, you know, generates these incredibly innovative, important discoveries. 

JONATHAN GRAHAM: Yeah. Well, again, a lot there. First of all, it's not a negotiation. I mean, the government tells you what's the price is that they're gonna pay, so that's, you know, if someone told you, you know, the government's gonna set your price of a car.

JOHN QUINN: Yeah. 

JONATHAN GRAHAM: Tell you what cost and oh, now the government's gonna, you what your cupcakes. We would, you know, that would be very viewed as very un-American to say the least, and, and not driving the sort of outcomes that you want for innovation. That's, I guess, the first point I would make. But then I would say, of course we are determined to try to make as much of it work as possible.

What will happen, I am certain, is that some medicines won't be developed, for some of the reasons I just talked about a few minutes ago and I'm certain that every company like ours is trying to figure out, well, you know, what medicines in the future will have prices set and by who and what will the criteria be?

And that's been actually one of the frustrating things is trying to figure out what the criteria are, but anytime a government, you know, let's look at the history of the world, every time governments set prices and tell, you know, people that are competing with one another for inventing new stuff, has an impact in this will too. 

But I would say that sort of on the ground, hey, we are working very hard with the folks in the relevant agencies in government to make sure that we're following the rules, that we're providing all the, all the information they need. You know, we're gonna follow the rules.

And that takes, you know, a lot of time and talent to do that as well. 

JOHN QUINN: I mean, what do you see of your industry and work that's, are you gonna able to cure cancers and diseases that are affecting people around the world? Is, are we gonna see more and more of that? Are you optimistic about the potential for invention and innovation in the biotech industry? 

JONATHAN GRAHAM: I am, as a general matter, absolutely.

We have some real tailwinds, right? We have ageing populations. We have these new tools, including AI, that is just gonna make scientists more and more productive. And so those are the, those are the tailwinds we have going for us. The headwinds are pricing pressure from governments and a few other, you know, big ones, but that's the one we talked out here, talked about here.

But I'm pretty, you know, I have the pleasure of getting to spend a fair amount of time with, our scientists and it, you know, blows me away and I know that our companies that we're competing with, you know, their scientists are working like crazy to come up with inventions that will help the world as well.

And I'm pretty optimistic that more and more amazing medicines are gonna continue to be developed. I just think they're gonna be slower and we're gonna miss out on some because of recent policy changes. 

JOHN QUINN: Well, that's a very balanced answer, but it sounds very, very exciting. Thank you for joining us.

Jon it’s been a fascinating conversation. 

JONATHAN GRAHAM: Absolutely. Really enjoyed it, John. Appreciate it. 

JOHN QUINN: This is John Quinn at Law, disrupted. We've been speaking with Jon Graham, the General Counsel of Amgen.

Thank you for listening to Law, disrupted with me, John Quinn. If you enjoyed the show, please subscribe and leave a rating and review on your chosen podcast app. To stay up to date with the latest episodes you can sign up for email alerts at our website, law-disrupted fm, or follow me on X at JB Q Law or at Quinn Emanuel.

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