Martin Shkreli on Drug Pricing, Prison, and the Fraud That Shook Pharma

Episode Summary

Anish Koka and Anthony DiGiorgio sit down with Martin Shkreli — the former hedge fund manager and pharma executive best known for the 2015 Daraprim price increase and his subsequent prison sentence — for a wide-ranging conversation on drug pricing, patent law, and the state of the pharmaceutical industry. Shkreli walks through his path from a teenage hedge fund intern to founding Retrophin and Turing Pharmaceuticals, defends orphan drug economics and the Orphan Drug Act's seven-year exclusivity window, and argues that patent terms haven't kept pace with the realities of modern drug development. The conversation turns to the Chemocentrics/Amgen scandal — in which trial data for a rare vasculitis drug was allegedly unblinded, manipulated, and relocked to manufacture statistical significance — which Shkreli calls one of the worst frauds in the history of medicine. The episode closes with discussion of the Sarepta/DMD approval controversy, the limits of randomized trials in surgery and rare disease, AI's parallels to neuroscience, and the state of media coverage of the FDA.

Chapter Markers

00:00 Intro and Martin Shkreli's backstory

02:40 Origin story: from hedge fund to founding drug companies

07:58 The Daraprim price increase and Shkreli's pricing philosophy

17:14 What it actually takes to bring a drug to market

35:25 The case for the pharmaceutical industry

38:00 The Orphan Drug Act and patent exclusivity

57:31 The Chemocentrics scandal: manipulated trial data at Amgen

1:22:09 Vinay Prasad, Sarepta, and the DMD approval fights

1:34:35 Neurosurgery, clinical trials, and the limits of RCTs

1:37:30 AI, neural networks, and the future of psychiatric drugs

1:40:40 Cardiovascular disease and LDL lowering

1:42:28 Media coverage of the FDA and closing thoughts

Co-Host Handles

@anish_koka and @drdigiorgio

Show Handles

@drsloungepod

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Transcript

SPEAKER_00 0:00

You like your healthcare plan? You keep your healthcare plan.

SPEAKER_03 0:03

Nobody knew that healthcare could be so complicated. We finally beat Medicare. This is the Doctor's Lounge.

SPEAKER_02 0:16

We are live. Well, we are very happy to have Martin Schrelli on the show today. This is a special kind of add-on bonus episode, and so happy that Martin uh gave us some of his time. I'm a I'm a fan of Martin for a while on Twitter. One of the people who has a tremendous amount of insights into the pharmaceutical world, research, RD, investing. I mean, brilliant. He randomly gets into topics like quantum computing and takes down. This is a must-watch debate for everyone that we'll try to link to as well. It's quite spectacular, Martin taking down. I don't know how he knows so much about quantum computing. He was like, but anyway, so thank you, Martin, for coming on. Just a brief little intro to so for folks who don't know who you are. Martin, you were born 1983 in Brooklyn, New York. So you're a New Yorker, son of Albanian immigrant parents, went to Baruch College, got an internship at Jim Kramer's hedge fund, Kramer Berkowitz. And this is while you were still a teenager. And there you made a big bet. The story is you shorted a regeneron, which paid off big. And this is all again as a teenager. You then founded your own hedge fund, Elia Capital, in 2006. You also started a company called MSMB Capital Management, and then ultimately a biotech called Retrofit in 2011. You kind of made a big splash. That's all kind of, I think, conventional stuff. I think what half uh that's like the half of New Yorker's story that I've said so far. But the thing that made a big splash, that you really made a big splash and got on a lot of people's radars was in 2015 you had a company called Touring Pharmaceuticals that acquired um a little known drug called Dereprin, which is a 1953 era kind of antiparasitic that's used in immunocompromised patients. And you raised the price of the drug a fair amount from $13 to $100 to $750 a pill. And that really took brought you up, made you enemy number one, and you were you got a lot of kind of comments. You had to testify in Congress. I mean, we're gonna get into that briefly and what kind of happened there. But anyway, you're way too young to have done all this stuff, but obviously a very bright individual who's motivated. So and you've got a lot of insights for our audience, so we're super happy to have you on. Martin, welcome. Welcome to the show.

SPEAKER_01 2:18

Hey, thank you very much. Great to be here.

SPEAKER_02 2:20

So, Martin, tell us uh just a little bit of the origin story.

SPEAKER_01 2:22

Tell us uh just a little bit of the origin story.

SPEAKER_02 2:25

You're right. There's a little bit of an echo on that side. Um, but very right. Uh but there we go. What exactly uh tell me about Derepren and tell me about touring pharmaceuticals. Like what made you go into that uh from where you were? Because up to then you were a conventional hedge fund investing, making bets on information that you were gleaning. So what made you decide to do do that?

SPEAKER_01 2:46

Well, I was trading drug stocks and I would end up starting to get big positions in drug companies where I would influence them. I had big influence over even large companies like Pfizer and Shearing Plow and companies like that. And then I would just almost be completely controlling some of the other companies, smaller ones. And so at some point, you start to feel like you're in the driver's seat of some of these drug companies, and you tell them what to do, you fire their CEO, replace them with a new one. I figured I'd just do it myself. And I started a company called Retrophone, which you mentioned earlier. It's now called Trevere. You know, as much as it might sound conventional, I was 28 when I started this company, and uh it was my first ever drug company, and it's still publicly traded today. It's a $5 billion company and uh probably one of the most successful companies of that year, at least, uh, that was started. So I got into this clash with the board of directors, partially because of my youth, I think, and um would end up uh starting a new company. And a lot of the a lot of the pricing actions that that we did at retroph and carried over into Turing. So we raised the price of Dereprom, and it was, I think, a wise thing to do, despite the I still think that, despite the the chorus of people that that seemed to want to disagree. Interestingly, most of the people who disagreed were were reporters and people who were never in the pharmaceutical industry or never wrote a prescription in their life. It was much less, or politicians. You didn't get too much argument back from people in the healthcare industry. Uh, and if you did, there was some sort of like, well, I'm not him. I've never done that. Meanwhile, Abbeys raised the price of drugs uh dramatically in many other companies. Uh and then you'd have people that did have pushback, but they would have reasoned thought behind it and sort of have a dialogue. I think the people foaming at the mouth were people that just didn't even understand that there was such a thing as orphan drugs or high price drugs. And to this day, I've been telling people one of my friends has a disease called osteogenesis imperfecta. It's a terrible bone disease. Very hard to treat. It's really a challenge for drug hunters like myself to even theorize what could be a treatment here because you have to traffic to the bone, which is not easy. You have this uh dominant negative effect, which is often hard to overcome. You have this really tiny point mutation that just changes collagen morphology just a little bit. So it's sort of very hard to even picture a drug. But as I talk to some of my friends who don't know the drug industry, they say, Martin, why would you make a drug for disease with a few thousand people? And I'm sitting there saying there's billions of dollars in this. And not only that, but could you take a very sick person and change their lives? That's obviously enormous as well. And you want those incentives to be aligned. You don't want those to be a situation where that's true, where actually, ah, yeah, you know, we we're not going to bother with this disease because there's only a few thousand people. It's a great thing that we have developed this sort of industry that allows us to even care about these patients when previously it was a very cold world where if you had Gaucher disease or if you had, like my friend Ray from high school, had cystic fibrosis, he's he passed away. If the orphan drug business existed in the 70s and 80s, we'd still have Ray. Unfortunately, that's just the nature of the pharmaceutical industry. It's taken decades and decades to build up to the advanced state we're in. And we're here to talk about lots of things. But one of the things is how do we keep and that state and nurture it and make sure that it doesn't fall apart? And this recent story uh about chemocentrics is sort of, in my opinion, between that and the peptide craze, you sort of have this double whammy of what the hell is happening to medicine? And it's almost an emergency where we have to do something uh before this entire edifice collapses. And so, you know, the pricing stuff, I think you've heard all my points before, and you've heard them from others. Like there's certainly free market, there's certainly in the law books, there's the law doesn't regulate medicine. There's no difference between pricing a hamburger and pricing a key prescription. I used to give that example, people didn't love hearing that. It's the truth. It may not be eloquent, it may not be the best example to give, but at the end of the day, it is that is the way it is. If we want to regulate drug prices, make that the law. Don't legislate it through the media, don't legislate it through some other back end way. We're gonna talk a little about prison today, as I believe that's one of the solutions to one of the problems that we're talking about. But I've been to prison for unrelated matters. I had a small hedge fund that made a fortune. You mentioned them, you mentioned one of them. And then I still found myself behind bars, but the the big cloud over me was this drug pricing thing. So to me, the best way to if you want to fix drug prices, you don't just bash the guy trying to raise drug prices. You actually make a law and you say, okay, drug prices are now regulated for everybody. And if you do that, then at least we know what the rules of the field are. Without that, you're basically trying to just shun people that in many cases are actually trying to do the right thing, which we can debate and talk about.

SPEAKER_02 7:03

But that's sort of the the brief example I used to go ahead. So you've you've you've talked about the fact that you're just ex you're basically exploiting the rules of the system, meaning not exploiting, you are playing by the rules of the system, I should say, right? So there's the Orphan Drug Act, there's the Hatch Waxman Act, there's also the ability to close off distribution. So there's a couple things, right? I mean, the issue folks I think had was that this was a generic drug that was very, very cheap. And there's an arbitrage here that seems not right to kind of exploit. So you would be in favor of saying, all right, let's close that arbitrage. Is that what you're kind of saying? Like, or are you saying, because I think you're I also hear the fact that you're saying, look, if we want more, if we want more innovation, then you gotta let people make a profit so that we can have more innovation. So are you saying both things?

SPEAKER_01 7:52

Yeah, so there's a bunch of things here. So that's why it's so hard and complicated. I mean, uh, on one hand, I'm just sort of stating the fact that what happened to me, and I believe that the only reason I went to prison was because of Dereprone. Even though there's no legal basis for that, we society tends to find a way to punish kind of folks that it deems are doing wrong, even if they're not actually doing wrong, but it feels like it. So I think in terms of regulation, if you want to regulate it, this is the argument I had with Hillary Clinton and Bernie Sanders. You can shame me all you want, but you can't do anything about it. Well, unless you regulate it, there's only one path here, which is it's kind of putting the question to the politicians. Say, do you want to regulate drug prices? Yes or no. I'm gonna do this. Whether you regulate them or not, you have to decide after the fact what your path is gonna be. Because you can't sort of say, well, we're gonna half regulate it. Sometimes when we don't like the guy that we're gonna regulate, and other times we won't. You either have to apply the rule evenly to everyone, no matter how bombastic or pompous or a jerk the person seems to be. You still have to give the same rule to everybody. And I think that's sort of what I'm getting at with that. In terms of like what's best for the world, I think a lot of people make this like pretty simple math error with Dereprim, but where they assume that the prior price was fair, so that the new price after the price increase was unfair. And I think that's sort of like a very human heuristic that like serves us well. If you go to a store and something went up 50x in price, you'd say, wow, unbelievable. How could that be? Not sort of not the case in medicine often, where you've had a company like Smith Klein Beecham or its predecessors that owned a drug from the 60s and never raised the price of it. And so you'll have a drug that's so out of whack with modern pricing. Dereperm was on the verge of being discontinued, which was a very serious problem if you have trapenosis, not trapenosome, if you have uh toxoplasmosis or toxoplasmicombi, you certainly don't want to be in that position. And we're seeing new parasitic infections popping up all the time. And resistance is a thing that happens to every organism: virus, parasite, doesn't matter. Resistance does evolve over time. And this is a drug that hadn't been updated in 70 years. And so we took it from on life support to sort of long-term recovery, uh, but still not in great condition. So the drug sort of never did more than 100 million in revenue, which is sort of a pipsqueak compared to drugs like Botox or Skyrizi or something like that. Dereprim, at its peak, after its massive price increase, is like 10 minutes of Skyrizi revenue. So I think it's important for these drugs to have a stable supply chain where the company that owns it cares about it. I did this with a drug called Thioola, which is uh one of the main drugs over at Retrophin. We raised the price of thiola about 20 fold. Thioola had gone out of stock. And the people with thiola is uh a drug that's used for cystinuria. So it's a kidney stone disease and it's a terrible genetic illness uh where you have recurrent chronic kidney stones. Thiola's extremely good for it, but the company that owned it, a small family-owned company, had it out of stock for a year. They just forgot to buy API. The drug wasn't big enough. You don't forget to buy the API for Enroll. You don't forget to buy the API for Premar. You don't forget to make the API for Kitruda. Well, you'll never forget that. But your 87th drug at Merck or your 212th drug at Narvartis. I actually had a meeting at Novartis once in Basel where I was looking to buy one of their older, crappier, kind of out of stock, nobody cares about drugs that human beings still need. But the guy Novartis, I'm asking him questions about the drug, he doesn't seem sure. He doesn't really know a lot about the drug. And I said, Is this the only drug that you that you're responsible for? You know, because he can tell that I might know more about this drug than he does. And he says, No, Martha, this is uh one of 43 drugs that I'm responsible for. And I'm like, that shows you that there's there's like thousands of companies for Glebec, thousands of people for leveck, thousands of people for Diovam. When it came to drugs like closerol, old old antipsychotic, the guy's got to juggle this and 60 other drugs because no open artist doesn't want to put resources to that. So what do you do if you're using closerol? Well, you've got Michelle, that drug, and 43 others to look at. And Michelle might just forget to make API. And the promise of our company, Turing and Ritrophin, which has done marvelously well. Nobody complains or protests about rotrophin, uh now called Trevere. The promise is that we're gonna take care of these patients. We're gonna take care of the ecosystem, we're gonna take care of the supply chain. We're in charge of fair price, one that insurance has never pushed back on. And that's our business. And anybody that doesn't like that can shove it. We did amazing uh research on new versions of Deraprim that were potent DHFR inhibitors for T Gandhi DHFR. Daraprim wasn't designed at all, even people know much about chemistry or medicinal chemistry at the time. It was created by the sort of scattershot, but it was a very potent human DHFR inhibitor. So if you can make a drug that inhibited just the T Gandhi DHFR at nanomolar potency without inhibiting human DHFR, that'd be nice. And of course, drugs like methotrexate and others, there are many DHFR inhibitors. Uh, but ideally you'd want to inhibit that. So we made the first co-crystal of a drug with a T Gandhi DHFR. That was real science. This stuff costs a lot of money. And uh, we published in J Medchem, one of my favorite journals. So, you know, research doesn't all look the same. I think people think about research as moonshots that cure cancer. Sometimes you need to upgrade a drug. Sometimes you need to make sure that the drug's there and people are getting it. That's not research per se, but it's in a way maintenance that we take, uh, we give you sort of a sue will happen. And sometimes that doesn't. And what happens when your patient, we did another drug called kinodol, which was actually removed completely from the market, uh, quinodeoxycolic acid that Solve, the old chemicals company, made. And quinodeoxycolic acid is for glowstones, but what nobody realized is that there were 50 patients that used it for another rare disease called, for an actual rare disease, glowstones not being rare, uh, called uh cerebrotend dentomatosis, CTX. CTX is a disease almost nobody knows about, but kinodeoxycolic acid is remarkably the only treatment for it. And so solve a discontinued drug, and there's this big race to save 50 people's lives uh that were just left for debt. So I'll take the arrows in my back. If it means that uh the patients get their drug and we have a good business, I can take the punches. Being in hedge funds for a while teaches you that. So I think there's something I would change, is is sort of the way I communicated it to some extent.

SPEAKER_00 13:42

What that's why you're here, right? Is to help help communicate that. Go ahead, Nish. No, no, no, go ahead, go ahead. Sorry. Go ahead, Anthony. Well, I was gonna say, you know, I think drug pricing is so unique because you have this massive product regulation and then you have this massive layered price regulation. I don't think a lot of the public, even our audience relatively well educated, don't understand what really goes into like bringing a drug to market. They say things like, oh, you can just have the government negotiate to bring the price down, or just have the government do all the RD and then some company just swoops in and takes the drug to market, right? That's not how that happens. And so can you maybe educate us a little bit on what goes into actually getting the capital flows and how much these regulations, like the IRA and what it's done to price exclusivity, what that has done to capital flows, and how too many regulations may maybe inhibit the next big miracle drug that we want to see.

SPEAKER_01 14:30

Yeah, it's really interesting. One comment I have on this that that'll be fascinating, I think, I hope, is there's often this bandied about Tufts kind of number of it takes two billion dollars to bring a new drug to market, is complete bullshit.

SPEAKER_00 14:41

It's just a matter of number that's I'm guilty of using that number too. Oh well.

SPEAKER_01 14:45

It's so nonsensical. I mean, no two drugs are alike, right? And if you take a rare disease, I'm thinking of one right now. Well, I worked on one called panathetic kinase associated uh neurodegeneration, terrible, horrible childhood disease. And this is the stuff I spent the Dereper money on. So it was kind of like, you know, trying to do that.

SPEAKER_00 15:01

Wait, I thought it was just your fourth private jet that you bet spent that money on.

SPEAKER_01 15:03

Right, exactly, right, right. And that's that's actually one of the reasons I started live streaming was because I felt like I was taken out of context by the media. I wanted people to see my real life. And I was doing this at a time when live streaming and podcasts and stuff like that barely existed. And people said, Martin, you're so weird. Why are you doing this live stream thing? And I said, People think I'm a frat, bro, jet fourth private jet guy, and I'm just a humble scientist trying to do my job. And I work really, really hard. I love medicine. Uh, I've been addicted to medicine since a little kid. I didn't become a doctor, but I did the next best thing. And so, so PCAN, uh, this disease, panathenate, you probably recognize vitamin B5. And so these poor kids can't turn panathenate into phosphopanathenate. They can't phosphorylate it, they have a kinase mutation. So there's a chain that creates CoA from PCAN, uh, from panathenate. And so the pancenzyme, panethanicinase, is disrupted. Now you can replace the enzyme, which is what some people would think, but the better idea, I think, is to replace the substrate. And so if the kids can't make phospho B5 because they're missing the kinase, you can give them phospho P5. There's some chemistry tricks here, but it's a really good idea. To make this drug and get it to FDA approval, I don't think it would cost you a hundred million if you tried. You could probably get it done with 50 million. And so there's people dying of this disease, wretched, horrible disease. You know, it's been a while since I've been in medicine, but I'm trying to remember the dystonia is the main sort of symptom, this crushing brutal dystonia. And you see a child, I just had my first son, you see the child dying of dystonia, and you just sit there and say, How could how could we live in this world? We're in this rich world where we have all these solutions. You just have one chemical transformation. This isn't Huntington's disease where we don't know what the hell is going on or Alzheimer's. This is a really simple enzymatic disease. Somebody should fix this. And for me, I I like solving the problem where, yes, I can make a lot of money, but also it's very plausible and easy. I'd love to solve Alzheimer's. I'm not sure I'm not smart. I think the when you have the low-hanging fruit and you're still a hero if you save the day, even if it's not a complicated problem. In some ways, you're more of a hero, in my opinion. Um, so I think that the hundred million bucks here or less could probably applies to almost every rare disease drug. You could never spend a billion dollars developing a rare disease. It doesn't make sense. Could you spend a billion dollars developing a diabetes drug? Yeah, you could, but what's misleading about that is that it's kind of like poker. If you have two aces and you put in $1,000 in the pot, well, you know you have the two aces. So you've got a pretty good reason to bet. And so the two billion, a lot of that two billion comes at the end where you have a winner, you have a GLP, you've got a great vaccine, whatever the case is, there's no reason not to invest. Whereas if you sort of were just the drug company that said, I'm gonna bet $2 billion on a random toss of the dice, it doesn't work that way. So once you get more evidence, oh, the phase two looked really good. Now I want to invest $300 million on a global phase three, that sort of makes a lot more sense. So I think the the money part about clinical trials is a little tailwagging the dog. The biggest problem in medicine is coming up with therapeutic hypotheses. Why is Alzheimer's, why does Alzheimer's do what it does? I believe it's ApoE disease. We have great genetic evidence for that. There's clear gene dosage. Everyone wants to focus on beta amyloid, or at least has focused on beta amyloid. Folks are focusing on other things now. After that, has been sort of done to death. And so the question is not just, okay, what's your target, but how do you design a clinical program that actually shows a drug working around that target? So it's still this like very mysterious, weird disease. I talk to AI companies about this all the time. They want to say, Martin, you're one of a handful of guys that have taken a drug from idea to an FDA approval, at least solo or close to solo, teams of hundreds and hundreds of people at Merck doing sort of a Me Too. They matter a lot too, and they've done a great job. But you've got Vivake, you've got uh Vlad at Biohaven, you've got the Bridge Bio guys, you've got a couple of other known, well-known entrepreneurs. But how do you do it? And my answer is I'm not sure a machine can do this that easily. It's going to be interesting to see how anthropic and my wife works at OpenAI, how these folks go about pharmaceuticals, if they're going to go about pharmaceuticals. Because I think it really is this kind of Sherlock Holmes thing where a lot of it comes from clinicians and academics and folks that are kind of just have the eureka moment that machines seem to have these moments too. But how do you think about one lateral innovation now impacting your field of rare epilepsies or whatever the case is? And you say, well, I actually think something could work here. And the problem is, as you mentioned, let's say you have that idea. Where does the capital come from? And this is this was the hardest thing in the world for me as a 28-year-old entrepreneur who had a sort of so-so reputation in biotech hedge funds. I was a great stock picker in some ways, but not a great fund manager in other ways, which required lots of other kinds of talent. So I went to hedge funds and wealthy people. Traditionally, you would go to a venture capitalist. Well, the venture capitalists are kind of this cabal. And when you go to them, you say, I have a really good idea for a new drug for Drave A syndrome. They say, Sounds great. You know, tell me what you what you want to do. Well, I need 50 million bucks. And they say, no problem. You know, we have 50 million dollars, but we need 85% of the company. And you're sitting there saying, How did Mark Zuckerberg do it? Like there's there's there has to be a way to raise this capital without giving away everything. And if you give away more than 50%, well, right then and there, you're going to get replaced by somebody the venture capitalist knows and trusts, not you. So it's a really tricky, really, really tricky. A mouse experiment costs a million dollars. You can get three good engineers, three great engineers, and probably, if you're hardworking enough, five great engineers or more at a software company and turn a profit faster than doing one mouse experiment. So there's something kind of problematic about that, where it's really, really hard to do good science without huge amounts of cash. At the same time, the drug industry has some other benefits where you get monopolies, you get to have this amazing humanitarian impact. I think it would be nice if there was a friendly industry. When I first started, I had this drug that we bought uh from Bristol Myers. And I went to 80 drug companies and I said, look at this amazing drug. And I walked them through. This is gonna be a huge truck someday. Oh and behold, it became a huge truck. It's now almost a blockbuster truck. Uh, and this is all my idea. And 80 drug companies, 78 didn't even want to meet it. Like some of them opened up the deck and said, whatever. Vertex and Abvi took meetings and uh neither pursued it. And I learned how just how cold the world is after that. I was just like, these guys will never, they're gonna just wait till you die, and then they'll help you out then. And that was part of the reason for Deraprim and these other drugs. Said, I'm not gonna let these assholes decide whether I'll succeed or not. I'm gonna make my own revenue, make my own profits, and I'll be a real drug company, just like they are. They can afford to say no because they have you Myra cash flow coming in out of their ears. I'd say, I need to be in that position where I have a little bit of revenue to tide me over in case somebody wants to step on my neck and say, I'm not giving you this money, come chase it. And I don't want to feel like uh like an animal sort of trying to chase the money. Uh so I think that was sort of the strategy that I had. Other people have other strategies. One of them is to lie and to to sort of hype up, hype up their drug. And then you raise capital, and then you sort of have to figure out what you do with lie now.

SPEAKER_00 21:37

So as a segue to that, I know Anisha's dying to get to that so rap. Yeah, I just know you're dying to get to the damgen thing. I really wanted to touch on China and how they're reducing that early human trial friction. I think that's something that our audience probably isn't too aware of. And I know you've dealt in that space a little bit. And then Anish, I promise we can go to all your controversies that that you're dying to get to.

SPEAKER_01 21:57

Yeah, it's funny. I mean, I used Wuji a lot and I've been, it's such a crazy story because I've worked with so many great chemists, but sometimes that therapeutic idea wouldn't come from me, and the chemists would do their magic, and I'd work with them and I'd sort of understand what they were doing, but mostly let them do their brilliant work. But I was kind of one of these CEOs that was really hands-on. I wanted to understand exactly why we were doing the things we were doing. And so I would learn a lot of medicinal chemistry from amazing coworkers. And uh ultimately we would we invented maybe a dozen different chemical series over my careers, over my career. So a dozen different MOAs for a dozen different diseases. I've never once been a lab. I've toured labs at academics and stuff like that, but I've never once used a sonicator or pipette or anything like that in a commercial setting, even a flask or something like that. And the amazing thing is send emails to China and they do it and they take pictures and send it back. And you're sort of sitting there reading meth. I've read so many journal articles over my the course of my life, really good student of that, reading materials, reading materials and methods sections, having funded so many clinical trials, you feel like you can run one yourself. And so with the right help of the right colleagues, you can. And those experiments uh would reveal kind of next steps and things like that. And so the labor cost in China just being so low, you have this ability to do preclinical work very quickly there. The problem is again, you're idea gated. So you have an idea like make an alk, you know, an alk cancer inhibitor for lung cancer or an alk mutation inhibitor or ret or one of these other exotic mutations. Well, now before you know it, there's 85 retinitors. You know, what do you what do you do with that? That's not a business you want to be in if there's 85 red inhibitors. And it's funny because Bristol Myers bought turning point for three or four billion. I think it's a red or alk inhibitor, and I think they're doing like five million in revenue. I mean, Bristol paid overpaid like by a hundredfold for this. It wasn't like a 10x mistake, it was like a hundredfold mistake. And you just can't be in a business where you're the 18th age EGFR inhibitor. That's actually not such a bad business because everyone has an EGFR mutation. But the the RET, the ALK, the like these ROST one inhibitors, like these you got 1% of lung cancer with this mutation, and 85 companies that have drugs for it, 15 of which are in clinical development, five of which get approved, all chasing a couple thousand people. Uh, it doesn't matter how high the price is, it's still a bad business. Uh, so I think that the preclinical bottleneck kind of widening a bit. And they the my guys think that this is their big bottleneck. The reality is that's not the bottleneck. The bottleneck is the idea, the brilliant idea, like DuPixent, the aisle four for, you know, aisle four for for atopic diseases was really brilliant and it changed the world. That thesis came from somebody who read some literature, digested it, and had said, I want to make this bet. And he had to convince the the brass to put the money in and so forth. So I think China has this like they have the machine, they have the manpower, uh, but do they have the creativity? And we've often seen a lot of people who criticize China say no, but many people are now saying yes, they do. And we'll have to see that you certainly have the chemical matter creativity, but the therapeutic hypothesis creativity is something that just doesn't come along in general in biopharma. There's only 40 drugs approved every year. And if you really think about, okay, who had a real genius idea and really kind of thought outside the box on this one, I'd say there may be five drugs like that every year. And that's on the whole planet Earth trying to do this. And so if you think about it, that's a hard problem. And AI is great at hard problems. I know from the math side and things like that, but can it really push across the finish line in this really competitive world where five times a year we have somebody that's really seen the mountaintop and China, between China, America, and sort of AI, I hope that number goes up because it means fewer and fewer disease for patients. Uh, but ultimately, I'm not one of these people that I'm extremely patriotic, but at the same time, I don't know that there's any nation that has a monopoly on ideas and a monopoly on medicine. I mean, I think that a lot of the great medicines have come from Europe. Uh, Jansen was the most prolific drug inventor ever and obviously sold his company to the entity of JJ that bears its name. But he was somebody that made an enormous amount of strides in antipsychotics and other medicines. And then certainly Americans are no stranger to huge amounts of innovation there. Australia created the HPV vaccine, obviously Noble Nordisk did their thing with Denmark. So I don't mind that China's trying to make medicine. I mean, it's a great thing in some ways, it's a sign of a civilized civilized world. Should we be doing business with them to the point where it's almost like tech repeating itself all over again, where Apple sort of says, well, it's a little easier to do it out there. And now all of a sudden you turn around and say, wait a second, what happened? Why are we at their mercy? I thought these guys were just suppliers. And I do think that's the kind of thing you have to watch out for a little bit. And God forbid there's a war or something like that, you're really in trouble because of something like that. And that's, again, one of the things that I really believe in for a lot of drugs is the second supply chain, which most companies don't have a second supply chain. They generally don't even think about a first supply chain, especially for the bottom 200 drugs at a big pharma. And I think that's sort of one of these things where if you think about it and say, like, well, if it's my child or my loved one that that's dependent on some drug that keeps them alive, I sure hope there's a second supply chain because there are, there is war. There is plant shutdown, companies change hands, things happen. I mean, when Genzyme had their water changed at the Framingham plant, that shut down serozyme, myozyme, and uh Fabrizyme production. And every person with Glochet Fabre and a Pompeii was sitting there saying that the water, the water change in the city of Framingham is what me had the wrong Boston city, but it was a water change, unplanned water change from a city in Boston that resulted in a massive out-of-spec situation for basically a biologics plant creating enzyme. It was so sensitive that the drug stopped working, they had to shut it down, there was rationing of the drug, all this stuff. And it's like this is this could have been solved by a simple thing called money. And as much as we want to be upset about drug companies making money, there is kind of this healthy, you want a healthy drug industry, you know, if you want to starve an industry, starve tobacco, starve social media, starve something else, don't starve pharma, you know, where real people have real problems and the politicians want to be good guys. And I get that, but I think Trump, to his credit, has done an amazing job of understanding that pharma's sort of American pride. We've made the best drug industry and the best medicines in this country. It's part of one of the many things that America does really well. Let's keep that going and let's not try to hurt our industry. If we want to see that other countries, for example, are getting drugs cheaper, well, maybe we should raise the price on them. And that's kind of something that historically has never been sort of done before. And that's sort of been the suggestion that sort of comes with its own pros and cons. But I think that there's a lot of sort of loving that pharma is missing. The people that advertex that solve cystic fibrosis, I think they should be parades for them. I think there should be heroes bigger than our New York Knicks that won their championship. Why aren't there parades for those people? I mean, I think they truly have changed the world. I like basketball too, but I think that there's just a kind of a lack of love for this industry that that bothers me so much. And it really pains me that I contributed to some of that dislike and distrust of the industry because it is a beautiful industry that means to help people 99% of the time. Sometimes, though, as we'll soon see, even the even uh yeah, even doctors and people entrusted to make sure these things are real can can uh can fall.

SPEAKER_02 29:03

So, Martin, yeah, that's fantastic. I mean, who knew you would be such a uh fantastic advocate for pharma? I mean, you you've just done a brilliant job there or in the last uh five to ten minutes, like describing why. And again, you know, I I say this all the time, so I'm sorry if people are getting bored. I have a daughter who has a solid organ transplant, she stays alive because of FK 506, right? So yeah, so the list of uh pharmaceutical accomplishments are huge, and that's why civilized societies need to figure out how to reward folks that innovate. And but it's very complicated. And so there's all these little details, and the problem is that of course, anytime you set up a system, there are folks that can get abuse the system. So you set up a system that if everyone's using it right, the right people profit and stuff. But it gets into these details. So, like I wanted to ask you two specific things, right? I mean, the Orphan Drug Act, right? Uh the Orphan Drug Act is an act in the 1980s where if you if they're for if it's a drug that is going after a disease that afflicts fewer than 200,000 Americans, there's tax credits, there's expedited FDA review. And for seven years, if you're first to market, if you're the first one to to bring something that works, for seven years you get an exclusivity. Like the FDA will not review any other drug in that's going after the same thing in order to try to protect give companies incentive to do it. So that's great. But of course, that on the flip side puts a lot of pressure, it creates a lot of pressure for a company to meet that bar, to get over that efficacy bar, right? So it puts the onus on regulators to really get that part right. How do we deal with it, and so this is what how do we deal with companies that first of all, is that a reasonable do you agree with that? Is that the best way to do to go to approach folks with rare diseases? Seven-year exclusive patent detection. Yeah.

SPEAKER_01 30:45

It there's a great book called Orphan Air Exclusive Patent Detection. Yeah, there's a great book called Orphan. Now, normally if you invent a drug, you get 20 years, right? So you get 17 years from your patent date, your issue date, or 20 years from your filing date. So the seven years is nice if and only if there's some old drug, failed drug from Pfizer, that you can take and say, actually, this is going to work for some crazy genetic disease. And that's sort of where that seven years was meant to be really great, because otherwise you might say, well, I can take Pfizer's drug, spend all this money, and then in three years of generic or five years of generic will come blow me out of the water. So the seven years kind of gives you this nice thing. One of the early drugs in my career is a drug called Droxydopa, which was approved in Japan for neurogenic orthostatic hypotension. And orthostasis is a serious problem. Droxy dopa is a L-dopa precursor. So it literally is sort of transforms to dopamine and orpinephrine. And so it it was approved in Japan for 50 years. So there's no intellectual property on it. So the seven years gave us that incentive to bring it to America. And it's been FDA approved and when generic in the time since. And so the seven years is kind of this thing that's really important. It's funny, my friend was thinking about selling this company, well-known drug company, to Bauch and Laum, uh, to Bauch and Laum, well-known drug company to Berkshire Hathaway. And uh he met with Buffett. And Buffett was sort of sitting there saying, This is the craziest business I've ever seen. You make you work your butt off, you make an amazing invention, and you've got the time ticking until it's kaput. Imagine going to Sam Altman and saying, Sir Altman, uh, sorry to tell you this, but the Chat GPT pants expiring three years and it's all over. You know, you got to make something better than Chat GPT. And it you would just sit there and say, Are you out of your mind? That that's a really hard business to be in. So the things that come from that, the super high price. If you didn't have that problem, maybe orphan drugs would be a lot cheaper. But again, you still have this problem of you have to it have to have it make sense for the the company to sell a drug for a few thousand people. Now it's gotten to a point where nobody needs an incentive for orphan drugs anymore. It's a massive business. Almost every big pharma has orphan drugs, and most cancers, you could argue, are orphan drugs at this point, uh or eligible for orphan drugs, especially if they're genetic mutation specific. And that's directly Martin because of the drug. And that yeah, the 200,000 choice was this arbitrary kind of thrown out by some lobbyist kind of choice. And back in the day, MS was the big one that was like, does it, does it, is it really under 200,000 or not? And at this point, I'd almost not even think about the sort of idea of what's an orphan drug or what isn't, because things have changed so much. I remember when Enbril was released, the gen the price increases have gotten to a point where Enbrel's priced like an orphan drug, uh humyra and drugs like that. So we've gotten to this place where specialty drugs in general are just so expensive. And one of the big problems here is this therapeutic sink, or a better way to put it, a nicer way to put it, is there's an arm inventarium of medicine that we just add to the brick of pharmacology every year, right? So when I was a kid, you had statins, you had barbs and aces and stuff like that, and they all got added to this armamentarium. They went generic. And so anybody can make them, they're a couple of pennies, but they're permanently in your medicine cabinet for every doctor to write a prescription pad and the patient picks it up at the pharmacy. We don't need new hypertension drugs. We don't need new, well, you you could quibble about this, but we generally don't need new lipid lowering agents either. And each time we add something to this firmament of medicine behind us, it this is rich tapestries, cornucopias, pharmacopia of amazing medicines that we can reach and say, hold on, you have gout, I can give you alpy and all, or I can give you this other one. And you no longer need to make a medicine for gout. You'd be crazy too. We have really good drugs for that. And so as we cross lists off, cross diseases off this list of human malady, we sort of say, Well, what's left? In the 90s and 80s, you have this rich, amazing the bullseyes to sling your arrow at every everywhere. And now you're realizing that actually there's not that much left. And that whole 10-year patent thing, 20-year patent thing, whatever amount you give somebody more than I think, you're still gonna end up having to put it in the medicine cabinet that everybody can get to. And so when Vertex, when their cystic fibrosis drugs go generic, now what? Those drugs are now permanently, they were $300,000 a year. They're now going to permanently be available to be made for pennies. And so Vertex has to take their money and go figure out what to do with it from there. Nobody's shedding a tear for them. Uh, but you certainly can't just make a Me Too cystic drug because those are curative. So how do you beat curative? You can't. It's just a permanent kind of next, you know, the next diseases we're running out of stuff to do. And I think that's the biggest problem pharma's coming up against. And some of the stuff that's left needs more than 10 years of patent protection. Uh, so Alzheimer's is a really good example where if we're really gonna hit this disease hard, we might need to do a 20-year clinical trial or something crazy like that. And that seven years orphan status, not applicable in the case of Alzheimer's, but there's a five-year NCE status, that's not gonna help. I mean, I'm not gonna spend 20 years doing a clinical trial to get five years of exclusivity. Now, there is the new biologics exclusivity, which is 12 years. I don't know how what lobbyists got that done, but a biological drug, which is theoretically is no different from a small molecule, I mean, in many ways, but that there's 12 years for that and five years for a chemical. So does that enough incentive for Lily to say, I'm gonna do a 20-year clinical trial for an Alzheimer's drug? There's never been such a trial done. Lily's doing these trailblazer studies that are like cognitively normal, diagnosed Alzheimer's patients. They're gonna follow them for a long time, but you still have to wonder about that patent because, you know, uh the patent thing is sort of unforgiving. So I think maybe if it'd be great if the if the government started to think about, well, in this one case, maybe we should have a 30-year patent or 40-year patent because it's gonna take 20 years to get there. So the innovation system is broken. It was written in a world where like you would patent a new kind of toilet paper roll or something, and you just invent it on the spot and write the patent down and you'd be done. That's not the way the world works anymore. You have to do RD in semiconductors, you have to do RD in pharma for years and years and years. So it sort of makes sense to try to let these these and incentivize these people to sort of do this research in the first place. That's what patents were made for. So I think the Lurfin stuff is now like less important for us to worry about. I think the harder thing is you do have these N of one diseases where uh my friend with a, you know, some of these mutations will cluster, some of them won't. And if you're trying to solve his direct disease, we need to do something about that mutation. How many people have that mutation of a rare disease? It's not that many. And we know in uh non-small cell that for EGFR, there's specific amino acid mutations that these drugs are indicated for. If you have T190i, you get this drug. And that's a beautiful thing, but in HIV is sort of similar, but it's not gonna be economical to save my friend Hunter. And we really want to save my friend Hunter. And it's one of these things where we say, how do you incentivize that? And science and technology isn't there yet. The peptide bros want to say, Well, I mean, just I'll make my own medicine and do it myself, which is kind of like in many ways, like a noble uh kind of gesture. And one super billionaire uh friend, I won't say who said, Martin, isn't that how medicine started? And I was sort of flummoxed for a second. Yeah, I guess it is kind of how medicine starts. People would take bark from a tree, it's like, ooh, I feel better. That isn't wrong. But at the same time, it's probably not the way we should be doing things. But it for somebody like Hunter who has no choice, I don't recommend him to take random peptides. He's not taking random peptides. But what do you do for somebody like that, where each disease is a little bit individualistic, and people who have depression or schizophrenia or whatever, those patients aren't all the same either. There's this polygenic kind of contribution to some of those diseases where your dystemia or your severe depression or your sort of melancholy or however you want to characterize somebody's depression, there's no exact overlap. Uh it seems to be the same, but the polygenic kind of contributions from hundreds of genes, arguably, you have an individualized depression that an SSRI may not be that great for, ketamine may be really good for. So I think the future of medicines can be really interesting.

SPEAKER_00 38:24

I'm not gonna necessarily be fan of it, but we'll see. That's a good you're almost thinking like a surgeon now, because we we look at every like if you've seen one spinal cord injury patient, you've seen one spinal cord injury patient, right? And so we almost treat every patient as an N of one with tailored surgical plan and all that. Manish? I had no idea.

SPEAKER_02 38:39

Martin, uh so would you say that so you're a fan of generics, but there needs to be a certain amount of time to recoup RD, etc., right? Would you say that for instance the Hatch the Hatch Would you say that the Hatch Foxman Act kind of set up this thing where you had a new drug application that demonstrated bioequivalence, right? In order for a generic drug company to do that, they need sample of the other drug, right? There's a bunch of different gamesmanship that happens in terms of you as a company that's done the RD and's produced it. Obviously, nobody feels really good about being like, well, okay, even though the time has passed, X number of years have passed, here you go. Make my other make my thing, right? I mean, that's kind of a so what are your thoughts on that?

SPEAKER_01 39:19

Yeah, it's a question I've thought about for well over a decade, maybe even two decades. And it's a question for whatever reason I've been able to contribute to the body of uh law or science on this. When I started doing this, and I hope to give people just a different image of it before you, I was actually extremely careful about this because thalamid had sort of undergone this. The reason thalamid never went generic for a long time was that they had this REM system. The REM system was sort of FDA imposed. Well, Selgen realized this was the greatest thing ever for them, because if the tratogenicity of thalamid was so severe that patients had to like swear up and down, sign 55 quorums and subject themselves to this monitoring that they could never ever ever take this drug and get pregnant. Now, these are my multiple myeloma patients who are on average about 70 years old. So I'm not sure if they need that much protection. But regardless, uh MM is not a disease that strikes the young. But independent of that, they've learned that, man, our drugs under lock and key. Nobody's getting this drug. There's no pharmacy that's going to stock it. We're going straight to each patient, and nobody can ever get a sample. And it was kind of this amazing thing for them because, and actually an amazing thing for medicine in general, because those cash flows from thalamid allowed them to make revelamid, allowed them to make pomelid, and allowed them to make huge advances in myeloma. So in our in some ways, it was kind of a good thing for society that they outfoxed the generics. Now, at the same time, we do need generics. I do think that's that's important. Otherwise, for there to be cheap herbs that we'd have to have like a normal price war like we have with RAM or fast food or something, where everyone went through the NDA process and you just kept lowering the price of your herb and ace. And that was sort of what pharma was before generics were existed at all. But getting back to the point, I mean, I feel like there's the when I was looking at this, I studied the Selgene case very closely. And I talked to a number of lawyers, and there's an ironclad case from a long time ago called USA versus Colgate, I think. And it was basically this idea, the Supreme Court said that there's no duty to deal. And what that means is that you don't have to deal with somebody if you don't want to. Um, so you're you cannot force a company to sell its its samples of its drug to a generic and that thus enabling the generic to compete with you. And so I went to trial on this with FTC, that's a civil case, and I lost. Um, and it was a remarkable situation because I've never seen a more biased judge in my life. And this judge just really disliked me, uh, probably because she read some article about me or something. And I was the CEO of the Dereprom Company only for about six months. There are four other CEOs after that. None of them lowered the price, and none of them gave samples to anybody. So it was all those sort of pressure and punishment came on me. I think that again kind of goes back to the Hillary Burney thing where it's like, look, if you want to make a law that says you have to supply the samples, then you can make that law. But the problem with that law is now you're brushing up against constitutional Supreme Court sort of precedent of, okay, now in America, I can force a company to do business with another company. It has happened in the past with C Lex and telecom companies, where you can't dig up the street again for fiber. So can you force Verizon to lease me all the lines in New York City so I can compete with Verizon? And so the courts have gone back and forth on this a bit, but it's also one of these things where you have this judicial deference where I had this case and I was banned from Pharma for life, uh, which has never happened before, by the way. Nobody's ever been banned for life from an industry that they've decided to commit their industry to, their life to. And it was just sort of this comical case. And so I tried to appeal it, but there's deference to the district court and and so forth and so forth. The Supreme Court never reviews any case. So you're just sort of shit out of luck. And I think that the greater point here is that I'm not sure the doors closed on this topic. A future Martin Scrowley will probably test this again. And I feel like the cottage industry of feet people stealing samples to do bioequivalents is pretty hilarious. There'll be doctors that write fake prescriptions, and they're literally paying cash for bottles and bottles of medicine and then selling them in a like literally the back alley of a Starbucks. And they have a duffel bag of uh don't ask me how I know this, but there's there's a reason I know this. They'll have a duffel bag of like 12 of your rare disease drug bottles, and they'll say, is this enough to do a bioequivalent study? And it's a doctor that's risking his license, obviously, and he's writing prescriptions to himself or for fake patients. He's picking them up, he's paying for them out of pocket, and he's like, Look, I paid $300,000 for these 50 bottles of rare disease drug medicine. I'm gonna sell to you for a million, and you'll be the only generic company that'll be able to do this. And that's the alternative, which is obviously isn't great. It's kind of one of these things where there's a lot of shades of kind of like to your point, like gamesmanship and stuff like that. This is pretty high up on the gamesmanship level, but I think that there is a point here which is sort of constitutional, which is do I have to sell you my product as Company knowing that you're going to use it to destroy me. That seems like something that you should be able to, if you decide not to, be able to stand fast by that. At the same time, when Apple sells an iPhone, the first thing Samsung does, they buy a bunch of them, take them apart, and look at them with x-rays and microscopes. So I feel like there was even a time when cell genes competition would look in the obituary section for people who died of myeloma and they'd call them and say, if you have Revlimid still in the very sorry, your your husband died or whatever the case is. If you have any RevLamid left over, we will pay for it. And check if there's any RevLamid on, you know, and they'd pay tons of money for this. So there are a lot of ways to get the pills. You have to be very creative. Uh, we once thought about going to a dog charity because there was a drug that the company was giving away to dogs who had the human disease. And it was the same pill uh that they were giving. So we had to figure out how to get dogs with this disease, then it's not great, needless to say. Because you want to treat the dogs too, right? But in any event, it's kind of a messed up little little space. But again, I also feel on the other side, as we said, if the law is that you don't have to sell your medicine to enable your competitor to destroy you, what if you're in the, you know, we were in the midst of doing uh clinical trials for ketamine for acute suicidality? Now, thankfully, there was a startup called Johnson ⁇ Johnson that was also doing this. So the world got ketamine through them. But there was a risk that we actually would not know if intranasal ketamine was a tremendous antidepressant or not. It sort of turned out that it was better than a surprise, but not the miracle that the early Yale experiments were suggesting it was. We thought it was going to be this miracle antidepressant, the best antidepressant of all time. And it was sort of so-so. And um, we would have not had the funds for those clinical trials if a generic just came and creamed us. And so I do think, you know, you need a healthy industry and forcing companies to sort of hurt themselves is something that it just doesn't make sense to me, especially because the companies that are using that kind of protection need it. If you are making billions and billions of dollars with Rev Limit or something like that, people will find a way to get samples and they'll make generic. But if you're a tiny company with like 50 million in revenue and you need that revenue really bad and you're gonna go out of business without it, I don't know if that's the worst thing in the world. So it's a very weird, and again, the amount of people that know about this kind of thing and care about this kind of thing is pretty small. So it's a really fun question because it's uh now there is a law that passed. Congress actually passed a law, but it's really unclear if it's constitutional, in my opinion. I mean, it it's you know, it's it's pretty absurd law that you have to force a company. They're doing it through the FDA, interestingly. I think the the idea is like maybe the FDA, you go to the FDA, you say you want samples, and the FDA kind of tries to broke a guy in the back.

SPEAKER_02 46:28

I think uh you must win the prize for having the most impact at a young age on legislation uh related to the pharmaceutical industry in terms of like anyway, but so this it's a nice segue into something that is really important that uh initiated this whole conversation is uh this company called chemocentrics that uh was in the rare disease space, a terrible disease called Cyanca vasculitis, and the conventional standard of care, steroids plus immunosuppressives, okay, but not great, especially anyone in the transplant world knows that transplant really only became successful, solid organ transplant really only became successful when you had massive steroid sparing regimens, because even a little bit of steroids for a long period of time just horrendous, just like crushes the body. So, yeah, so it's obviously important to try to create something. So you had this company called Schemocentrics that had one basically one drug and uh was going for an approval, and the drug was approved in uh 2021. It was approved, the trial came out in 2019, I believe. And uh, it turns out because of a securities fraud litigation, uh, that this law firm was able to get internal documents, and those internal documents and emails produced by the gentleman named Dr. Walton details very clearly that a company manipulated unblinded after locking the database and getting a negative result, getting a p-values and statistically not significant, and then they unblinded, readjudicated folks and locked the database again, didn't tell the FDA that all that happened. They just said presented it as, hey, we did this analysis, it's superior. There were still a lot of questions about it. The advisory committee, the atcom on it was split kind of evenly in terms of whether or not to approve or not, despite even with this. Of course, this is assuming this statistically significant stuff, but and this all came out, it all came out, I think, in the last uh in 2025. But the thing that really precipitated things, because of course it's just the plaintiff's expert that produces some expert testimony. So you never know what to make about that, right? It's always like, well, who knows, maybe there's another side, maybe we're only seeing select emails, even though the emails are pretty damning. It's like we need superiority. Anyway, um, they're pretty damning in terms of what that expert report sent. But then Tracy Beth Hogue, as part of the the prior, or the FDA, as part of the FDA, she was head of CEDER, actually sent a letter, NOH letter, notice of opportunity of hearing letter as part of the withdrawal process to say, hey, we're concerned about this drug. She sent a letter to Amgen saying, hey, we need information about what we're hearing from this expert, what we've gotten from this expert report. And Amgen essentially said, yes, everything that the expert report said did happen. Their stance is to say that, hey, look, our goal is truth, and we think that that re-education, re-adjudication of those uh folks that did happen was actually should have happened, and they want some other independent panel to do it. So, but the big point of that is that in April 2025, when Tracy Hogue publishes her letter, we now know for sure that this is what happened, that the company did unlock, did readjudicate, then locked again, and that's how they came, they got superiority. Last week, Tuesday, is when the New England Journal of Medicine retracted the article. Sorry, the you know, the foundational trial that led to approval. So, Martin, your thoughts. Martin, your audio, can you are you hold on. Your audio is out.

SPEAKER_01 49:46

Sorry about that. That's my fault.

SPEAKER_00 49:47

There we go. Yeah, yeah, no, no. Start over. Start over. I was hoping it wasn't just me.

SPEAKER_01 49:51

I was gonna say we spent about an hour talking about, you know, some of the craziest things that have ever happened in medicine. This is one of the craziest things, if not the craziest thing, in my opinion, that that's ever happened in medicine. It's not just about anchobastrolitis. This is about the entire structure of drugs. Everything we know about medicine is is being challenged right now because if a company can say, chemical child didn't work, now it does, now it works. It's good to go. I mean, this is fraud on a scale that would make Bernie Madoff blush. Like this is the worst thing ever. Like these people have to go to jail. I've been to jail. It is not good. I don't recommend anybody go to jail. I don't like it when people say that, oh, this person should get 20 years flippantly or something like that. Jail is often the wrong answer. Not in this case. This is something where I think the FDA, the DOJ really has to throw the book at these people because if you're willing to break this promise that the trial data in the label, the trial data in the New England Journal is legitimate, then and you start to question every drug you prescribe. Now you give Ritoxin. What if that data was fake? You give her septic. What if that data was fake? Every new drug, you have to now wonder if somebody did the same thing. And the FDA doesn't know. It was caught by this pesky sort of, somewhat probably to malpractice, this very pesky kind of gnat that is surrounds the the public company industry, which is the plaintiff's bar. So these guys will sue for a class action lawsuit for every single company on the face of the earth gets these lawsuits. They used to be uncommon. They're so annoying because they'll they'll sort of just be like, well, your stock fell 20%. That's because you lied about something. And you're like, man, this is ridiculous. And so these guys, they do this lawsuit and they find the guy, the expert witness they brought, was actually a top FDA guy at Cedar, I think. And this guy puts this thing together and he's sort of, it's sort of in the middle of the 168-page expert report that, like, oh yeah, by the way, data's fake. They spent a lot of time talking about I's law and some of the liver toxicity that they also covered up. But like, this is burying the lead. I mean, this is the craziest thing ever. This is way worse than somebody saying, well, my hedge fund was up 50%, but actually it's down 50%. And I'm sort of embarrassed and I want to tell you that, but that's what happened. That's fraud too. But this is fraud that really shakes me to my core because the amount of unethical you have to be to sort of say that I care more about this drug gets approved than that this drug gets approved for the right reasons. I don't care about the totality of medicine. I don't know why I became a doctor or scientist in the case of this is the chief medical officer who's a sworn duty to do no harm, is that's out the window. That's the Hippocratic Oath is long gone. The willingness to get this isn't a drug this person invented. I've got my name on a number of patents. If anybody were ever to do something like this, it could be somebody who's the mother of the drug and said, I really want my baby to make it FDA approval. I can understand that it's still colossally and insanely wrong, but this is a person who's just a rank and files executive. I mean, why in the world would you subject yourself to this crazy amount of liability?

SPEAKER_00 52:45

And then also You uh went mute again there, Martin. Sorry. I think you should be got me. You should be getting me. That's better.

SPEAKER_01 52:51

You know, the amount of the the amount of this thing is just insane. Like there's just no other way to put it. I mean, it's a big problem. And deterrence, as much as I often I believe that deterrence often doesn't help in a lot of criminal settings, in this case, deterrence should sort of help and a really stiff sentence should be imposed. I haven't even been arrested yet, but this is the kind of thing where I just felt like I had to talk about this because this is the first time this has ever happened, knowingly, that we know of. Uh the closest one I can remember is Sequinome. Sequinome was a fetal blood, it was Steve Quake's technology, it was nucleic acid testing for fetal DNA and maternal blood. And you could tell trisomy 21 through this technology was pretty impressive, but they faked the data and they ended up doing the study again, and it is actually a really great test. And it's still commercialized and used today, but it was one, it was a diagnostic, so that's sort of different, in my opinion. Even Theranos, one, I'm not sure we know the whole story of Theranos for what it's worth. That's a chapter that'll be written some other day. But even with Theranos, if you're a doctor and you order, you want clinical chemistry for a patient, but you know they're getting it through a finger stick of a brand new test. You're you're gonna be a little bit, have a little clinical suspicion if you're a decent doctor, that, okay, if this thing comes out 10 times and upper level normal, then maybe it's this test that they got out with Walgreens that I've never heard of. Uh, it's not lab corp. It's probably this test. You're smart enough that really nobody got hurt with Theridose at the end of the day. There was nobody that you could point to that got sick or got hurt because it was a new test. It was experimental, et cetera. This is like a million times worse than Therados. It just violates every tenet of medicine that this whole industry believes in. And it's a big problem for Eli Lilly, it's a big problem for Merck, it's a big problem for Pfizer. It has nothing to do with this because now everyone's going to sit there and say, well, how do we know that those guys didn't fake their data? How do we know that that this drug didn't work or that drug didn't work? And it makes the peptide bros kind of start to seem reasonable where they're like, well, our stuff doesn't work, but neither does yours. And that's the kind of thing that because every time we talk to peptide guys, I'm like, where's the clinical trial? So they're like, I don't need one. I got N of one. I know it works for me. And now I'm sort of saying, like my pushback, of course, is do a double-blind trial, you get a control group, that's science. And now they can say, Hey Martin, I don't want your double blind trial. The guy's just faking the data, writing it in. I actually had a clinical trial I once did with that Droxytopa, the neurogenic uh ortho static hypotension drug. And we caught a clinical trial site doing fake data, and we had to really screw us up. So we caught it and we saw because of like, I forgot what it was, it was like the doctor was rounding every there's a couple of signs of it, but it was like one of these number things where the doctor was rounding the blood pressure to it to without any decimal points, and it was clustering around the same value each time, and it seemed like it was just written in. And if you go to like a Ukrainian site or some Eastern European site, like a country that I'm from, doctors will just pretend they found the patients and just do the clinical trial like that. And that's why you don't want too many of those trial sites. And there have been other weird situations, like I remember the approval for Brolinta for MastraZeneca, Tacagrilore, Blood Thinner. The trial, all the alpha or all the effect size of the trial came from ex-US patients. So the US trial, if the patient, if the trial was just done in the US, it would have failed. And so it had no difference from placebo in the US, but everything outside of the US had this really great success. Now, that was one trial that I think it found to sort of be this insane fluke. Other trials didn't replicate that. But the point is, we really take these things for granted that they're real. All the academic stuff, the preclinical stuff with the mouse stuff, you generally look at that with a grain of salt and you sort of say, eh, this thing's probably BS. There was a famous trial of a trial called Dimobon, which was a Russian antihistamine, and it was the best trial you've ever seen. I think it was published in Lancet or Lancet Neurology. I think it was the Lancet. And it's the best clinical trial ever for Alzheimer's disease, ever. And it's still never been retracted. It was the best trial you've ever seen. Eight Russian sites and one like Mass General kind of uh study uh observer. Well, this effect size was so good, it was so hard to believe. But a company licensed it, developed in the US, drug has no effect whatsoever. And you had to look, look and say that must have been fake data. But this is the first time to my knowledge that somebody has actually taken a failed clinical trial and said, no, no, no, no, I'm gonna lie, I'm gonna change these patients one by one and fix them. And again, this re-adjudication thing, man, only Amgen would do this. Like, just give it, just throw up, just just at the very least, say, look, I'm gonna do a confirmatory trial. I'm a good corporate citizen. Amgen, that money's gone. That money's never coming back. There's no need to keep this drug on the market. Just tell the FDA, I'm gonna do a new clinical trial, I'm gonna do the right thing, I'm gonna do a 500-patient trial bigger than before. We're gonna really figure out if this drug works and let that decide whether the drug stays on the market or not. Or even, you know what, in the meantime, I'm gonna discontinue until that trial shows the results. You don't sit there as a $200 billion company saying, no, no, no, no, this is you can't you can't take this drug off the market. Like, this is kind of what ticked me off about the whole Dereperm thing is that people sort of call me greedy. That's freaking greedy. That's an insane thing. I had a small company of 100 people trying to make ends meet, do all kinds of clinical trials, and Amjin could throw this drug away and it'll never matter to them. And of course, they care about the people with vasculitis. This isn't some world beater for vasculitis. You give retoxin for vasculitis and you're fine. Like, this isn't really a drug that is saving anybody's life or really even benefiting anybody's life, more most likely. And so just do a new trial if you really want to keep this thing on the market. It's kind of your responsibility at this point, now that you've bought the company, that you actually just repeat the trial just for like, just on a good Samaritan sort of like good science basis, just see what it would have done again. Obviously, the second you blake the blind and kind of reintroduce data into the database, you've poisoned the whole well. I mean, there's there's I think it might make sense at some point that the FDA monitors this stuff. And I think that's sort of a crazy thing to say, but the statistical analysis plan that you have to submit into the protocol these trials, you have to pre-specify what the SAP is. And the SAP is kind of done by your third-party vendor. And the vendor, there's a bunch of problems here, not just the company's fault, by the way. The DSMB. The guy went to the DSMB and said, I need to re-adjudicate these six cases. Oh, by the way, I really think that these are the six cases or five cases that are gonna that are really, really matter. And he picked five cases that he knew, if re-adjudicated, would get him across the finish line. And I guess the DSMB guy was hemming and hawing and he eventually did it. And there was one of the guys on the DSMB I know who's an eminently great physician and DSMB member across lots of important trials. It was another guy that just sort of said, okay, whatever, let's readjudicate the studies. I mean, who does it?

SPEAKER_00 59:14

Data safety monitoring board, right? For those that don't know.

SPEAKER_01 59:17

Yeah. DSMB and statistical analysis plan, when you clean the data and you say, This is it, we're gonna flip the card over. It's either gonna be an ace or a two. I wonder if there should be an adult in the room somewhere or like something, because this is too important to screw up. Like, I wonder if the FDA should be able to see an audit log or an audit trail or there should be some standardization here.

SPEAKER_00 59:39

I think you bring up some good points, and I think it's worth kind of educating our audience briefly about what actually goes into doing these trials and how much, like you mentioned, uh, the really the data interface is some doctor or technician who's paid by the institution going to the patient, taking a clipboard, writing down stuff, and sending it in. I mean, I I've been involved in some NIH studies and some FDA studies in my institution. The amount of busy work and bureaucratic things I have to go through, watching modules, co-signing this and that. I mean, it is hours upon hours of bureaucratic administrative work to participate in one of these trials. And the end result is again, somebody taking a clipboard, writing down data, putting it in an envelope, I attest it, and I, and it goes in. There's no, you know, we think with all these high-tech gadgets and electronic health records and all this, that there's some sort of data fidelity. There's really not. So I think it's worth that. You bring up the point of do we need more FDA oversight? I mean, yes, but also like there's so much administrative stuff that goes into this. And so I really worry that the end result of this is going to be just another layer that increases the cost of drug development. I mean, we need that, but I mean, at some point you have to scale back some of these administrative burdens.

SPEAKER_01 1:00:50

Yeah, totally. I mean, I'm a libertarian. I'm kind of it's so funny when I talk to my friends who are like ultra-republican or ultra-libertarian guys, and they're like, Martin, burn it all down, this and that. I said, no, no, the FDA is actually great. The FDA is the one party government that I've dealt with very successfully over the course of my life, and they're always on the side of doing the right thing. It's remarkable. The politicization of the FDA lately is really worrisome and scary. The average FDA uh experience I've had is there are people who are like us, they're medicine nerds, they love medicine, they love new medicine. They're not there for the money. They're there because they get the front seat to see every cool new drug that comes out, which as a little kid would have been amazing for me, is still would be an amazing job for me. Um, because you get to decide, okay, this medicine makes sense and people should have it or they should. And now libertarians say, well, screw that. You know, everybody should have whatever they want. And of course, there's a reason. We tried that already. The snake oil sort of comes out, and this is sort of now snake oil. And so it's the first time we're sort of seeing this up close and personal that we haven't had a madoff. We haven't had an FTX in medicine. And now we do. And it's kind of this really scary. I shouldn't even say FTX, because again, FTX had a bunch of wrinkles and things like that. But like carte blanche fraught uh in medicine, this is it. And you we want this to be the last time this happens, ideally. So how do you solve that? And again, it's happened so infrequently, so far as we know, that perhaps we do nothing. But and again, I'm loath to recommend any kind of regulatory anything. But this thing about a stat plan isn't a button you press, right? It's just sort of a button you press, and that's that. And so for that to happen at FDA or with FDA watching or like something, some protocol like that, how many phase threes happen in any given year that are for FDA approval? It might be too cumbersome. You're right, you're not wrong about that. But I just feel like, man, we got to do something to make sure. And there's audit trails for financials, right? There's audit trails for things like that. But how did FDA miss this? I mean, that's not my job, right? Like that that's some regulatory regulator and a regulatory podcast to figure out. But like, they got to figure this out. Because like if this ever happens again, medicine's over. There's no point in writing a prescription if you can't look at the drug and say, this is gonna be good for my patient. If you look at it and you say, I don't know what farm asshole screwed with this and said, actually, uh I need the revenue to go up, so I'm gonna figure this out. To me, again, I still can't understand the mental like every crime. Unfortunately, I've had to learn this, has some like mensuria, there's some scientist, there's some evil state of mind that occurs where the person says, Okay, now I'm gonna cross into the dark side. What happened to this person, this this doctor, chief medical officer, that said, you know, I feel like committing a crime today. It's such a crazy thing to do. And well, maybe we'll learn someday. But to me, it's just why ever be a scientist if you're not gonna run the experiment the way win, lose, or fail. You could always do another trial. You can always refine your hypothesis. Maybe it's not that steroid sparing, but this is the better part of it. It's just to me, this is such a shot at the like pillars of medicine that needs to get addressed so fast. And the right thing for Amgen to do is just drop the drug and say we need to do more clinical trials. The clinical trial we got approval on is faulty. Let's not defend that. Let's not try to normalize that. Let's completely go in the other direction and say this is not normal. The New England Journal did the right thing, obviously. I've seen some doctors on Twitter say, Well, my patients are on this drug. I don't know if it, dude, there should be no doubt that that this is something where if this is going to happen each time with each new medicine, you know, we really are gonna be in a load of trouble. And the incentives for like these trials, there's a company called Serepta that has all these DMD drugs that have been approved and their P-values to their P-values are more than 0.05. I mean, they're very kind of, it's not clear that these drugs work at all. And at the end of the day, they're very expensive and they're for DMD patients. What's amazing is that nevertheless those drugs have gotten approved, nevertheless they get paid for. So there is room for like 0.05 isn't the most holy like thing in the world. Like if you have a really sick person, you could sort of make exceptions. Now, ancovasculitis is not that. Anca's not great, but it's also not DMD. And I think that it's just not something where we should be splitting hairs about something like this uh the super steroid or like a complement inhibitor. We have a lot of ways to knock out the immune system. There's sort of not that this isn't the medical emergency that DMD is. And and that was those are really unique situations that still bother people. And so the p-value here would have been like 0.2 or 0.5 or something like that. And so to get it right just below 0.05, I mean, it's such chicanery that this happens in phase two, but to see it happen in phase three and to see it be an approval study, every time I short stocks, I've made a lot of enemies over the years shorting stocks of biotech companies. And every now and then, you know, I'll sort of ponder if, okay, what if the company's lying? And they they say that it was successful and it wasn't. And I actually think this has happened to me recently. And I could be wrong, and the drug's great, but it's going to an advisory committee in the next few weeks. So we'll find out. This is Capricor's a drug for DMD, incidentally. Sometimes warn companies, I said, listen, if this drug doesn't work, you need to come clean. And I'll sort of get on the phone with the company and be like, win, lose, or draw, you just got to come clean and tell the world what really happened. Don't try to spin it. Don't just tell us what the primary endpoint was. Because the stat plan is very precise. You press a button and the number comes, the p-value comes out. There's really not much more to it. And once you start spinning it and messing with it, Wall Street investors understand that this stuff is nonsense once you start doing that. But if you don't tell anybody, you know, you're really no different from a Or no different from Madoff. And again, given the stakes of just the whole of medicine rests on this trust that you're way worse than any of those guys.

SPEAKER_02 1:06:08

Martin, so Vinet Prasad went to Washington, D.C. saying many of these things, right? He's been saying for a long time, not perhaps outright fraud. This is a separate category, of course, but he's been saying for a long time that there's been a ton of gaming of the system in order to get to significance. So Sarepta, and you know, he gets up there and Sarepta Elvidis has this, uh has these hepatotoxicities. The Peter Marx decision, which I think is inexplicable in some senses, in terms of like, okay, you've got not great data in the boys that were in the trial, but okay, fine, you approved it because DMD's terrible. I get it. But then you approve it for non-ambulatory boys, you approve it for kids outside of that setting. And then the whole reason why you people argue from the other side that you don't want to do this is uh the the toxicities, right? And so here you had multiple boys that were dying of liver disease, of paradoxicity. So a couple of things. One is that you have this rare disease approval genre that seems to be happening, and there is seems to be one, a gaming of surrogates, there's this empathy play on there's no other mechanism, there's nothing else for these patients, but you could very well be giving these patients a drug that is not working well that actually may kill you, that you may not be able to have the last five, six years of life. And the other aspect, of course, is that uh every one of these drugs seemingly is approved with a conditional run-a post-marketing safety study. And that seems to be like not happening, right? I mean, this drug, the Avacapan 2021, it's approved. Yes, hepatotoxicity is noted, it's bad. By the way, that was also suppressed, as is clear in the expert report. And five years later, there's 30 out of like 300 patients. I may be getting the number slightly wrong, but but there's basically no one enrolled in the safety trial that they were supposed to do, right? So it's like it's just a game. So you can see why so many folks have kind of lost faith in the FDA. And of course, Prasad is fired the first time because of the Sarepta showdown, and he's fired the second time because of Moderna, other other things. Anyway, so are we like what like yeah, it seems to be the FDA, as it has been working for the last, I don't know how long, 10 years or something like that, is not functioning really well in kind of giving people a level of trust, even giving doctors like me a level of trust that, especially when you have these rare diseases, seems again, it's I think it's very this is a unique circumstance that I feel like there's an arbitrage that's being undertaken by a lot of folks to get these things across the finish line. Yeah, so uh was Vinamp Prasad correct, Martin.

SPEAKER_01 1:08:37

I don't think so. So first the company of the first company I started, Rotrophin, that you mentioned, it was called Rotrophin because we wanted to do recombinant dystrophin for muscular dystrophy. So that was an idea that we shot down pretty quickly in the start of the company, but I know a lot about DMD. We were very close with Sarapta when it was called AVI Biopharma, and we we were actually shareholders of it, and we thought about merging our two companies, believe it or not. Sarapta, I mean, it's sort of one of these things where it's the question makes you just look in the mirror and what world do you want? And I think people are very right on both sides. Some people say, I want a world where our medicines work. That's very reasonable and they're safe and effective. But then you look in the mirror and you could say, well, do I want a world where I want medicines that might work and I want to be able to try them? And people will say, well, that's what clinical trials are for. And then other people say, Well, I don't have that luxury. I have a dying kid. And when you talk to kids and parents and families with DMV, do we want to give these people placebos in the hope that it does something good for them and for the industry? There's uh an example I like to give is the development of MS drugs. So when Interferon, beta Interferon was developed for MS, it was not very effective. It was actually pretty, pretty dull. But one of the things that it did was create $3 billion of revenue for biogen. And companies like Pfizer and Navarda said, you can make $3 billion in MS. Well, let's roll up our sleeves and let's make some MS drugs. And now MS just has has a hundred great drugs, a hundred ten great drugs. And uh that's a good thing. So Sarepta's making a billion dollars or more on these drugs that arguably don't work. Patients are happy that they can do something. I remember when I was trying to make a drug for autism, there's no therapeutic available for social deficiencies of autism. And half of all patients with autism get prescribed an SSRI. Why? Very clear evidence. SSRIs do not improve autism whatsoever. They get prescribed these drugs because they're safe. And the parents say, Doc, do something. And if you don't do something, I'm going to the doc that will. And store them placebo, so screw it. Just just write the prescription. We know they're safe and children relatively safe. So let's do that. And I think that there's that pressure that this is really like there is no right or wrong here. I can't sit in the shoes of a family uh with a child that is gonna die. And could this drug work? Look, the drug analyst in me says it's a drug doesn't work. What are you gonna do? But you also have to look at it through other lenses and make sure that we're not being too strict. In rare diseases, you don't always have the luxury of doing 10 clinical trials. Now, the funny thing about DMD is it's the biggest rare disease out now that cystic fibrosis is kind of sort of treated. And again, it's the biggest lethal genetic rare disease. So there are a lot of different angles here, but you could theoretically do a lot of clinical trials in DMD. You could theoretically do a big clinical trial in DMD. There's tons of patients. That's sort of one disease where I'm not sure that excuse pans out. And that again, I hate to say Vinay is right because I want to be on the patient side and the doctor side, but no drug company should ever say I couldn't find enough DMD patients for my clinical trial. There's 20,000 people in the world with DMD that are dying and really need a drug. You can get three or four hundred of them. When we did the PCAN thing, I never thought we'd find two or three hundred people for that clinical trial. They found them. Uh, I think it was closer to high hundred or low two hundreds, but it was an incredible effort to find those people. We didn't even think they existed. We know there's plenty of DMD patients. So I think that you have to be flexible, maybe for stuff that looks more like PCAN than DMD. So I think unfortunately, maybe Vene is right here. I still don't want to take potential drugs away from people and and patients. And so it's a really tough thing where is it the doctor and the patient and the family deciding what's right, or is it some bureaucrat saying, I don't know, it's not good enough for me. I think that's it's easy when it's an antibiotic. It's easy when it's with a diabetes drug. It's not so easy when the patient's dying and is desperate. I remember uh for the PCAN drug I was developing, I had a month, I'm sorry, I had a week of animal talks. I said to FDA, this is good enough. I said, no, Martin, it's not. And we decided what's good enough, not you. And I said, if I listen, I'm standing pad on a week. And they said, you need a month of animal talks before a human gets this drug. And I said, why? And they said, we said so. That's why. I said, it's a vitamin derivative, no toxicity whatsoever in two animal species. And they said, just do the month, Martin. And I said, I'll go to Europe. Screw you. And eventually we we capitulated. We did the month. And it was this this really crazy thing because you've kids dying of this terrible disease. PCAN is worse than DMD, is they're terrible, both terrible. Uh, but Pen is even more fatal. And you have some bureaucrat telling me, I need a I need a month of mouse data instead of a week of mouse data. Like it's gonna freaking matter. At the same time, I also respect that somebody should make the rules, somebody's gotta decide. You know, we can't necessarily all decide for ourselves because human nature is gonna lead to more snake oil. And you're gonna have people saying, Well, I don't need any tox data at all. What's the point? The patients should have the right to try. And the patient says, That's right, I should have the right to try, and they drop dead the second they take the dose. And I think that's, you know, there does need to be something that stops that. And again, my libertarian friends will kill me for saying any of this because they're they're just like, how could you be in favor of the government sort of doing something? And it's like, well, remember, this is one thing I heard in my criminal trial. That was that was really a great, great saying for my lawyer. He said, remember, the government is you. You are the government. We are the government, right? It's not some guy. It's that guy has kids, that guy has has has a family, that guy has loved ones that that that he wants to give them good medicine too. Now, not every bureaucrat is like perfect, but at the same time, I mean, this is sort of the the argument for, sorry, I'm getting uh trying to get the zoom right. Uh this is the argument for for pharma execs as well. You know, whenever you hear the boneheaded kind of conjecture that Pfizer and Lily have all these great cancer cures, but they're not releasing them because it would hurt their profits. I mean, it's boneheaded for a hundred reasons. But one of the biggest reasons it's boneheaded is what do you think the families of Pfizer and Lily don't want to have treatments for their family? Of course they do. So, you know, the FDA, I think by and large, when you talk to them and you look at the people, they're just people like us and they love drugs and they love medicine. And in general, whether they swing a little bit liberal or a little bit conservative, depending on the moods and the people there and each specific drug and maybe some lobbying pressure that that I think has started to creep into the system a bit. Adenhelm was a really big sign of that. I know way too much inside baseball on some of these. Some of the people that were fryable at FDA, I think are now gone. But there's always somebody coming in that, you know, will listen to a drug company, will listen to a lobbyist, will listen to whoever it is, and won't stand up to the pressure. I mean, if you go to the president of the United States and you say, Mr. Trump, I'm your biggest donor, can you make sure this drug gets approved? And President Trump says, I'm gonna make some phone calls, we'll see what this is all about. And before you know it, a bunch of people are getting fired, a bunch of people are getting resigning. And whether you do it like Trump does, which is like just blatant and that's sort of out in the open, or you do it more like an Obama or Clinton, or you try to try to do it more slick, either way, it's gonna happen. And, you know, I think that that kind of thing is just sort of it's terrible. But thankfully, if you look at international drug approvals, there's a lot of harmony in this stuff. There's very rarely do you get a drug that's approved here but not approved there. And, you know, specifically in Europe, it's mostly sort of sympatico. Occasionally you have these closer calls where there's and it's mostly in rare diseases, right? Where it's like, it's it's just you just hate to tell somebody you can't have a drug when there's it's rationally designed. It's, you know, it seems to have some glimmer of efficacy. It's it's such a terrible disease. Why say no? So, you know, I put it back to you guys. I mean, what do you do as clinicians? I mean, I'm sure there are surgeries that you do where you don't know if you're gonna have a big win. You know, it's just too hard to tell. And you got to do something at the end of the day. And, you know, medicine's no different. I mean, prescription medicine is no different, obviously.

SPEAKER_00 1:16:04

Yeah, I mean, I'm a neurosurgeon, so there's like exactly zero randomized clinical trials for neurosurgical techniques, especially neurotrauma, which is my subspecialist. You're never gonna randomize acute subdural hematomas into surgery versus no surgery or for different techniques. It's just not gonna happen.

SPEAKER_01 1:16:20

Wasn't there some trial? Um thinking back into my encyclopedia, there was some trial at one point of stroke, whether you use like embolize it or like they're not really well randomized, but like there are a couple of trials, I'm sure.

SPEAKER_00 1:16:33

Yeah, there there are for things like thrombectomy. There's really good data, and there's been a bunch of trials with thrombectomy where they have shown good outcomes for clot retrieval and stroke. But you're right, it it's really hard to do these, and especially in acute conditions, right? Somebody's coming in, uh, you know, they've got uh an acute stroke, and you're telling them, hey, we're gonna enter you in this trial. Oftentimes they can't consent for themselves. So there's a lot of difficulty when especially when it comes to acute surgical treatments to get people enrolled.

SPEAKER_02 1:17:00

The management of acute stroke and in terms of how that's progressed has been super interesting, in part because you see that it's a population that's pretty desperate because if you if you lose brain, ultimately that's terrible. And and it turns out that some of the early interventions actually made things made things worse. For instance, heparinizing, lots of ischemic strokes, like all of all those photos. It sounded good. You had a clock, let's give them tons of heparin, but then you had a very high rate of hemorrhagic conversion because you know the brain was friable and injured and you'd have a bunch of bleeding into there. And so that kind of retarded progress. But but slowly and surely, um, you know, you had uh you had this kind of progression towards what we have today, which is really amazing on the part of these stroke neurosurgery colleagues that somebody's having an acute stroke within the right window. You can emergently take them to the lab and have some highly skilled neurovascular uh or vascular trained surgeon kind of go up in their aspirate clot and take it out. And that was like, and that progression was really via multiple iterations of randomized controlled trials that initially were actually negative, and then ultimately, you know, the true believers kind of kept pushing, pushing, pushing. And now it's like it's really standard of standard of care. So it it really is. It should just highlights the difficulty of medicine for sure. And which is not dissimilar as as the point you're making to uh drugs and drug approvals.

SPEAKER_00 1:18:15

So it gets back to the point of everyone's an N of one. I mean, you've seen one clot, you've probably seen one clot, especially when you get to, you know, how are you gonna get a wire up through somebody's intracraniovasculature and everyone's has slightly different roadmap and different presentations, so it it can be challenging.

SPEAKER_01 1:18:31

Yeah, it's been a bit bit I hate to use this term, but it's been a sort of graveyard or or dry well for pharma. Uh stroke has just been no nobody even wants to do a trial in space. I mean, it's so bad. And TPA was kind of your last big effort, and it was 30, 40 years ago. And uh I remember a few companies have tried here and there, but it's just such a weird disease. And when I say it it's kind of too late to do something interventionally with a drug, you know, so you need to focus on like stroke prevention. So there's factor XA inhibitors and stuff like that, that we Veroxaban and whatever that do seem to lower uh stroke in the long run. But I'm excited about LPA potentially being like the final frontier of cardio. Uh, that's kind of interesting. But yeah, I really do worry about the state of medicine in the sense that if you're at Lilly or Eric or whatever, what are you working on? You know, there's only so much left in cancer. And at 2040 or 2050, we're really going to start to look at that as sort of I love to see it, knock on wood, a solved problem. And so now you're really left with psychiatry, which is sort of still in less morbid state for the last hundred years where we don't understand what's happening. But ironically, studying neural networks for the last five or so years, as well as my wife who works there professionally, I actually think we're learning a lot about the brain and from AI. Uh, when you take five percent of the weights of a neural network and you chop them off, the neural network doesn't lose any efficacy whatsoever. You take five percent of the brain out from somebody, it's probably the same thing. There's some level where Yeah, I mean, there's some level where you do you do lose.

SPEAKER_00 1:19:57

Depends which five percent, but yeah.

SPEAKER_01 1:19:59

Right, right, exactly. You know, but you know, the the amount of information, you know, neural network in general, no one cell really matters that much. It's it's kind of amazing. Uh, and so we're seeing more and more parallels in training and other sort of parts of AI sort of map pretty well to, as far as I understand, neurology and psychiatry. And so, where are we gonna go with once that final frontier is done with schizophrenia and depression? These a lot of these diseases don't have great treatments. We're not even sure they're diseases in some ways. And then sort of the the rest of essential tremors one disease that I think almost nobody really appreciates. That's sort of kind of an odd one. There's a lot of these little pockets of odd diseases that either millions of people have or hundreds of thousands of people have, and pharmaceuticals sort of just crawling around to them and saying, Oh, wow, I didn't realize this was such a big bad illness. Huntington's is is sort of one big rare disease that's still sort of open for anybody who can do something there. But you know, a lot of the other diseases, it's sort of time to sort of move on from, and there's just that much juice left in some of the don't don't give up on slow back pain, brain computer interface.

SPEAKER_02 1:20:59

Yeah, and don't give up on cardiovascular disease. Uh, cardiovascular, I mean, look, even when you drop your LDL down to the 40s, as the latest PCSK9 inhibitor trial did in Vesalius, you still have 13% of folks in the treatment arm having bad cardiovascular events, right? It's still the number one cause of death. And I think, I think, at least based on the LDL hitting LDL thing, hitting LDL hard, it's played out. I mean, uh, it doesn't, yes, you have that West African tribe with an LDL of 15 that has has no cardiovascular disease, but I don't think artificially lowering you to that level is going to eliminate cardiovascular disease. I'm very curious. There's a bunch of folks that are very curious. Well, obviously, cardiologists are all very curious about LP level A and what it does, but it feels to me at least, we'll see if I'm wrong, if uh that lipoproteins are kind of played out, and we need like a different paradigm to go after in terms of these sudden cardiac deaths that take out 40 to 50 year olds, right? But Martin, this has been a fantastic conversation. Thank you. Uh thank you so much. I I had a couple wrap one wrap-up uh question that hopefully is not too long, but what do you think about the media and its coverage of the FDA? Do you do you feel like there's a lot of honest coverage about it? And you have a particularly great vantage point because of how the media covered you, right? I mean, I'm pretty sure you don't feel like you got like you even now get an honest shake from New York Times, Wall Street Journal, Stat News, Endpoint News, whatnot. So what's your general grade of how the how uh the media does science journalism?

SPEAKER_01 1:22:20

Yeah, certainly the the the specialist guys do do, as much as I I have fights with a lot of them, they do a better job than than sort of the the non-specialists. I'm not sure they do a great job. One of the issues is they have to sell flicks, they gotta sell ads, they they gotta make stuff exciting. Some stuff about medicine's boring, and it's only wonky guys that like us that really kind of find certain things really exciting. And the problem is, again, you'll have a stat or or endpoints or whatever. They're equipped to sort of tell the truth, but they're also sort of sometimes incentivized to sort of make something a little more exciting or a little less exciting than it is. Stack did or an organization I've had a lot of fights with over the years, they did a relatively good job of calling the blow-by-blows of of the latest FDA conundrums. And I think the problem with media is journalists want to be part of the story. There's very few journalists that actually just want to chronicle the situation and drop their pen and leave. A lot of them are sort of like, well, maybe I could get a book out of this or whatever the case is. And I think this kind of very terrible thing where you know we have to now not just read the story, but now try to read the journalists are well, is this guy always kind of nasty at drug companies, or is this guy always telling the truth? And who's watching the watcher? The it's sort of a tough kind of uh place to be because if we take blind faith in the watcher and then we learn the watcher wasn't that honest, now you have this situation that we're in, which is it goes so far in the other direction where we're sort of saying, like I talk to people like we can't trust medicine, we can't trust the FDA, the FDA lied to us about everything. And I'm just sitting sitting here, like, well, what do you propose? And it's like just terrible ideas. Uh so I think that the FDA, nobody understands it really, unless you're in pharma. It's kind of this like institution that that's just not well understood. It's so mundane relative to kind of most of other government intrigue. There are a couple of drugs that there are some bad decisions, but by far and large, I mean, the drugs they approve work and the drugs they don't approve don't work, and that's about it. I think that our drug supply is safe, that amount of regulation may be a little intense, but that's the trade-off. So I feel like it's one of these things where, if anything, the media isn't doing a great job of normal, you know, sort of normalizing the FDA and making it understood that it's actually a really kind of good institution, in my opinion. Uh, does it get everything right? Of course not. Is it subject to graft and other issues? Sure, so is the Pentagon and the DOD and why do we have a zillion trillion dollar military budget and things like that? Uh, the FDA, you know, gets it wrong too. But by far and large, I mean, it's a group of people that I really admire. And I think media like CNN or other folks, they focus so much on the politics side of it. When if you actually are in FDA, politics have played very little role almost always. Right now we're in a unique situation where a lot of DC is blowing up, uh, for better or worse, uh, depending on your perspective. And that is starting to politicize drug decisions or other things like that. But, you know, still in in large part, I mean, the right drugs are getting approved and the wrong ones aren't. And then finally, clinicians know the difference. You know, clinicians aren't stupid. You know, there have been some drugs that have gotten approval that don't really work, and doctors tend to avoid them and sort of say, ah, you know, I'm not seeing what I need to see out of that thing. And there's a grapevine from doctor to doctor, even doctor to investor, and and all around that there's mistrust. And a really good example is the Bristol Myers uh drug Coben fee for schizophrenia, where the drug had a really good result, and then it had another trial that didn't work. And now everyone's sort of saying, hmm, sure, this is the schizophrenia miracle that we thought it was. And so you look at the revenue of the drug and it's kind of a pittance. Uh, and it's like, well, doctors are voting with their feet. So I do think thankfully we have some checks and balances like that. And, you know, there's so much more to talk about. I could talk to you guys for days, and there's so much fun. Yeah, yeah. Um, so thank you for having me. Yeah.

SPEAKER_02 1:25:52

So actually back on to reiterate your point, uh Tracy Beth, uh we had Tracy Beth who on the uh podcast a couple times, and she said the same thing. She was, of course, fired and not a great situation, but she said the FDA is full of amazing people. I'm I'm kind of frustrated with the FDA. I don't want to like blow it up and be like, just whatever, let the doctors decide on their own, you know, like let that be the check. But no, but Tracy said, like, there's a tremendous number of people at the FDA that are doing fantastic work. I mean, that letter that she wrote, that that notice of, I mean, that's clearly not a one-person job. That's like a team at the FDA that must be working to produce that timeline and send a letter out and all that stuff. So, and as you're saying, and she said the same thing. She said the vast majority of the time, FDA staff did a fantastic job, and I and I completely agreed with them. There's a minority of the time that I disagreed with them, and you know, that is what it is. So, anyhow, this is a fantastic conversation. It went 50 minutes longer than I thought it would because it was just so good. So, Martin, thank you so much for giving us your time. We'll have to have you back at some point to talk about the the latest FDA controversy, uh pharma controversy that's sure to uh sure to emerge. So, thanks again, Martin. Thank you, guys.

SPEAKER_00 1:27:00

Thank you. All right.