8- Deep-dive on FDA Comm’r Califf & HHS Secy. Becerra | Aledade raises $260M | Amazon HIPAA data collection | Lessons for AI in Healthcare

Marcus: [00:00:00] Alright, episode eight. Uh, we are remote. Vic is in the office, downtown Nashville, and I am in a room, in a lodge somewhere on Main Street, uh, in Aspen, Colorado.

It’s been an incredible event. You know, they are able to really draw out the leaders, uh, at least of. Health care in the United States. Um, and so we’ll talk through some of the sessions that I sat in on with, uh, the FDA commissioner as well as the HHS secretary. So, we’ll, we’ll go through that, but I think we’ve got some, some news that we’re going to cover 1st that you’ve been tracking while I’ve been in transit.

Um, so, uh, Yeah, why don’t you jump into the first story?

Vic: Yeah, so I’ll, uh, we’ve been [00:01:00] warning our company, portfolio companies and investors about how hard the fundraising environment is. I think that hasn’t changed. But it also, I think, is valuable to point out successes. And so, Holiday is a, um, it’s just an enablement platform in Maryland.

They really have a nationwide reach. And they raised 260 million. Um, I think it came out yesterday, and so that’s exciting and great, and as we have talked about, you know, before, I think on the show, primary care is, is really a great place for innovation. There’s a lot of progress. Both in how primary care groups, how many primary care physicians and the groups organize themselves and also sort of as the entry point for value based care.

And I think this is a success story there, um, alongside other success stories. So good to, [00:02:00] um, sort of just note that. I don’t think it makes the environment easier overall, but, but good to celebrate a, a success story. A successful raise. Um, I wanted to point out that the um, the employment of docs so for a long time most physicians were uh independent And that’s been trending Um to where they’re they’re being employed either by health systems You can see it’s you know, the last data we had was in 22 52 percent now are employed by health systems Um, and it’s been up 26 percent since 2012.

It’s a huge growth there And then that blue category is what we’re talking about with AllenAid. Um, that’s now almost a quarter of the docs are in a private equity backed, uh, company. Either in position enablement, Or in, uh, what we call advanced primary care. I think we should maybe talk about the differences there, but they’re both private [00:03:00] equity, um, managed groups.

Marcus: Yeah. And then, and then it looks like the independent decreases has been from 2019 to 2022, which obviously that’s the pandemic era. Um, so there, I’m sure there’s some influence there, but a 12 percent decrease. That’s a very sharp decrease. Um, in such a short time window, um, not including the, you know, what’s, what’s happened this year, cause this, this trend line ends in 2022.

So that’s pretty interesting.

Vic: Yeah. And I think as you can tell from the graph, hospitals are, are gaining share of docs, but really private equity is, is an entry that’s growing pretty dramatically and we don’t have it back to 2012, but I think it was very low approaching zero in 2010, 2012. And so they have taken a lot of share.

Marcus: Yeah, I mean, the fastest growing category here is P or other. Right. And, um, that makes a lot of sense in terms of primary care. Certainly being a key area. Um, you know, [00:04:00] whether it be, uh, advanced primary care or, or, or focused on sort of employer, employer focused networks. But to see that being the leading growth category is, it is pretty interesting.

And I, and I wonder sort of how to think about that in light of everything that happened with Envision, um, and, and HCA’s joint venture with them and HCA sort of, you know, strong position versus Envision’s not so strong position and, and ultimate bankruptcy. I think there’s, um, there’s probably more to this story that’s going to play out over time.

Um, and we’re going to have to keep an eye on this because I think the health systems are likely going to be. A much more stable, um, base for, for these positions. Whereas, you know, these different investor backed vehicles, um, may, may flame out.

Vic: Yeah. And I think that’s a good, um, segue to the difference between advanced primary care and enablement platforms.

They’re, they’re very related. They’re both private equity [00:05:00] strategies. Of course, some of the advanced primary cares have been, Acquired. One medical got bought by Amazon. Oak Street got bought by CVS. CVS slash Aetna. At first, they were private equity backed. The enablement platforms are very capital light, so they don’t take a lot of capital.

Uh, the way it works is they provide technology services and support. Uh, but then the docs stay on their own payroll. They keep all the, all the, um, capital costs and then they share, they kind of share the upside. And so I think that is a really, It’s a strong cashflow generating business model. If you can help the docs be much better at, at, um, you know, affordable care and value based care, it’s, it’s great.

The, uh, the advanced primary care is more capital intensive. And I think part of the reason [00:06:00] for the exits is you need a lot of capital to play that game over the longterm. I think, um, with private equity controlling or at least influencing more of the primary care segment, I think you do get to a point where you have, um, at least competing incentives.

Private equity is trying to make profits as their primary thing. And so there’s an opportunity to, um, run, run kind of strategies that maybe aren’t necessarily the best long term strategy. I don’t want to go through the whole InVision thing, but I think You could put debt on the company, you could pay a dividend.

There’s lots of strategies that private equity, you know, when they don’t work well, have been criticized for. And I think there’s going to be a reckoning where we have to try to balance the creativity and the empowerment that private equity, uh, bringing new software tools and new [00:07:00] strategies can be really helpful, but also try to avoid some of the, some of the less, um,

Marcus: Yeah, I think that’s right. Um, there are so many factors. I mean, some of it. And one thing we haven’t talked at all about is really where do physicians want to be right. Um, you know, I’ll, I’ll come back to this in detail, but, um, a lot of the comments that, uh, commissioner Califf made, uh, when just talking about, you know, A lot of the changes we’ve had over the last 20 years as it pertains to physicians.

Um, he consistently used a term that ZDoggMD like actually introduced to me, which was moral injury, right? Um, as opposed to using the burnout term, um, you know, he consistently used the term moral injury. And, um, you know, I think in a lot of these advanced primary care platforms, they are generally pretty physician friendly.

Um, insofar as they focus on deep trauma. Patient relationships, um, and, uh, you know, sort of the [00:08:00] primary care physician being, you know, um, pretty much the quarterback for care, um, with a lot of data capture capabilities and a lot of care coordination capabilities. And so I think there’s probably more and more physicians that are opting in to that model, which doesn’t necessarily tell us how.

Sustainable that model is going to be, um, right? How profitable it’s going to be, but there’s going to be a higher level of affinity because it is a more physician friendly model in a world that hasn’t been very physician friendly for a while.

Vic: Yeah, yeah, I was trying to start up, you know, which is a very different, um, opposition yesterday and they’re selling a different tool to docs.

It’s really a technical tool, but really thin. Um, and what they’re seeing in their, like, customer discovery is. Docs want to just come into work, practice medicine, take care of their patients and not have to worry about all of the administrative back office, [00:09:00] data collection, billing stuff. Although they, they want the business to work.

They want to be paid appropriately. And so getting that balance, I think is, is the key.

Marcus: Um, and, uh, you know, you talked about ade. I think it’s also worth, um, calling out, uh, the CEO Farzad. Uh, Mo Shari, he’s, you know, a a, a rockstar used to run health it Yeah. Um, for HHS. Um, and, and so, and when you look at the list of the, the VCs that are there, it’s a, it’s a pretty

Vic: Yeah.

Big

Marcus: brand hit list.

Vic: Yeah. Lights, uh, know, I think I saw

Marcus: Lightspeed Omas. Who else was on the list? Ben Rock, you know, Ben Rock. Fidelity

Vic: is a

Marcus: Yeah, so when we talk about sort of the winter, you know, um, there are going to be those, those people who, they’re so well respected. They’re so connected, um, that they can continue to access capital even in a window like this, right?

Um, but that is not, you know, everyone is not. [00:10:00] This guy. So, you know, we need to kind of keep that in perspective. I think.

Vic: Yeah, I mean, I think they are at the, uh, three. I couldn’t get the exact data, but roughly 300 to 350 million in revenue, um, pretty good, actually positive. So it’s a different animal than a lot of, uh, portfolio companies that we interact with.

The other thing I’ll point out is that they, uh, they did a partnership with Elevance, you know, the former Anthem.

Marcus: Anthem.

Vic: And in that partnership, they, they assumed they got, they got all of the Elevance, um, docs onto their platform. That was last summer. And so I, I don’t have data on it, but I think that’s probably paying off really well because that’s a big yeah.

Marcus: Yeah. And look, just continued, uh, shift towards the payvider model, I think creates these innovation opportunities. I think this is the thing we’ve been talking about. Um, it is a good thing, I believe, ultimately, um, because not all the payviders are [00:11:00] going to have the kinds of, uh, you know, strength that a UHG has.

To do so many of these things internally, and so there’s going to be lots of opportunity for partnership, um, acquisition, not to say that she isn’t doing these things, but they’ve established the pay barter model for such a much longer time that optimist such a built out machine at this point, whereas, you know, your anthems, your ever north, et cetera, I think they are going to be very, very open in order to catch up.

Quite frankly, they’re gonna be very open to partnerships. Yeah.

Vic: That’s right. Um, and then I was going to just touch on, uh, Amazon. So Amazon, uh, has their own. Of course, they, they bought One Medical. So they have an advanced primary care practice where you, you go in and see a doc in the One Medical platform.

But last, last, um, November, they also launched One Medical. Um, an Amazon clinic, I’ll show you the website [00:12:00] there. So it’s a fully automated, um, you don’t, you don’t talk to anyone. You key in what your symptoms are. And then there’s a chat, uh, largely automated chat function, and I didn’t really give it much consideration.

It’s sort of another in the, in the Amazon suite of, of tools seem sort of complimentary with one medical. Um, But they, they, um, there’s a lot of, um, attention in DC around this because Washington post came out with an article that they, Amazon changed the HIPAA, uh, authorization form. So we all have, whenever we go to the doctor, you always sign that HIPAA form when you check in and honestly, I don’t read it very carefully.

It just gives my dog who

Marcus: does.

Vic: Yeah. And who does exactly. And the Washington Post does, is the answer. [00:13:00] They read it, and um, the quote that I thought, it’s a long article, uh, by the Senators Warren and Welsh, uh, took Amazon to task in a conference this, this week. Um, because what, what they have inserted into the authorization, Is a much broader authorization.

So when you sign up to this online form and you get your, um, medication or your, you get, maybe you have a sore throat or whatever, um, you also agree to give Amazon access to your complete patient record, which is a little bit vague what that means, but it sort of implies. All of your medical records, but then further you give them the right to redisclose that information for other purposes that are only known to amazon and so the washington post I [00:14:00] think correctly is calling this out as Um, you know a bridge too far that they it’s great that they have this patient convenience At least my opinion.

It’s great to have an alternative for folks But they shouldn’t have a broader HIPAA release than anyone else does. Right. So it seems like, huh, Senator Warren and Welch are on it. Amazon has not changed it as of yet, but I think they’re gonna have to.

Marcus: Yeah, this is um, I think the thing that I wonder about this is Is the, the resources that will be required to police all of these kinds of, um, new applications that are coming out.

Yeah. Um, it, it, it just seems like a, it just, it just seems like unless there is some true, some true line drawing around what’s legal and what’s not legal. This, [00:15:00] this gray area is, is going to be taken advantage of by a ton of companies, you know, some of them as large as Amazon, but a lot of them smaller, just venture backed companies that are trying to break into the space.

Right. I mean, I think. We’re just going to see a lot more of this, and I haven’t actually read the terms or the HIPAA disclosure, so I’m not going to opine deeply on it, but I think if we just think about the macro challenges around labor, around access, everyone keeps talking about these things, I think what Amazon is providing here is certainly, um, something to celebrate in terms of trying to expand access to people, you know, the, the, the safety of it.

And the privacy protection around it, you know, it’s just trade offs. It’s just more and more and more trade offs. And, you know, as long as we continue to not have good answers, as long as we continue to, uh, in aggregate, increase the cost of health [00:16:00] care in this country, as long as we continue to have lowering, uh, Life expectancy.

I think people are going to have less and less compassion for government deciding these things are inappropriate because all of the important metrics, whether it be financial or health related are all going in the wrong direction. So it’s like, what are we, what are we going to do? You know what I mean?

And I think these companies are very, very good

Vic: systems in DC that you, you met with today. So you can give us a report on it in a minute, but they haven’t had great results. And so. No, I think we do need consumer protection, but I, I also think it’s great that Amazon’s bringing new ideas to market. Um, so that we have to figure out a balance there, but I don’t know what it is.

I mean, I can certainly imagine my health data being really beneficial for Amazon selling me other stuff through one of their other channels and they have.

Marcus: Yeah, I mean, you know, I haven’t [00:17:00] read the article in the Washington Post and that’s a derivative of the actual document. Right? So I’m going to hold off on a strong opinion or judgment on it.

Right? But, um, I just think that even by the admission of the leaders in government, right? We are clearly not doing a good job, uh, in translating our massive lead and innovation in terms of, you know, medicine, surgical procedures, uh, you know, cell therapies, all these things we, as a country are leading in, it’s not translating into better outcomes, and it’s certainly not translated into lower cost of care.

Right? And, and, and there’s no, there’s no evaluation of cost effectiveness going on. So, um, I, I think it’s going to be hard over time to, To continue to try to hold off the, you know, the Amazons of the world from doing things like this.

Vic: So maybe, I mean, maybe it is the, the consumer has to educate themselves.

Marcus: Yeah. You’ll fat chance of that. I mean, you know, I’ve got, I’ve got, I’ve got more belief. We’re going to properly regulate this than the, than consumers are going to educate themselves. I mean, [00:18:00] you know, we spend how much time every week doing the show to try to educate ourselves. And I wouldn’t call ourselves very educated,

Vic: right?

I never read the HIPAA things. And now I need, now, apparently I need

Marcus: to. Right. That’s what, that’s my point. That’s my point. You know, we studied this every week and like, how well do you know all the HIPAA disclosures that you’ve signed over the last year?

Vic: Not at all.

Marcus: Right. So, all right.

Vic: All right.

Marcus: Well, it’s something to track though, right?

I mean, it’s something to track. I think from our perspective as venture investors, Uh, you know what happens to Amazon that they can maybe defend with lawyers and lobbyists, um, you know, certainly early stage companies cannot right. So this could end up bringing some at a minimum negative headwinds, um, from a political discourse perspective around these types of innovations, and it could be yet another category that, uh, you know, kind of catches pneumonia while Amazon maybe catches a slight cold.

Vic: Okay, well, that’s probably a good point [00:19:00] to go to our sponsor, and then we can come back and hear about Aspen.

Doug Edwards: Sounds

Marcus: good.

Doug Edwards: Thanks guys for the opportunity to talk about our pre seed fund, Jumpstart Foundry. My name is Doug Edwards, CEO of Jumpstart Health Investors, the parent company of Jumpstart Foundry.

We’re so excited to be able to talk about, uh, early stage venture investing, certainly the need for us to change the crazy world of healthcare in the United States. We are spending 20 percent of our GDP north of 4 trillion a year on healthcare with suboptimal outcomes. Jumpstart Foundry exists to help us find and identify and invest in innovative companies that are going to make a difference in healthcare in our country.

Every year, Jumpstart Foundry invests a fund, raises a fund, and deploys that across 30, 40, 50 assets every year, allowing ease of access for our limited partners. to invest, to help us make something better in health care. Some of the benefits of Jumpstart Foundry is there’s no [00:20:00] management fees. We deploy all the capital that’s raised every year in the fund.

We find the best and brightest typically around single digit percentage of companies that apply for funding from Jumpstart and we invest in the most incredible, robust. Innovative solutions and founders in the United States. Over the last nine years, Jumpstart Foundry has invested in nearly 200 early stage preceded stage companies in the country through those most innovative solutions that Jumpstart Foundry invest in.

We also provide great returns and a great experience for our limited partners. We partner with AngelList to administer the fund, making that ease of access, not only with low minimums, but the ease of investing in venture much better. We all know that healthcare is broken. Everyone deserves better. Come alongside us with Jumpstart Foundry, invest in making the future of healthcare better and make something better in healthcare.

Thank you guys. Now back to the show.

Marcus: All right, we’re back. Um, [00:21:00] so maybe, maybe I’ll just like start at the highest level and talk about this event that I’m at.

Vic: So I’m not sure everyone knows what it is.

Marcus: Yeah, so, you know, we’ve only done that 8 episodes and 8 episodes I’ve done from from Aspen, Colorado. So this is not the same thing that was here for last time.

Last time I was here doing an executive seminar and there was almost nobody on the on the Aspen is to can’t campus but this time. There’s a lot of people here. So around this time every year, they throw an event called the Aspen Ideas Festival. Um, and it’s a, it’s a very, very big high profile event. You know, lots of people from across different industries come, but what they’ve been doing, I think it’s less than 10 years is, uh, A pre conference, a pre festival to the actual Aspen ideas festival.

That’s entirely focused on health. So it’s called Aspen ideas health. Um, it started on Wednesday and it goes until Sunday and then Aspen ideas starts on it goes until Saturday and then Aspen ideas starts [00:22:00] on Sunday and then kind of goes for the next week. Um, so, uh, you know, Aspen Institute very, very, uh, yeah.

Uh, you know, well respected organization in D. C. and therefore they’re able to really bring out the heavy hitters from D. C. Um, and this year, in addition to, you know, uh, Chelsea Clinton and, uh, you know, a bunch of, uh, you know, top people in the nonprofit space, they, they actually had. Uh, not just actually, they, they had the agents secretary current, um, uh, Javier Becerra, but they also had previous ones as well.

So, so, uh, I’ll say as our was here. Um, the FDA commissioner, um, uh, Robert Cal, Califf was, it was here this morning and they’ve got like NBC, uh, journalists as well as CNN journalists, like doing the interviews. So it’s, it’s pretty, it’s pretty great.

Vic: You get a really good Q and a session cause you have a journalist doing it.

Marcus: Yeah, you have professional [00:23:00] journalists doing it, right? So it’s not like some person who works at the Aspen Institute doing it, who might love softballs or might not know how to handle someone trying to like duck and dodge answering questions. Uh, you know, we’re getting kind of TV quality interviews, which is, which is really, really good.

And they’re also long form. So they get to talk about a lot of stuff. So that was really great. Um, so we, we’ve, we’ve got a couple of pictures that you can, you can, for anyone who’s viewing this on YouTube, which by the way, just quick, quick shout out. We, we do spend time, uh, to try to, you know, curate these, these slides and, and, and bring different visuals.

I know podcasts is the by far most dominant, uh, way that people like to consume our show, but, um, do want to encourage you if you’re, if you’re into actually seeing any of these slides or, or images. We’re on YouTube, just, you know, you can put health further health colon further into the search and you’ll be able to find us.

And obviously we’d love for you to subscribe and share with other people because, you know, we do put a fair amount of work into that. But, um, but, uh, Robert Califf was [00:24:00] interviewed by Bertha Coombs, who actually, uh, Uh, did an interview with me when I launched jumpstart Nova. Uh, so shout out to Bertha. Um, and I’ve got like a long list of notes, so this is going to sound crazy, but I think I’m just going to like go through all the different things that he touched on, cause he touched on a ton of things.

Um, and at any point, Vic, why don’t you just like interrupt me, uh, and say, Hey, let’s, let’s, let’s,

Vic: I have a couple of questions already that I want to, I want to make sure I. Touch on, but yeah, yeah, just, just, uh, how did he start? And, uh, what, what is the, what, what are your comments from the meeting? I mean, the FDA.

Yeah. So it’s huge. You have to control half of health care. So

Marcus: this, this, this is massive. The only thing they didn’t have was the head of CMS there. I mean, you know, but like, you know, the CMS administrator, but like, this is, this is a big deal. Right? So, um, so, so the first question was about the, you know, the fact that this is his second run as commissioner and just sort of asking him what was different between the first run and the second run.

And the main thing that he said was that, you know, This [00:25:00] time around, the country is clearly just much more divided. Um, and so it’s just a much more, uh, much less genteel environment. Uh, but he said, because it’s a second time, he knows his way around a lot better. And so he’s able to navigate, you know, an even more difficult climate.

So that was, that was his primary thing, which I don’t think would surprise anybody. Uh, there’s quite a bit of conversation about the Alzheimer’s drug approval. He mostly was. Um, he mostly was non responsive to that, to that topic, I think, because it’s still in play. Um, but, you know, he, he used that, I think, to mostly sort of segue into the relationship between FDA and CMS, um, and really sort of focused on the fact that we don’t have a good handoff.

Between the FDA and their final work into the CMS and the beginning of their work, and he articulated it that it really should be like a smooth baton handoff and a relay race. Um, and it’s not and so what you end up [00:26:00] having are these 2 organizations that have different mandates and the way that he framed those were the FDA is about making sure that things are safe and effective, whereas CMS is about making sure that things are reasonable and necessary.

Right? And, and. And FDA, FDA shouldn’t be meddling in CMS’s business to CMS should be meddling in FDA’s business. However, if we’re actually going to translate all these breakthroughs that the FDA does ultimately determine are safe and effective, we have to have a better handoff and that got into a conversation that was mostly a comparison of the US health system versus other health systems around the world, a lot of conversation about the UK and the fact that they have a unified health You know, um, uh, system and that that allows for, uh, outcome tracking when you release new, um, therapies into the market in a way that we cannot do here.

He highlighted the lack of interoperability, um, across the healthcare system in the United States, and the fact that the incentives are designed in such a way that different organizations want [00:27:00] to hold their data to, you know, to themselves. And so that literally gets in the way of translational medicine being, um.

You know, rolled out in an effective way and CMS being able to figure out how to pay for things, you know, more quickly because CMS is ability to determine whether something’s reasonable and necessary is much more based on broad outcomes for the whole population, whereas the FDA is always working within the clinical trials framework, which is representative of the whole population, but economically does not actually represent the whole population.

Vic: Let’s pause on that for a second because the. The transparency and data topic. I think it is very related to that where lots of people are pushing for more and more transparency. I think HHS has been driving that, but but health systems and end payers are. either resisting it or meeting it in a, in a, um, less than ideal way.

Um, [00:28:00] but I think we’re chipping away at that, uh, probably more, not probably more slowly than I would like, but I think we’re making progress there. Although it’s not like the UK.

Marcus: No, no, it’s not. Um, actually, you know, I’m going to leave from here on Saturday and Sunday starts the HFMAs. Uh, annual conference, and, um, one of the big topics is going to be interoperability and a growing sense that enforcement for interoperability is actually finally coming, um, probably towards the back half of the year.

Um, obviously, you know, the health systems have pretty much been in lockstep that, you know, until there is real enforcement, we’re not doing anything about this. We got, you know. Mostly we got bigger fish to fry. I don’t think it’s, it’s so much like we’re totally unwilling. It’s just like until you really, really make us do it, we’re not going to do it.

Um, but I know that it’s going to be a, one of the big topics, uh, for, for next week’s, uh, conference there. So I agree with you. I think, you know, we’ve talked in previous episodes about the, you know, the bills that are happening, uh, in the [00:29:00] house around transparency around interoperability. Uh, It’s happening, but it is slow.

It is slow. And there’s a general lack of enforcement to really drive it. So, I mean, my, my sense is this was an area that, um, the commissioner was pretty frustrated in and didn’t feel like he had a ton of leverage or capability to change the way it is. He was just sort of pointing it out. You know, another really big topic was, um, about just pharma in general.

And I would say two, two main areas, one, um, accelerated approval. Uh, so this, this was sort of not talking specifically about the Alzheimer’s situation, but talking about

Vic: approval Alzheimer’s. I think was that’s right.

Marcus: It was, which is why he went to accelerate accelerated approval as an overall topic of discussion.

Right? Again, he would not dig too much into the Alzheimer’s case, but he was talking about all the things sort of around it. Right? Um, and so he talked about accelerated approval. And 1 thing I totally agreed with. [00:30:00] That that he said was, he said, accelerated approval is a reflection of the American personality to take more risk, especially in the face of a terminal disease, which I totally agree with, you know, and and when he’s when he framed it that way.

It made me sort of feel like it’s inevitable that this is going to continue to be politically popular to continue to advance, you know, right to try accelerated approval things, especially for where diseases where outcomes are almost always terminal. I just had a sense that he was of the believe and even talked about.

Um, you know, how it was something that had saved his mother’s life. Um, you know, so he, he gave a personal testimony about that. So my sense is he is going to continue to, to push for accelerated approval. He didn’t make the point that, you know, as a commissioner, he doesn’t actually do any of the. Actual approvals.

He works at things at the systems level. Um, but I think at the systems level, he is pretty pro accelerated approval. [00:31:00]

Vic: Yeah.

Marcus: Um,

Vic: that’s a good place to touch on the difference between the mandate for FDA and the mandate for CMS for my board. Like Congress, I think because of popular demand or, or because they’re politicians, they passed accelerated approval, but they didn’t tell CMS.

I don’t think. You have to cover these things. Um, and there’s a lot less data in accelerator approval. They just don’t have, CMS doesn’t have as much to work with.

Marcus: Yeah. So let’s, let’s stick a pin in that and come back to it when we get to HHS, because, because that gets into the entire conversation around.

Um, okay. Just the relationship between the government and pharmaceutical companies and their ability to negotiate. Um, which I think is just an overall shift in positioning. But we’ll come back to that. Yeah. So, so actually, the next topic was, was all around, um, the IRA. The nine year limit on, on [00:32:00] small molecule, um, you know, drugs and, uh, and, and just generally the, the vast differences between the innovative drug industry and the generic drug industry.

Um, and I actually had a conversation last night with one of the co founders of Civica, um, guy named Carter Dredge, who’s, who’s, uh, who’s a top, uh, a C level SSM, uh, which is based in St. Louis. Um, amazing guy. He’s in my, he’s in my health innovators fellowship.

Vic: I don’t know him.

Marcus: Well, he’s amazing. Civica is fantastic.

And, and, and it was great.

Vic: Yeah, yeah,

Marcus: yeah. So, so what the, so, so civic is a nonprofit that really is a, is, is formed sort of as a consortium of, um, of health systems who were dealing with this, this, this fundamental problem in the generic space, which is, um, we basically have a supply and price challenge where generics by the nature.

Of what they are generics. There’s no defensibility to them. Okay. And [00:33:00] so what that means is that it’s really a race to the bottom. And the bottom is a place where between group purchasing and these scaled out distributors and their relationships and the way that they work together. The price for a generic can get so low that you lose money.

Like if you’re a network. You know, you lose money if you’re selling that drug, and so you don’t sell it or you don’t prioritize it or whatever and what that is leading to, I

Vic: mean, where the real conflict is, if I wasn’t in the media, so maybe they didn’t talk If you make it outside the U S it is almost always cheaper, but, but yes, it’s not, that was, that was

Marcus: a massive part.

Vic: Okay. Yeah.

Marcus: That, that, that, that was a massive part of the conversation, right. Which is, which is, you just, you simply cannot at the end of the day, the generic business is about lowest cost and you cannot manufacture low cost in America anymore, you just, you cannot do it. And so you, [00:34:00] you get to this place where, again, Um, things are getting manufactured in India or whatever, you know, um, you know, the FDA commissioner framed this as an issue of national security, um, but, but it doesn’t change the economic problem, which is when there are not, when there’s not an obvious path to profit, which many generics are, are resulting in a lack of a path to profit, then you have supply chain issues and you have availability issues.

Vic: No one’s going to, no one’s going to. Build an insulin production facility because they, they don’t know that they can make any money on it.

Marcus: They don’t know they can make any money. Right. There’s no, there’s nothing to stop them from losing to an offshore competitor. This is exactly the problem. And so Civica basically recognized this.

This fundamental flaw in the economic model and said, look, we need these generic drugs. And so they basically have created their own, um, their, their own entity, uh, to sort of.

Vic: [00:35:00] Yeah,

Marcus: it’s, it’s not just buying it. It’s down to production. So, so they, they really are sort of take, they’ve created their own.

Nonprofit pharma company that is, you know, that that’s focused entirely on generics with the purpose. The purpose is not to make profit. The purpose is to ensure availability, right? Um, and to make sure that people who need the drugs can get the drugs that they need. Um, so anyway, civic is fantastic. Uh, Carter, shout out to you, man.

You’re a great dude. Um, but anyway, this, this is an FDA level problem. You know, the way that the commissioner framed it was, this is a national security issue. So didn’t really have like a great answer for it. Because when you look at the economic model generics drive, low cost and and if the cost is such that you have no competitive protections from offshoring and you have no guarantee that you’re going to make a profit, which actually gets into something else.

The HHS secretary talked about. Then you’re going to get out of the business, um, and this, and this is why we have these, these shortages. This [00:36:00] was framed around insulin. It was framed around, uh, you know, vaccines like the shingle vaccine. Um, so there’s all sorts of like just crazy shortages that are, that are happening.

Um, big topic there. Then they actually got into a conversation about e cigarettes. and so I’ve, I’ve got, I’ve got a crazy stat for you. This is, this is insane. The FDA has received over 27 million applications for vaping products, only 23. They’ve only approved 23 of them, and they’ve gone through 99% of the application.

So like, so they’re 26? Uh,

yes. I mean, yeah, so, so just, just totally crazy. Um, you know, he, he highlighted that it’s not in their power to make vaping illegal. Um, there’s all sorts of questions about, you know, the, the, the benefit of vaping versus combustible nicotine. He did say that they would be having some, um, some announcements coming out [00:37:00] soon, some rules around menthol and flavored cigars.

He expected to get sued over them, but that these rules would be announced here pretty soon. Um, so that was that was pretty interesting. Uh, and then and then there was a conversation about digital health, which really very, very quickly moved to large language models. It’s like, I was, I was shocked at how fast we went from digital health to large language models.

There was almost no discussion about all the other modalities of digital health. Um, and, and, and effectively, you know, he said, I think what we’ve been saying since we started the show, um, the big opportunity for LLMs. The initial opportunity is in the operations, right? You know, physician spending 80 percent of their time keying in information is just ridiculous.

So we need to definitely get in there to free up physicians to do the key work. Um, he said, in drug discovery in the drug discovery process. It’s not really. A focus, or maybe even FDA territory. Um, but I think this will get into something. We’ll talk about later in the show. Um, [00:38:00] using for clinical decisions does get into FDA territory.

Um, but that the, the key problem is that there’s not the circles back to the translation problem. There’s not adequate outcomes tracking. Right? And so, you know, the longitudinal data you would need to really be able to assess. This is kind of different than you would get in a clinical trial. Right. If that, if that makes sense,

Vic: using it in different ways, if they’re using it at all, when it’s, there’s no standards.

Marcus: Correct. Correct. So, so, so his last note on this was that we probably will need public private partnerships to regulate. lms, um, which I thought was, was interesting.

Vic: Hard.

Marcus: Yeah. That, that, that was interesting. Uh, and then, and then his final note of the whole thing was, uh, which kind of was like a throwback to all the, the Covid times was he said, the, the anti-science movement is real and dangerous and that we need non-governmental organizations [00:39:00] to combat this.

And then his final thing was. And that requires courage, because when you do stand up for science, your life can be threatened. Um, so kind of a somber note to have ended his, uh, you know, yeah, yeah, I thought so. Um, but I think it just kind of shows he started by talking about how divided. The country is, and he ended talking about, you know, the biggest threat is the anti science movement.

And so that is certainly the position of the FDA under this administration.

Vic: Well, and it might be useful just to touch on. He was commissioner, and then he took off several years. Three to five years. I can’t remember and five years. Um, five years and he was I think he was working at google He was working at one of the big tech.

Yeah As a tech community in a way that most commissioners don’t

Marcus: correct. [00:40:00] Yes, he worked at alphabet and Yes, he worked at alphabet and he he he mentioned that when he was talking about interoperability and he said Listen, I worked at Alphabet for five years. I can tell you interoperability is not a tech issue.

It’s a, it’s a, it’s an economic interest issue. Um, and, uh, you know, until we can fix that with some kind of, you know, regulation, um, we’re going to continue to have these silos of data, which, which will ultimately have all these repercussions that ultimately lead to the inability to get, um, treatments for the men, the thousands of diseases out there that today have no treatments.

Vic: In the Wall Street Journal, I think it was Friday, I believe it was Friday. It might’ve been Saturday. Um, they published a story about a nurse who’s a oncology nurse. Um, she was overridden by an AI system [00:41:00] telling her that it thought her patient had sepsis. And she has treated leukemia patients for a long time.

The reason it flagged it for person for sepsis is they had a really low white blood cell count. Kind of makes sense. But also if you have leukemia, you automatically have a low white blood cell count.

Marcus: Um,

Vic: and so she had to go through, uh, she had to draw blood, she had to send it for testing. She had to do a bunch of things that were at least a Um, a delay and, you know, generate some cost and inconvenience for her as a busy nurse and for the patient.

And so the Wall Street Journal, uh, wrote this article sort of interviewing her and questioning, um, you know, do we want AI overruling an experienced nurse? What’s the role of of AI

Very.[00:42:00]

Um, friendly. She’s not a tech hater, but she also has treated cancer patients for a long time. And, in her words, I know sepsis when I see it, and this was not a case of not in here or anything. Um, and so that’s one side of the story. And then, also this week, um, the gastroenterology, uh, trade group, which, you know, I have not spent a lot of time with the gastroenterology trade group.

It’s the American Society of Gastroenteritis and Endoscopy. Um, they came out with a publication, uh, keep the guardrails on. And then they also formed a task group, um, of all docs. Um, to leverage AI and use AI, I guess they have in [00:43:00] their, um, in their image analysis, uh, gastroenterologists have used AI for a couple of years, so this is not new to them.

Uh, and they see a lot of value in it. But they also, they clearly want their doc in control. And so they’ve set up, uh, this task force that I just thought was a really kind of a good bookend to the, to the Wall Street Journal story of kind of how, how the healthcare industry can and should take control of this.

It doesn’t mean these docs, Pictured here, there, if you’re listening, just an audio, there are six stocks, five in the U. S., and they’re very, I went and looked at the, the biographies, they’re all very, uh, experienced, you know, huge CVs, and then they have one from Italy, uh, so they do have an international piece, and I just wanted to kind of highlight it, because it [00:44:00] came out this week, but also it’s, I think it’s a great, um, example.

Every specialty has their own society. They’re certainly capable of forming task force to use AI where it is. But not let it go off the rails, uh, as they said in their, their article. Anyway, I think that is sort of the two sides of this debate playing out in the last week.

Marcus: Well, so, so in this case, um, you know, I, I think what’s, I think what’s illuminated for me here is that we’re, we’re, uh, We are correctly referencing AI in both situations.

However, my, my sense is that there, there’s 2 different flavors of AI being discussed here. Um, and, and, and I’m not even sure that either 1 is really, um, Even the one that has caused the [00:45:00] most, um, you know, uh, the most anxiety over the last couple of months, which is really generative AI and these large language models.

Um, you know, any AI that’s been used for the last, you know, 23 years to, uh, you know, do pattern matching with with images. It’s AI. It’s a model. It’s probably, you know, largely sort of algorithmic. Um, but it’s not the same form of AI that we’re really sort of freaking out about today. Right? And so this just gets into an entire, uh, education, you know, process where I think because things get so quickly politicized, and this is a topic that I think you could probably argue should be politicized to some degree, uh, I think is going to be misunderstood the different flavors of it, the different applications of it.

And we, I think your point here is, is, is an important 1, which is in this form of AI. That really is a, is a true tool, right? Um, the doctors have been [00:46:00] using to identify. Uh, things based on images, based on being able to match against huge databases of other images that have been, uh, you know, coded against positive or negative, um, you know, diagnosis of particular diseases, polyps, et cetera.

Um, that’s a very, very different thing than running data through, you know, a machine and it trying to determine what the next right step is from a clinical perspective for a patient.

Vic: So,

Marcus: um, like, I

Vic: agree and I also. Want to add to that. So I agree that, uh, both of these examples start with artificial intelligence, uh, kind of what expert systems used to be called or data prediction systems.

We, I mean, you and I know people here in Nashville that created the first sepsis, um, sensing tool and the company was sold and very successful. That was years ago, nine years ago. And it was not using a large [00:47:00] language model. It was using a lot of data. Um, but I, I think the, um, the Society of Gastrointestinal and Stenopathy, I can’t say the words, they are taking it a step further.

So in their article, and we’ll link to it in the show notes, but, They, uh, they recognize that AI has been a part of the practice, especially in imaging, as you’re referencing, for a long time. But they also are trying to take control of the large language models for, they literally call out, back office and administrative work.

But they, um, it’s kind of a slippery slope, or it’s not clear where the back office ends. For instance. The clinician notes, and then that translates to billing. And then you need to, um, fight a claim with a payer. That’s all back office, but there’s a lot of doctor, [00:48:00] um, sensitivity to some of those things. Um, And so what I liked about this is they’re taking a kind of a proactive approach.

They want to be, you know, like they call it, like keep it in the, in, in between the guardrails that I had this image of, you know, these six stocks driving the. The boss are driving the industry in the direction they want it to go. That will deliver better medicine, better outcomes, but also leverage the tools.

I, but I think you’re exactly right. That the story from the wall street journal was, you know, a little bit of grabbing an AI headline that. Has been going on for a long time because of the political environment. So I think it’s kind of both ends.

Marcus: Yeah. And I, I would expect, and I’m going to try to connect two dots here, but I would expect that this is the kind of, um, steps that commissioner Califf was talking about when he talked about public private partnerships, right?

[00:49:00] Uh, he’s, he, he, he was a practicing physician. I think he wants physicians to be taking a leadership role. In this regulatory process of these large language models, but he knows it can’t happen entirely within the walls of the FDA. So I think, you know, when he talks about the private side, uh, I’m sure he’s, he’s anticipating there’s going to be, you know, companies, but I’m sure he thinks that these, um, physician, uh, you know, groups, um, these physician industry groups are going to be very, very important players in this process.

Vic: Yeah, they’re, they’re really best suited to. At least contribute to how these things are put together so that it is right as safe as it can be I mean all medicine has some risk with it, but we want to make sure that the The benefits are well in excess of the risk, right? So you’re going to use them to do a lot more.

It’s not that you’re never going to have a patient die, but we want to make [00:50:00] sure it’s much better than it was previously.

Marcus: And, and, you know, we can talk about the control mechanism here, but really what this, what this represents to me is a commitment between these five doctors that represent five very.

You know, prestigious organizations probably to share data. Right? Um, so, so there’s, there’s, this is the way, and it’s a really interesting thing because, um, it’s, it’s part of this American ethos, uh, to Tocqueville wrote about this in, in democracy in America, basically said, like, you know, our, our democracy actually is like very, very dysfunctional and ultimately leads To tyranny, because we have this majority rule thing, but we get everything done in America through associations, which is like our unique superpower that the rest of the world doesn’t really understand.

And it’s like, it’s interesting, right? That, like, we can’t actually through the political mechanism actually get interoperability to where it needs to be. So we have these different physician affinity organizations coming together. [00:51:00] Basically saying, okay, we all agree. We’re going to share this data because it’s in our shared best interest and it’s in the best interest of the patients we’re taking care of.

Right? And it’s like, that’s how you actually get the interoperability

Vic: and I took it down, but it’s, um, it’s Boston, New York, Seattle, Kansas City, there are two in Seattle. Uh, but for the most part, it’s spread around the country, and then they pulled in Italy. I think they will share at least best practices and the ways, the methodologies, the procedures.

Where they can leverage AI in a good way, or at least recommend practices do that. And then I think, I think they’re going to share results, have to share sort of some of the underlying data that allows it to work.

Marcus: I think they’re going to share results. And the, the, if there was one takeaway I had, it was that the ability to effectively regulate.

AI is going to be dependent on outcomes tracking, [00:52:00] which is something we’re terrible at in the United States. Like, in fact, you know, um, commissioner Caleb was was regularly referencing how he has to go to Israel 1st. Uh. You know, or, or even Abu Dhabi, because they, their systems are such that when they roll something out into the gym, into gen pop, they can track it.

Cause they’ve got these unified systems and it’s integrated and they can track outcomes, right? Whereas here it’s all siloed. It’s all independent. There’s economic interest to keep it that way. And so literally these organizations saying, Hey, we want to have this control. What does that mean? That control as a group means we have to share the outcomes.

I think that’s what I’m reading into it. And I think this is a good thing. We need to see this happen more and more and more amongst different specialty groups, you know, amongst primary care physicians, et cetera,

Vic: cardiac surgeons and the cardiologists, we need every, every specialty to, um, to figure out, do they want to use AI at all or not?

And in what [00:53:00] way?

Marcus: Yes.

Vic: And the, the. The dots and then even you know, the nurses to some extent need to sort of contribute Probably more so than the technologists the technologists can make whatever they they want happen, right? They’ll be important but they’re not the They’re not going to really shape it.

I don’t think they should.

Marcus: Yep. Agree. All right. Uh, anything else you want to cover here? Otherwise, I’ll, I’ll just wrap up with, okay, cool. Cool. Yeah. So, um, HHS secretary, Javier Basar, he, um, uh, he sort of closed out the day in the, in the main room. Um, and it was, it was interesting, the difference between, uh, Commissioner Califf and Secretary Pissarro, just where we started.

So we started, uh, the HHS discussion around the fact that he had just met with the G7 and was about to go to Geneva, um, to meet with the World Health Assembly and it was, it was a conversation about the pandemic preparedness. Right? And, um, our ability [00:54:00] to align and collaborate across different countries.

Um, now that we are in the, uh, You know, postmortem phase of a pandemic that, you know, proves to us what we all know, right? It’s like we have these nation states and we somehow act like borders and nation states and things of this nature have any actual bearing on our, you know, connectiveness as a species on this planet.

And oh, by the way, it doesn’t right. Exactly. Exactly. So, so, so then you have to sort of talk about how you navigate. Okay. Um, you know, these geopolitical realities against science, you know, and it’s it just seems so silly. Right? Um, but then you also have to sort of think about some worst case scenarios.

Now. Now I’m I’m saying something that he did not say. Uh, he did talk about China. He did talk about how data sharing remains an issue. And he talked about the fact that, you know, he wishes there was a better relationship with China. You know, even [00:55:00] around getting clarity around the origins of covert. Okay.

Right. We, we know that there’s still lack of clarity around that. But, you know, we also know that that, um, bio warfare is at least a looming threat amongst the many different forms of warfare, cyber, you know, nuclear, um, you know, guns, et cetera, but bio is, is, is in there. Right. And so just the idea that we can’t presume that as these, um, you know, biological, you know, Uh, you know, pandemics are, are unleashed on the global population that they are not actually part of warfare, you know, is that’s, that’s, that’s such a, that’s such a difficult truth to, to wrestle with in a conversation about healthcare.

Vic: Um, kind of a unipolar, the U S and all of our friends, pretty dominant around the globe, um, you know, peaking at the turn of century. To now, I don’t see a [00:56:00] future where it’s not multipolar, with the U. S. being a strong, and our friends being a strong component, but not the only one. I think there’ll be several other things, and then we don’t have good visibility to what the other players are doing in economics, in warfare, in health, in anything.

Marcus: Yeah, so, so we started there with the fact that that’s, that’s a big component of the work that he’s doing right now. Um, and, uh, there wasn’t much more to say about that. Um, he, he did talk about

Vic: sure. Who is it that interviewed him

Marcus: this week? Oh, um, I’m forgetting her name. Let me, let me pull it up from the app, but I’ll keep talking as I pull it up.

Um, yeah, well, no, no, no. I, you know, I remember Bertha Coombs. So I want to be able to say her name as well. Um, but, but anyway, um, one, one comment that he did make, uh, about global partnerships. What there was this sense that, um, secretary, but [00:57:00] Sarah was, was much more, uh, political and talked about, you know, um, President Biden much more definitively.

Uh, I don’t think I really heard. Commissioner Califf mentioned Biden’s name one time, so that there was this, this, this clear difference between the two and from a, from a, uh, from a partisan perspective, um, he’s more of a secretary

Vic: appointee than, than the FDA.

Marcus: I think so. Yeah, I think so. And, um, and so, you know, he, he talked about the fact that from a global partnerships perspective, you know, as he’s going out and he’s talking to people.

There is a sense that America is back, meaning we’re back at the table. We’re back in partnerships. Um, and there is this question as to whether or not we’re going to stay, um, at the table. So obviously we have a, you know, an election that’s, that’s looming, uh, you know, building up for, for next year. Um, Elizabeth Cohen, senior [00:58:00] medical correspondent for CNN was who, uh, interviewed him.

She, she did a great job. Um, okay. So, um, Well, on that point, I mean,

Vic: maybe that’s true. I don’t think we have a choice, but to stay in this conversation. I don’t care who the president is. I think we should be in the conversation. Well,

Marcus: clearly, clearly Trump had a very, you know, Trump’s whole thing was America first, and he definitely had a different foreign policy perspective as it pertained to all of these things.

So, I think without getting too much into what was the right perspective, what was the

Vic: wrong perspective.

Marcus: Yeah, well, okay, I’m going to avoid that and just sort of highlight that. Yeah, yeah, yeah. I think what I would just say is he was acknowledging something that I think you and I saw back back in 2019 when we were traveling to the UK, right?

Um, pretty regularly, right? The just the perspective that the world had when Trump [00:59:00] was in office. Um, it was pretty strong. Uh, you know, there’s pretty strong feelings about his, his perspective from a, from a foreign policy, you know, view. So I think, I think he was addressing that.

Vic: I don’t view it as, uh, just so I don’t get a ton of hate mail.

I don’t view it as, uh, Democrat or Republican . I think if the world is bifurcating into multipolar, we have to be in the conversation from whatever side you’re on. Totally. Totally. That’s my opinion. I don’t think it’s Democrat or Republican, but anyway, so anyway, keep going.

Marcus: Yeah. Okay. Then the next topic, which actually reminds me, I, I should, I should talk about this, um, the next topic was around, uh.

Gender affirming care, which, which very quickly got into reproductive health. I want to just step back and talk about this conference. Uh, like half of this agenda is about women’s health, like not kidding, not over exaggerating the titles, the panels, the setup, um, [01:00:00] and, and, and they were pretty unapologetic about that at the opening, uh, plenary session that they’ve programmed this, uh, you know, largely.

to give voice to a, to a conversation that needs voice right now. Um, I, I think there’s no question that that is a Dobbs driven, uh, you know, sort of agenda. Um, so I just wanted to, to, to point out that I, I can’t remember ever going to a healthcare conference where half the agenda that, that, that wasn’t specifically focused on women’s health where half the agenda was women, women’s health oriented.

And certainly, um, This event has a very strong allocation of the agenda to women’s health. So starting to get into gender affirming care, um, this, this section kind of got pretty political. I was talking about the eighth circuit court of appeal, just generally how these things are bouncing around in the circuit courts.

Um, you know, and we’re, we’re in a bit of a state of limbo right now between the states and, and, and, uh, the federal government as it pertains to gender affirming care. Um, I think he was pretty clear the Biden administration, um, is going to use every federal [01:01:00] tool. They can to ensure that gender affirming care is something that is available at the states.

But clearly they have limits and clearly the courts have a say in this. And so it’s sort of an ongoing situation. It was not a definitive conversation, but it was, it was brought up. Um, it moved pretty quickly to, to, um. To reproductive health, and then there was, you know, uh, you know, a discussion around it was more of a story.

They started telling about, um, you know, when he was in Saint Louis at at Planned Parenthood, you know, for, um, some of the final abortions that were delivered right before. The final verdict came down and then they had to start calling people and telling them that they weren’t, um, going to be able to, to, uh, to provide any more abortion care.

And he sort of highlighted that, you know, 15 minutes away in Illinois, you know, it was totally there. And just sort of highlighting we are in this sort of states rights moment in America, you know, which, which is, which is, you know, it [01:02:00] truly is pretty new for me. I mean, I, I remember I grew up in New York.

The one issue I remember being a sort of definitive, uh, where certain states had certain rules and other states didn’t was around guns, you know, because I grew up in New York where you couldn’t have guns. But I always knew in the south, you could have guns. Right? So, you know, but outside of that, I felt like, for the most part, the states had pretty, you know, Pretty uniform rules, uh, around things.

And, you know, from state to state, you can kind of expect the same thing. And, you know, I think he was, he was highlighting that we are moving into this, this era where from state to state, you’re going to have very, very different rules. And I don’t believe it’s limited to just, um. You know, I don’t believe it’s limited to just health care.

I think education obviously is another area where we’re seeing, you know, um, striking differences, uh, you know, based on which party is in control of a particular state. So, um, just just just just more more highlighting the division

Vic: in general, I think that allows for lots of A B testing of of all kinds of [01:03:00] policies.

But when you get to health, it can be much more, it’s much more personal. It’s much more, um, it’s less of a, you know, intellectual, like sort of tax law, for instance, I would say it’s healthy to have 50 different plans. And then we sort of learned from all those different experiences. In healthcare, especially when you get to, um, abortion, you know, choice and not choice, or, uh, um, you know, gender affirming, those are really personal and emotionally charged issues, and then taking that to an A B testing thing is just a lot harder.

It’s a lot more fraught with I don’t know that we’re going to resolve this right now, but I like the structure of the federal and state, but then when you get to healthcare, it gets much more complex.

Marcus: Yeah. Yeah. And I think he just threw story, tried to try to illustrate [01:04:00] how, how difficult that can be. And it also sort of showed the limits of his power.

Right. You know, um, you know, in, in a time like this to, to actually affect change across the country. Um, you know, started a conversation about prescription drugs. So, uh, you know, I don’t know if this was a bit of an announcement. I hadn’t been tracking it, but he said, um, in the very near future, the 1st, 10 drugs that the U.

S. is going to negotiate drug prices on will be announced. Um, and. You know, this is a brand new law. This was not, uh, you know, not, uh, allowable before. Um, and he said, you know, once they’re done with these 10 next year, they expect to have another 15 and kind of go on and on and on. Uh, he said, he said he personally has already been sued by the pharma industry, the U S chamber of Merck.

And he wasn’t a committal on Bristol Myers, but the crowd kept saying. Bristol Myers was the 4th party that, that, um, has filed suit against him, so he wasn’t committed to that name.

Vic: I think the, um, the 95 percent excise tax thing is, [01:05:00] is definitely going to go to the courts. That’s a hard

Marcus: He, he’s, he’s, he said the whole thing’s going to the Supreme Court.

He, he’s, he’s, he said this is where it’s headed. But, you know, he is going to do it. He’s going to negotiate. Drug prices on behalf of, um, you know, Medicare and Medicaid, which I think is, yeah,

Vic: no, I don’t think anyone,

Marcus: but it’s a watershed moment.

Vic: He should be able to do that. The, the, like, well,

Marcus: hold on, hold on.

Clearly the pharma industry, the U. S. chamber Merck and potentially Bristol Myers do question because they’re suing him about it. So I just want to highlight, you know, clearly there, there are those who, who do oppose this. He, he was very, Um, pointed to talk about the suits and I think it’s, you know, it’s important to, to note like, um, we, we, we certainly don’t have clarity on how the courts might rule on this in this kind of situation.

Vic: This is we need to pull Emily. And but I think that, um, what people are upset about is if the negotiation fails. [01:06:00] Negotiations work best when it is reasonably balanced. Like the US is a huge buyer and he should negotiate. I think that’s, I would say that’s clear, but if they can’t come to terms, then it like kicks into this, they, they, Put a 95 percent tax on the price of the drug, and that’s what people are upset about because it’s like, uh, we’re going to negotiate, but we don’t have to really try.

Anyway, we should have a yeah, about that. So she’ll be much better than

Marcus: yeah, I think this entire topic of of, you know, the inflation Reduction Act, its impact on the pharma industry, right? Um, innovation drugs versus generic drugs. Uh, you know, the, the negotiation of, of drug prices, um, civica, there, there’s an entire thing here.

I think we need to start to dig into, um, and it was illuminated for me [01:07:00] this week. This was the big area that I had not been focusing on very much. And now in retrospect, I’m realizing this is a, this is a massive, uh, Aspect of U. S. healthcare that I need to better understand from an innovation perspective to know, you know, where are the opportunities and, uh, you know, what are the challenges this is going to well, it’s

Vic: partly because we don’t do front.

We don’t do life sciences investing, but it affects everything. So we do need to learn about it.

Marcus: It affects everything. Your reason for why we don’t focus on it is correct. And it affects everything. And we still need to be better dialed into it. Um, and that was like the last topic. Okay. Was this combination of behavioral health and gun violence.

Um, so another theme that has come up several times over the course of, you know, my time here and Aspen has been gun violence as a health care issue, um, being articulated by emergency room physicians who. You know, work in inner cities and regularly have to deal with gun violence trauma, [01:08:00] um, as a health care issue and how, you know, obviously in the political lobbying space, the NRA has pretty fought has fought pretty hard to try to say this is not a health care issue and doesn’t have any bearing.

And so, um, the reason why I’m starting there before I go to behavioral health is because, you know, some of the things that, you know, The HHS secretary was talking about that they’ve done are things like they’ve sent money to schools after a school shooting. Right? And so the obvious question is, okay, well, why can’t you send the money there beforehand?

And the reason is because, um, obviously the difference in the, the. You know, the, the state’s rights versus the Fed, but also just this general limitation to the ability to consider gun violence as a health care issue. Right. And, and all of the ripple effects that happen as a result of gun violence, you know, the behavioral health issues that happen in the, in the, um, in the aftermath [01:09:00] of, of gun violence, you know, and that’s something I think you and I understand, you know, better than maybe we previously did.

Yeah, because of covenant and the people we know, right? You know, and the people that we know who have been affected who, you know, I mean, you and I both know a lot of people actually, um, you know, who, who have families who were, who were impacted, um, through that. And I think we both know they have a long road.

Um, you know, from a, from a behavioral health perspective. Right? And it’s like, that’s, that’s health care. Right? I mean, you know, that, uh, you know, the, the aftermath of that is going to affect health outcomes for people. Period. End of story. There’s no other way to put it. And so that that was just, I had, I, I’ve been thinking about gun violence, largely from the political lens of gun control and, you know, red flag laws and all those types of things, not thinking about the healthcare implications of it.

I [01:10:00] mean, obviously thinking about the trauma, but not necessarily thinking impact to the health care system, the expense to the health care system, um, that, that, that it creates. And so, um, that was, that was a topic and, and honestly, it wasn’t that encouraging, um, you know, to hear sort of his remarks on it because it just doesn’t sound like there’s much that can really be done from, from the, in the perspective of HHS as an, as an entity.

I

Vic: agree that it causes a ton of behavioral health issues, but I, I think behavioral health is a really terrible. huge problem with many, many causes. And gun violence is certainly one, but there’s, there’s alcohol and drug addiction. There’s the stress and anxiety and pressure and family life and all, there’s all kinds of things that are contributing to the behavioral health.

I think the

Marcus: difference, I think, I think the difference is that those things that you mentioned are [01:11:00] considered to be proper health care matters that, that was, that was the point. That was the point.

Vic: As a health care topic

Marcus: as a proper health care issue. Yes, as a proper health care issue that that was, that was the thing that I hadn’t really contemplated before is that all the other things that that we generally associate with with behavioral health, you talked about a substance abuse issues, um, you know, domestic violence, um, you know, all these other kinds of things they do happen to generally fall into the health care.

You know, um, bucket and and gun violence has been excluded and it’s been excluded intentionally and politically. Um, and so

Vic: that’s in there too. I mean, I think homelessness is a behavioral health totally

Marcus: agree. Totally agree. Um, so, so that that was, you know, there was a lot of conversation around 988 and, um, you know, he, he mentioned, I actually wanted to do some, [01:12:00] do some sourcing on this, but he, he threw out the stat.

The text based therapy is up 1000%. Um, and so I wanted to kind of see. Okay. Is that with teens specifically? He mentioned. teens, but like, is that what teens specifically in what timeframe, is it up a thousand percent? You know, um, is it up because, is it, is it up somewhat because of the, the rise of, um, telemedicine during COVID because of emergency, you know, um, use authorization.

So I, I wanted to understand that a little bit better, but still the idea of text based therapy being up a thousand percent is a really big deal. Um, and then also talked about the, the, The issues from a cultural competency perspective when it comes to behavioral health and how black and brown communities just suffer more, um, from, from an access availability, cultural competency perspective.

Um, so that that was also mentioned. Oh, final thing. I’m going to shift shift away from behavioral health. The final thing was Medicaid redetermination. Um, so, you know, I, I didn’t fully [01:13:00] understand this. I thought he did a good job of simplifying the issue, uh, during cove it. You know, states were allowed to just basically cover everybody and that that just meant eligibility checks, which were sort of an annual thing that everyone was sort of used to were waived.

Well, they were waiting for 3 straight years and now we’re about to go back into eligibility checks and 15 to 17M people are likely unaware of that and could lose coverage. And so literally, this is a communication campaign. It’s an engagement and communication campaign. That’s really all it is that there’s not it’s not.

Fundamentally about the status of the emergency, you know, um, event going away or any of that other kind of stuff. It’s mostly about do these people know they’re going to get something in the mail and when they get this thing in the mail, they actually need to respond to it or they’re just going to, you know, toss it to the side.

Um, and how

Vic: many of them have, um, got a job where they have coverage or [01:14:00] they have covered some other way. And so they throw it out because they don’t care and how many throw it out and they, they actually need it. I’m not sure that the states are going to be able to distinguish between those, those people.

So they got to

Marcus: figure out. This was the problem. Yeah. This was the problem he was highlighting was, was it’s actually going to just be a challenge, right? It’s, it’s a communication challenge. He was. He was very careful to not fault the states. He said, you know, we, you know, some states are probably going to do a better job than others.

We’re doing our best to try to support the states in this effort, but, you know, just thinking about what the fallout could be from, you know, over 10 million people losing their Medicaid coverage and potentially not having, uh, you know, new coverage that has been picked up because they’ve, they’ve got healthcare through a job or something like that.

Um, that’s, that’s a pretty scary prospect from

Vic: the kind of the opposite point of view. Yeah. So I think that that, that is going to be a communication challenge. I think what happens is when you need care, [01:15:00] you don’t have coverage and the medical, the health systems will then re sign you up. That’s, there’s a lot of loss and, and issues there with individual people.

But the other side that I’ve been really looking into is that a lot of payers have been able to bill for this because they have They have Medicaid, um, enrollment, and some of those people, some percentage have gotten jobs elsewhere. And so they don’t, they don’t have coverage anymore, even though the states funded by the federal government are still paying for it.

So it’s a negative to all the payers that have exposure there. And I’ve been looking at that with Emily from a They’re all most of them are publicly traded. So it doesn’t really affect venture assets. There are some small payers and it’s a that’s the other side of it that they’re getting, you know, They’re getting paid for these people, but they’re not they’re not getting care through that system and they don’t even necessarily know they have it [01:16:00] anymore because they They have moved on and they have a they have employer based care So there’s going to be a sort of a you know, sifting out.

It’s going to be negative to the payers You that have a lot of exposure, like centene has a lot of exposure there. I don’t know what percent it is, but it’s It’s not zero that they’re going to lose that kind of high margin, uh, subscriber base.

Marcus: Interesting. Um, all right. Well, that is my recap from Aspen ideas, health of, uh, the FDA commissioner and the HHS secretary.

So hopefully, hopefully that was interesting or, you know,

Vic: so hopefully the audience will like it. And we are trying to be a political, but when you’re talking to, uh, appointed officials, you end up getting all kinds of information. That’s really valuable if you don’t like it tough. [01:17:00]

Marcus: Yeah, yeah, I, I, I think, I think we, we, uh, we, we generally, uh, you know, try to call it down the middle.

Um, yes, uh, there, there, there are clearly things that are, are partisan. And, and I, I think it’s important to track them because. Uh, they really will come into question next year as we get into the election, you know, cycle, uh, and we really start to possibly, which, which is totally unclear, uh, right now. I mean, there’s so much crazy stuff going on, I mean, between Hunter Biden and RFK junior and, you know, Trump and diamonds.

I mean,

Vic: that was

Marcus: yes. It was amazing. It was amazing. Mean, don’t,

Vic: I don’t love Gavin, but he did an incredible job. He really did. He

Marcus: crushed it.

Vic: Yeah, he crushed it.

Marcus: He crushed it. Yeah. So, so, so we have a field. I want him to run the field

Vic: and I, I don’t know why he doesn’t run, but I, I do know why. I just don’t like it.

Marcus: I think he’s just, he’s just waiting for the opening. Clearly he’s just waiting for the opening, you know, [01:18:00] um, anyway, look full week. Um, you are not going to be around next week. Next week on the

Vic: next week. Oh, is that right? Yeah. Yeah. I’m here. I’m here on the 29th, but I’m gone over fourth July.

Marcus: Oh, okay. Okay.

All right. Well, I’m having Dave Johnson come up to the studio anyway. Okay. Okay. Well, next Tuesday. So, so I’m going to record something with him and then, and then we’ll, we’ll record. Next Thursday. Okay. All right. Thank you.

Vic: I’m at the back end of this. If you lasted this long, you’d hear the inside baseball of it.

Marcus: Yeah. Look, it’s just the two of us trying to figure out how to like keep this thing going week to week. All right, man. I’m headed to dinner. I will see you next week. Okay. Thanks. Bye.