And so how do we go about fixing that? And especially when it comes to generics, my understanding is that an awful lot of people who complain about the price of one drug, if you said, well, why don't you use the generic version, the one that used to be a prescription drug very recently but now is in the public domain and can be purchased relatively inexpensively, is that an unreasonable thing to tell somebody who's on a particular pharmaceutical unless their medical diagnosis requires them to use the latest, greatest, still under copyright or still under patent drug? Lars,

you're 100% correct there.

I led the largest generic company in the world, giving one in six pills to everybody, actually.

And 90% of prescriptions are generics.

i where you where you run into trouble is you run into the insurance companies and say look you're sick go and try a generic which is an old drug yep and by the way come back after you've tried it and then let's see if it works that's not right you've got a new drug stepping through the generic is craziness that's not that's not good medicine you go for the best Every American deserves the best medicine, and any insurance company is just trying to make money off that individual by saying, go for the old drug, not the new one.

If the new drug works better, why are we not paying for the people to use it?

Do we have that kind of arrangement in America?

We sure do.

What's driving this? What's happening

in the field? Yeah, I think several forces have converged almost exactly at the same time.

First of all, and most importantly, the science has become dramatically better.

We're understanding human biology at a level of precision that simply wasn't present 20 years ago.

At the same time, many large pharmaceutical companies are facing these massive, massive patent expirations over the next decade, and they've just got to replenish their pipelines.

What's interesting is you and I know that smaller biotech companies have become very efficient engines of innovations.

But the capital markets have been terribly challenging, making, frankly, acquisition an attractive part for many.

Are there any through lines or lessons from your days of putting together that string of pearls? And is this a back to the future moment for you, right, when you're looking at this M&A phenomenon? in biotech and pharma.

And I wish I would have titled this book a lot earlier, compassionate capitalism doesn't sell off the shelves like don't do business.

Okay, so now I've got a tough call.

I've got to explain what biotech is and distrust and saving an industry.

This is going to be tough.

Look, it's really straightforward.

People buy medicines and they go to CVS and they shell out money.

That's one perspective of what biotech is, and it's not correct.

For you, what is the best methodology to withstand that type of resistance with those many dollars?

Do you still believe that?

100%.

Biotech CEOs are incented by equity, by the success of their products, and if their products are successful, if they go through development, they will be rewarded by the equity.

They're not rewarded by, by and large, by sales.

They're not rewarded by earnings per share.

Their inve- their entire compensation is about how do you actually get something novel into the market.

If you examine the, generally, the compensation of large company CEOs, the levers that drive their compensation are earnings per share, top line sales growth or gro- or maintenance, and sometimes shareholder return over the long term, but mostly over the near term.

Yeah.

So, uh, you know, when you look at this from if you can put yourself in Pascal's shoes, like why, what could possibly be the rationale for doing this?

To be perfectly honest, I would be deeply puzzled.

Unless there's some magical new set of innovation buried in the labs of Bristol or buried in the labs of AstraZeneca that cannot possibly come out without the assistance of the other company.

Synergies can't drive this.

It'll last for a little while.

It'll last the time of Pascal to go off into the sunset.

It'll last the time for Chris to go off into the sunset.

But that, that feels, it feels like a time where flexibility and diversification, you know, would be what you would want to have at your side rather than saying, "Hey, we're gonna be dealing with the cleanup of this situation for a few years," even if it ends up being a great idea.

So how has all this impacted what you just spoke about?

Well, I don't think it's a question of being political or not here, to be perfectly honest, Jim.

This is how you imagine for a moment that somebody said, I don't need a ladder to build a house.

I'm just going to jump on the roof.

That's not political.

That's a ridiculous statement.

And in the context of the vast cuts that have happened at the FDA, that's at the NIH, this is, we don't need science.

Who's going to fill the vacuum? I think there's little doubt, China.

But what, what do you think it is that prevents people from, from speaking up on some of these?

I think overwhelmingly there is a sense of fear, and that sense of fear is misplaced.

If the sense of fear is that a shareholder will abandon you and your stock will fall, that's one fear.

If your sense of fear is that somebody will harm your children, that's another kind of fear.

The first is irrelevant.

The stakeholder shareholder who abandons you because you speak the truth and speak openly is the shareholder you don't want.

It's the shareholder who basically should be investing in, I don't know, let's talk about that rocket's going to the moon.

What made you want to write, uh, Biotech in the Balance now?

Mm.

Biotech doesn't need that.

What biotech needs is something different.

Number one, it needs that every single legislator needs to stand up and understand something really important and say it, that biotech is what will save our children's lives in the future.

It is a strategic asset.

We need it for the United States, and therefore, we're gonna figure out how we're going to implement policies.

I didn't say monies.

Yeah.

Before we get into the urgencies of the American biotech industry and the battles therein, Give us a sense of how you got started in this business so many years ago and how it has evolved over that time period.

Well, that's a great question and one that actually I'm thrilled to sort of walk through because I think it exemplifies many parts of why America is remarkable in this.

My own background is somewhat unusual.

I finished my PhD in the structure of DNA.

That's the things that make genes at Oxford.

And then went over to Cambridge in England and finished my medicine there.

and practice medicine in Europe until I heard about what was going on in America, which was the birth of the biotech world.

No,

Do you see China as a threat, an opportunity, or both?

Elaine, you know, it's so interesting.

It's a, it's, um, those are words I probably wouldn't use, but in my mind, they're all of the above.

China is, let's be clear, China's producing real science, real assets, real companies, and real clinical execution.

And deal flow will show you, Western companies are increasingly looking to China for partnerships and licensing deals, uh, including fundamental drug development.

So you can't pretend that China's irrelevant.

In fact, that would be incredibly, incredibly foolish.

How do we incentivize that long-term investment, and are long-term investors a dying breed?

Why now?

Unlike China, America never said that the biotechnology arena was a strategic asset.

As a consequence of which, taxes, incentives were never put in place of the kind that would deal and help us specifically.

And don't forget, Tiffany, really interestingly, 70% of all medicines, new medicines that are produced by the large companies, come from about 1,000 biotech companies in the United States.

They're different.

They don't make money by selling drugs.

They make money by innovation, creating innovation.

What would be some of the steps that you would advise companies, policymakers in the US to take right now to start reducing or cutting off that reliance, that, and dependence that we find ourselves in on China?

And so how do we go about fixing that? And especially when it comes to generics, my understanding is that an awful lot of people who complain about the price of one drug, if you said, well, why don't you use the generic version, the one that used to be a prescription drug very recently but now is in the public domain and can be purchased relatively inexpensively, is that an unreasonable thing to tell somebody who's on a particular pharmaceutical unless their medical diagnosis requires them to use the latest, greatest, still under-compensated, copyright or still under patent drug?

Lars, you're 100% correct there.

I led the largest generic company in the world, giving one in six pills to everybody, actually.

And 90% of prescriptions are generics.

Generics are really good drugs, and they actually work.

I take one, I take a statin, I'm very happy with the generic.

And I suspect most people in the United States are very happy with generics.

Do we have that kind of arrangement in America?

What your thoughts on that are?

Oh, such a good question.

The first thing is innovation has never been more exciting in this country.

It's the best it's ever been.

And that's built on like 60 years of investment by the government.

and others, pharmaceutical industry, and also creating institutions.

Now, some of those institutions get a bit sclerotic.

And I just – like that's obviously not some – potentially dire side effect of taking the weight loss drug, but it just speaks to the question of, do we really have a handle on the long-term impacts? And how has this been handled now that you have nearly one in five Americans on them?