Episode Transcript
[00:00:01] Speaker A: Hi everyone and welcome to the 247th episode of the Atlas Society Asks. My name is Jag. I am CEO of the Atlas Society. I am super excited to welcome the magnificent Sally Pipes, someone, a leader that I admire and has been a friend of mine for many decades. And we're going to be talking about her new book, the World's Medicine How America Achieved Pharmaceutical Supremacy and How to Keep It. And as you can see, I have many, many tabs here on the book. So I, I greatly enjoyed it and highly recommend. So Sally, thanks for joining us.
[00:00:41] Speaker B: Well, thank you, Jennifer, for having me on. And yes, it has been many years of friendship and we are fighting the good fight. Yes.
[00:00:49] Speaker A: So, Sally, I have noticed, speaking of over the years, how there is a particularly steadfast quality to, to libertarians and objectivists that come from Canada. I think of the Canadians in Ayn Rand's inner circle in her day, or former Canadians at the Atlas Society, Professor Stephen Hicks, or our trustee Peter Copsis. What was your life like growing up in Canada and any early experiences that influenced your trajectory later in fighting for free markets?
[00:01:23] Speaker B: So, so many of us, like the people you just mentioned, we all left Canada because it was becoming increasingly more and more socialist. So yes, I grew up in Canada, I worked at the Fraser Institute, I rose to be assistant director. But in my family, my family was very conservative. My grandfather, who I actually didn't know was a fundraiser for the Conservative Party. We, we were inundated at the dinner table with the three Cs. We were conservative, we were Canadian and we were Church of England members. So those are the three Cs. And they guided me. And of course, so I've been a free marketeer my whole life. But you know, I joined the Fraser Institute as an economist and I realized, you know, we started Mike Walker and I started looking at the health care system. The government had fully taken it over in 1984 and by 1988 we noticed that there were waiting list starting to develop. So we started this project which first came out in 1993, called waiting your turn, a guide to waiting lists. And at that time, the waiting time from seeing a primary care doctor to treatment by a specialist was 9.3 weeks last year. Amazingly, it was 30 weeks. That's well over half the year. And Canadians are on, they have long waiting lists, ration care, lack of access to the latest treatments and a doctor's shortage. So I've been following. I had the opportunity in 1991 to come to the US and take over Pacific Research Institute and I thought was a great way for me to escape the Canadian healthcare system and do try to keep the single payer system out of the US and to do a lot of work on it. So I'm a dyed in the wool free marketeer.
[00:03:06] Speaker A: Well coming to California of course back when you came here things were quite a bit different. But these days I don't know which is the frying pan and which is the fire. But I'm so grateful that we've got Pacific Research Institute out there fighting for our western states and our California now. I thought it was interesting timing for this book particularly since Americans favorability views of the pharmaceutical industry have reached an all time low. One recent Gallup poll found that 27% of Americans had a positive view of the pharmaceutical industry compared to 58% with a negative view. How much of that negative view is driven by concerns over pricing do you think? And how much is tied to things like, you know, vaccine mandates or disappointment with the COVID vaccine specifically?
[00:04:06] Speaker B: Well Jennifer, those are very good questions. And as you know, Covid hit, hit hit us in April of 2020 and the pharmaceutical industry really rose. The poll numbers were fantastic because as you know, operation warp speed and the vaccine makers, Pfizer and Moderna brought those vaccines very quickly to market and about 70% of the world had the first vaccine by 12-8-2020. So they pulled. The pharmaceutical industry pulled very well. But you know, as Mr. Biden became the president he was very anti the pharmaceutical industry as were many of his sidekicks, Senator Bernie Sanders who is not a fan of mine but he was co chair of the Senate help committee. He's very pro, his whole life is supporting single payer health care. I call him the Pied Piper of single payer health care and drug pricing. He gets up on the stump and says, you know, the American people are being killed by high drug prices. Do you know that you'd have to pay you know, $600 a month for Eliquis, the blood thinner which is made by Bristol Myers Squibb and Pfizer and this drug and that drug. He doesn't ever tell you very, very few people in this country pay the, the list price. They pay the net price. That's the price after drug discounts and rebates. And so most people, I'd say 170 million Americans get their health care through their employer, which I wish had never happened, but it is the way it is. But most people get their coverage from their employer and it includes drug coverage. So people may say well My drugs aren't that expensive, but I know somebody who's R or whatever. But between your employer coverage, between the government programs, Medicare and Medicaid, as I say, very few people pay that price. But when you hear Senator Sanders and others say the pharmaceutical industry is just gouging us, it is not true.
But you know, the innocent person in the public just buys into it. What people don't understand is that, you know, it's a very expensive industry. It takes about $2.6 billion from an idea to getting a drug, from the idea, getting it to market. $2.6 billion. It takes about 12 years to get through all the trials, through the FDA and other, the critical clinical trials, and only one in 10 drugs makes it through to the market. But we are the country since not since Europe. All European countries had price controls by 2004. By 2005, 80% of the drug research done was done in the U.S. remember the big companies that you probably are familiar with, you've got Novartis, GlaxoSmithKline, Roach, all of those companies were European companies that did their R and D in the country of their origin. But by 2005, they realized price controls were making it impossible for them to do the research. So they've all moved their R and D to this country.
[00:07:14] Speaker A: So we're talking about the pharmaceutical industry and policies regarding that. But of course you have been focused on health care reform for many, many years, as well as our mutual friend Grace Marie. And what you were just saying caught my attention. You said that it was a bad. You wish that actually we hadn't made this shift to employers providing health insur. Tell us why that is. Refresh your memory.
[00:07:46] Speaker B: So that was in World War II when wage and price controls were in and employers were finding a. They couldn't give a good employee a salary increase because of wage controls. And so the government gave employers the ability to write off the cost of their health care and for us to get health care tax free through our employment. So it became the way of the world. I keep wanting to see something happen and that would change so we could put doctors and patients, Jennifer, in charge of their health care. But you know, once you get a government program, as Milton Friedman would say, it's very difficult to get rid of it. And so I wish that would happen. But it was. The government got us into this mess and now we are living with it. And it's really, it's, it's really too bad. But as I say, I don't know what you know I'm, I'm always pushing for it, but people say, well, we're not interested in that because it's not going to happen. But, you know, and the other thing is that during, you know, we talked earlier about, you know, Europe getting out of the research and development industry because of price controls. Well, here in America, when Joe Biden was president, In August of 2022, he signed into law the Inflation Reduction act, which A, did not reduce inflation and second, brought in price controls for drugs starting with Medicare Part D. The first 10 drugs have been identified. The price controls would go into effect on January 1, 2026. The second 15 would go into effect January 1, 2027. And then it goes on and on until 2029, when there will be 20 drugs under Medicare Parts B and D. And so my push right now, Jennifer, is to hope that the Trump administration will see the importance of not supporting price controls on pharmaceuticals. Where, where are the drug companies going to go if we get price controls? They left Europe. They came here. I always say that in Canada, you know, Canadians have an escape valve. They, a lot come to the US and pay out of pocket for CT scans, heart stents and things like that. But where will the drug companies go? So we really need to hope that the Trump administration will see the light and say we can push and do work on this and then get Congress. It has to be. The Inflation Reduction act would have to be repealed under Congress, by Congress. So I'm hoping that this, it would be repealed before the price controls go into effect starting in January of next year. So that, that, that is a big, a big issue. And I'm, I'm not. My friends, including people like Doug Holtz, Eakin and Brian Blaze, we're not so sure this is going to happen, but we're certainly working hard to see that. We, because we would like to see it happen.
[00:10:30] Speaker A: So one of the things I was surprised to learn in your book was how in the 1970s, Europe led the world in medical innovation, introducing 149 new drugs, compared to just 66 in the United States.
How does Europe compare with the US Today?
[00:10:51] Speaker B: Well, it fares very poorly. Rand did a study showing between 2018 and 2022, of the, of the 276 new drugs that came to market, 74% of those drugs were available in the United States. Only 24% were available in Canada, and in Europe, it's around 43%. So, you know, when you, when you hear people talk about politicians talking about importing drugs from Canada, they don't Even realize that most of the top drugs that we have access to in this country aren't even available because they have price controls. And the government under, in Canada, for example, under the Patented Medicines Prices Review Board, even at a discounted price that a US manufacturer would offer that drug, they say it's still too expensive, so they don't have access to it. In Canada, for example, on any given day there's a shortage of between 1500 and 2000 active drugs. So when people like Ron DeSantis talk about, well, we need to, you know, he signed that bill into law, I think five years ago to allow importation of drugs from Canada to cover people in prisons and on and seniors. But not one drug has been imported. But as the Canadian Minister of Health has said on numerous occasions, Canada cannot be the drugstore for the United States. We don't have enough drugs for our own people. And as I say, many of the new ones are not even available there.
[00:12:18] Speaker A: So one of the things I enjoyed about your book was it contains a lot of history and you describe how World War II really put the US pharmaceutical industry on the map. Tell us what happened.
[00:12:31] Speaker B: Yeah, so back in, back in the day, I mean, way before we were ever alive, you know, Europe, England and Germany and France were the places where drugs were developed. I mean, think about the smallpox vaccine in 1797 by Dr. Jenner that, that eradicated smallpox around the world. Then we had Mr. Bayer of the Bayer Aspirin Company. In 1899, aspirin came to the market. It's been a great over the counter drug now for many Americans for headaches or whatever aches and pains that you may have. And then in 1943, during World War II, penicillin came to the market and it was a huge success. But unfortunately with the war effort in the uk, Britain wasn't able to do all the research and work that was needed. And so U.S. pharmaceuticals companies got involved in the development and getting penicillin to the market. And as I had mentioned earlier, so price control started in many European countries. The British government took over the health care system, the national health service in 1948. Sweden followed in 1955, France from 1928 to 2000. So all of these countries basically took over the healthcare system, took the private market out of the equation. And what happened was the demand for healthcare in these countries went way up and governments thought, we can't afford all of this, so what are we going to do? What they did was they introduced price controls on pharmaceuticals. And so as I mentioned earlier, the cost of doing the R and D, the cost of how few drugs actually make it to market. The US then became. Well, by 2005, 80% of research done in the pharmaceutical industry was done in the US and at the same time, two thirds of all new drugs that come to market came through the United States. So it wasn't the war effort, it was price controls that killed the pharmaceutical industry in Europe and even in Canada. And then of course you have in the uk. It's interesting that in the UK when they brought in the National Health Service, they allowed private care to run parallel. Canada never did that. They didn't want any competition with the government service. So the government program. So Britain today, about 13% of Brits now have private health care. And of course, when the Royal family members have cancer, like Prince Charles and the Princess of Wales, they don't use the National Health Service. They all went private with the London clinic. Private chemotherapy, private surgeries. So as time went on and costs got out of control, the NHS was under difficulties. So they introduced a program in the UK in 1999 called NICE, the National Institutes for Health and Clinical Excellence. And it is not a nice program because this program works out what your quality is, your quality adjusted life year. So that, say you had a condition, Jennifer, and it was a serious condition. And the, and they would take a look at your age and then what drugs are out there and they would say, well Jennifer, you are 80 years old. The cost of the drug that we will need to treat you is X dollars. But the value of your life is lower than those, than those, the dollars of the, of the drug. And so you would be denied that drug. That's another way to control access. And it's a very bad thing. And there are people here in America, ICER is a group in Boston that is trying to introduce a quality kind of program into the United States to help cut costs. But it would also be very harmful to the research and development of these wonderful new drugs. And if you follow this like I follow it 24, 7, you know, there's some wonderful new vaccines coming out and procedures, particularly vaccines for lung cancer, for ovarian cancer, pancreatic cancer, these colon cancer. These are cancers that are very difficult if they're not caught very, very early. In some cases, even with like a, with pancreatic cancer, it's really a death sentence. So there's so many exciting things going on and we want to keep that market open so that we can continue to have access and then allow us to live longer and Healthier lives. The other thing too is that, you know, by having these wonderful new drugs, it allows people to continue to work and carry on their normal life. They can and they don't have to go to hospital. As you know, your father's a doctor. Going into the hospital can often mean there are high risks with that. So and particularly like drugs like blood thinners, like drugs for cholesterol, high blood pressure, these are drugs that now allow people to live normal lives instead of having to be at home, not be able to work and be dependent on other members of their family. So these are things that are also important that the man in the street doesn't understand. If they listen to Bernie Sanders or AOC or in the past, Joe Biden talking about what a terrible industry it is because we are the medicine chest of the world and we want to keep that.
[00:17:55] Speaker A: All right, we've got some really terrific questions coming in from the audience who are really very interested in this topic. So let's get to a few of those. Alan Turner, always joining us. Great to see you, Alan. He asks, is the rise in state sanctioned euthanasia in Canada and parts of Europe surprising or an inevitable consequence of socialized healthcare?
[00:18:21] Speaker B: Yes, it is an consequence of socialized healthcare in Canada. Euthanasia is each of the provinces and well, the federal government, they allow euthanasia. And why? Because it's much cheaper to euthanize a person. Euthanize a person than it is to keep them alive with drugs and hospital procedures. So it's a way to cut the costs. And when you look at, as I mentioned earlier, Canada has a waiting list, a waiting time of 30 weeks from seeing a primary care doctor to treatment by a specialist. So those are, those are terrible numbers. But it's cheaper to allow euthanasia. I think in the UK I think the first euthanasia bill passed in, in, in, in the House of Commons recently. It hasn't come back for a further investigation vote. But I think there is some feedback, some negative feedback on introducing euthanasia in the UK And I certainly hope it doesn't happen here in the US because as you never know what the new drugs that are going to be developed and come to market that can allow us to live longer and healthier lives. And if you're youth, you, if you allow yourself to be euthanized or your family does, then you don't have access to the fact that you might get a new drug and you might be able to live much longer and a productive life.
[00:19:36] Speaker A: All right, we've got a Comment here from John Mladnik on Instagram. He says, wow, 30 week wait. He noticed that to see a doctor here in the US has gotten worse, but nowhere near 30 weeks, a day or two to see the doctor. And the same day if it's life threatening and always the same, the same day for urgent care. And the number of people who die while on the waiting list for Canada and the UK is insane.
[00:20:04] Speaker B: Well, I'll just tell you that you probably knew this, Jennifer, but my own mother in Canada and Vancouver died from colon cancer because as a senior, when she thought she had maybe colon cancer or some, you know, problem with her colon, she was told by her doctor that she could not get a colonoscopy because of her age. There were too many younger people on the waiting list to get a colonoscopy. Finally, when she was hemorrhaging, we took her to the hospital in an ambulance. She did get her colonoscopy but died two weeks later from metastasized colon cancer. So that's a way to control costs, but it's a terrible way to run your healthcare system. And a dear friend of mine in Vancouver just emailed me on the weekend. She's been suffering with incredible back pain. She can't even drive her car. She has such terrible back pain since last October. She went to her gp, primary care doctors, called general practitioners there and she said, well, I think you might have cervical spine arthritis and we really need to get you to get a CT scan of your spine because she's in such pain. So Carol came home and she called VGH Vancouver General Hospital to schedule her CT scan. And they said, well, madam, we're booking for 2026, we're booking CT scans for 2026. So that shows you. And this is a gal who's educated, from a wealthy family, but while, while private care is illegal in Canada for, for everything, everything is under the single payer system. Her doctor said, but we can get you a CT scan in two to three weeks if you're willing to go private. My friend Brian Day's Camby clinic was shut down by the B.C. supreme Court even though it was doing such great work because it was a private system. So I'm trying to find out how is it that there might be a private alternative, but 2026 versus 22 to three weeks, it's just an incredible number. And these are terrible stories and there's so many stories about how Canadians are being denied care. And so euthanasia is definitely, if you're in a lot of Pain. You might think about it because you don't have access to care and treatment.
[00:22:09] Speaker A: Terrible. All right. Candace Morena says the only decent health care nowadays comes through concierge care. Regular doctors are stymied by forms and regulations limiting personalized care. I use concierge medicine. I don't know if you have any comments on that trend.
[00:22:30] Speaker B: Well, absolutely. And I use concierge medicine, too, because we all believe, Jennifer, in empowering doctors and patients, not the government. Everybody has a third party payer, whether it's the insurance company or the federal government or a state government. Concierge care is a great way to have a relationship with your doctor. Pay a certain amount per month or an annual fee. And your doctor doesn't have a huge practice where you might have to wait, as you were saying, even for a short time, but you can get in right away and it really makes a difference. And I'm hoping that concierge care will continue to grow. We know that young residents coming out of the specialty are now they're not going into young people are not going into private practice. And a lot of older docs, they're not retired, but they're still, they're still practicing, but they're probably in their 50s, early 60s. And they are getting out of medicine because the rules and regulations, mandates are so expensive on their time and they can't practice the medicine that they're trained to do. So they're retiring early. And yet the young docs are not going into private practice. You're seeing this huge consolidation in the hospital market. And so they say if you're a young person, well, I want to have a life. I don't want to work like my dad did, who was a doctor working 24 7. I want to get a set salary. I have debts to pay. And I think this is a very discouraging trend of the move of young doctors going into giant hospital conglomerates and the older doctors retiring because they can't practice the kind of medicine that they've been trained for and that we want and have come to expect in this country.
[00:24:08] Speaker A: All right, a question from Jackson Sinclair on YouTube asking Sally, what are your thoughts on holding pharmaceutical companies and lobbyists accountable when there are laws limiting lawsuits against drug companies?
[00:24:21] Speaker B: Case?
Let's see. Well, I mean, I'm not sure I actually understand the question, but government does need to stay out of the pharmaceutical business. I mean, look what's happening. I mentioned that I'm hoping the Trump administration will work hard to come up with rules, ideas of why we shouldn't have the inflation reduction act, price controls on pharmaceuticals. And we want to get rid of the IRA part on, on drugs through Congress. But you know, look, there are certain things, if you look at you probably, I mean very few people talk about PBMs at their dinner table, but this is the buzzword and it's a bipartisan buzzword. PBMs are pharmaceutical benefit managers. They are the middlemen who negotiate the discounted prices for a drug between the insurer and the drug company. The problem is that they, the, the PBM managers want to keep the drug prices, the list price high so that when it comes time to get a final price it's high so that they will get a better return and they should be giving those savings off to the, the man who turns up at the pharmaceutical counter, not to lining the pockets of themselves and the insurance companies. So there's bipartisan support. People are finally realizing that PBM's a middleman are taking the bulk of the funding and not passing on the savings to consumers. And there are three large PBMs in this country. 80% of the market is controlled by CVS, Caremark Optum, which is a division of UnitedHealthcare and Express Scripts as well. Those are the three big players. And we need to. These PBM people should be paid a set fee and not being, being able to negotiate very high prices so that they can get a better return. So that's one issue. Getting the government getting, getting PBM reform so that the consumer will get the lower price that he deserves. The second thing is on the 340B program, which was a government program which was designed to help small rural hospitals with high, high population of low income patients. But it's been taken away by these huge hospital conglomerates. They are taking advantage of the drug discount program and the funds to help the rural hospitals which, you know, they're oftentimes, it's hard to, you know, if you live in a rural community, there aren't that many doctors, there aren't that many hospitals. But it was designed to help those people in particular and it's not, it's helping the big guys. So we're looking for reform in the, in the 340B program. The other thing is patent protection. You know, drugs are protected for 20 years from when they apply, a drug company applies to the patent office until, for 20 years. And then it comes off and can be copied. A drug can be copied as a generic. 90% of Americans consuming drugs are consuming generic drugs. And they're very, they can be copied completely. They're very, very inexpensive. But, you know, under the aira, the, the idea is that small molecule drugs would be, would have a intellectual property protection for only nine years. And the biologics, which you cannot actually completely copy a biologic because it's a biologic, but you can make a biosimilar, which is similar, but that protection is for 13 years. I would like to see the protection for the pharmaceutical companies, you know, last for 20 years. But it's probably not going to happen unless AIRA is repealed. But, but at least to take the small molecule patent protection from nine years up to 13 years. So those are a few things. And the other thing is Mr. Trump was giving his speech in the Rose Garden today on tariffs and on drugs and things. And I think this is very frightening because if we start, if tariffs will have a negative effect on the research and development innovation of new drugs, and then it'll be like importing price controls from Canada and Europe. And so they will reference a price of the cheapest drug in that country and tie it here and it will destroy our R and D.
So I.
[00:28:32] Speaker A: Had known that it takes many, many years for a company to bring a new drug from the lab through the regulatory approval process.
And as you mentioned earlier, it, it costs billions of dollars. I hadn't been aware that just 12% of drugs that begin clinical trials ultimately receive FDA approval. How would price controls affect that equation?
[00:29:00] Speaker B: Well, it's very frightening because it'll probably take even longer and there will be fewer drugs, though, to be approved. I am very pleased that Marty Makari from Johns Hopkins was confirmed last week as head of the fda. And Jay Bhattacharya, head of the nih. Those are very great appointments. I'm not such a big fan, of course, of Robert F. Kennedy Jr. He promised Mr. Cassidy in the Senate hearing that he would support, you know, vaccination ideas. But as soon as he got into the desk, he has not been, he's saying measles, mumps, rubella can be stopped by vitamin A. And we're seeing a big outbreak in measles. And that, of course, that measles was eradicated years ago by the MMR vaccine. So it's kind of, those are kind of frightening things that the chap that did, Peter Marks, who was head of Operation Warp Speed with the COVID vaccine, he was just removed from his job or voluntarily resigned because he's very upset with what is going on with the, the vaccination program under Robert Kennedy Jr. But what can be done with Marty Makari and the fda, there's a lot that can be done and one thing is the 21st Century Cures act of 2016 had called for the FDA to expedite and modernize its review process. And so I'm hoping under Mr. Makari that this using real world evidence and giving special attention to innovative and emerging areas of research, well, he will actually be able to modernize and expedite this approval process. And secondly, there is a program called the accelerated approval pathway which allows if you are a person who has a very, very severe illness and there's no known cure for it, but there are some treatments in the pipeline, but they haven't received full approval that they could be available to people who, their options are very, very limited. So I'm hoping that he might speed up the accelerated approval pathway and make it permanent so that we will have under the FDA, fewer people working there, but better access and faster approval for a lot of these drugs.
[00:31:22] Speaker A: So the fellow that you just mentioned who had been very involved with Operation Warp Speed for the development of rapid development of the MRNA vaccines, I guess I am not quite as upset about seeing him go. And part of that relates to what I was talking about up at the top. I mean it's one thing to develop this new technology really in record time, but he was also very adamant in terms of recommending this for, for infants and for very young children who had very little risk of having a life threatening reaction to the COVID virus. And I think part of what I was also referencing up at the top was that yes, there's the issue about the higher drug prices, but I think a lot of people are also, there's been some love loss, let's just say with the way that the recommendations and in some cases even mandates within schools that young children would have these things.
[00:32:35] Speaker B: So I think, yeah, well, I mean, as you know Jennifer, I'm totally against mandates. And so, you know, I, we want the market to be open so that these drugs and vaccines and things can be developed. But I am totally against government mandating that you have to get your child or you yourself have to, have to get, get this vaccine. Parents should be able to make these decisions and in conversation with their, their doctor, their pediatrician, because they will know, you know, what the risk is for this. I know in California here there's been, because so many, I think mothers in particular have been listening to Robert Kennedy Jr. Who is not a scientist and not a medical doctor, he is an activist, he's an anti vaxxer, telling Parents don't get your, your baby vaccinated or don't get your child. Well, it's really not up to him. And the issue is that, you know, here in California, whooping cough, which was eradicated as well, is on the rise in several cities in California and it can be a death threat for young children. So, you know, you have to think about where do you live? I mean, what, you know, what are the, what are the risks involved? But certainly not have, you know, government bureaucrats ordering politicians to mandate that this vaccine or this drug has to be taken by you. Let people and families decide that.
[00:33:55] Speaker A: What would you say to those who look at people kind of coming in and out of the fda, sort of a revolving door between people that are regulating and approving these drugs and then going to actually work for the pharmaceutical companies? What do you think there are any concerns that you see as legitimate with regards to agency capture, people that are supposed to be regulating these companies actually hoping to curry favor with them in potential future employment?
[00:34:31] Speaker B: Well, I mean, we've seen a lot of people since the Trump administration and since Mr. Kennedy was confirmed as secretary of HHS actually leave the fda, not counting the people who are losing their jobs. And a lot of that has to do with the bloated size of government in this country, which a lot of it is probably a good thing. There's a lot of duplication of efforts and things. So I'm glad there is reduction Doge, you know, the Department of Government Efficiency, which I guess Mr. Musk is stepping down from, but it's very effective in, I mean, they've been very effective in finding out a fraud and abuse in Medicare and Medicaid to big government programs. But I think, you know, if people, I mean, I've never worked for government and no government would ever probably hire me. So it's not a threat. But I think that if you're working for the FDA and you have an opportunity to go into the private sector and do further work on what you have been working on and you'd like to see, I mean, that is totally, you know, a great idea. And then in the same way that people in the private industry have been joining the administration and so that they, they want to see good things happen so that we, you know, we have the benefit of these drugs that aren't available or treatments that aren't available in countries like France and Germany and Canada today. So I think, you know, it's a, it's a two way street, but let people decide what is best for them. But I, I just don't think you can. You can. You. Most people, I think if they leave FDA or they leave private industry, they think they're going to add to, they'll have a comparative advantage to add to making our, our health system better.
[00:36:06] Speaker A: So now, this is not something that you covered in your book, but just out of curiosity, how do you think that AI, artificial intelligence, might change the development and testing of new drugs?
[00:36:19] Speaker B: I know it's something, I'm of an age where AI scares me, it's too complicated. But I have been getting a lot of emails from people who've read my work and say, well, I have an AI, whatever it is scenario where I will be able to tell immediately whether this, a new drug is going to work and whether it's, it's, it should be approved or whatever. So I think it's all very interesting and I think, you know, Bill Gates was right the other day when he said AI is going to change the structure of our society because a lot of people who are in jobs that, you know or whether you're a lawyer doing research and what you're your partner wants work done. Research work done. AI is going to take over a lot of the, of the work in the legal profession, in many professions and including in, in medicine because, you know, it will help, it will help doctors, you know, see more and be able to figure out what the issue might be. But I don't want, I hope that doctors wouldn't completely depend on AI because it's not going to be foolproof. And, and you have to really meet the patient and get a feel for, you know, what, you know, how that patient is, what mental state they're in. And I think it's important, but I think AI is going to play a big role in the coming years in helping to identify what conditions patients have and also in the research and development of new treatments, of which we need more as we try to live longer and healthier lives and particularly with, you know, in between 1992 and 2023, the cancer death rate in this country fell by 33%, whereas in the UK it only fell by 19%. So we want to continue to increase life expectancy. We want to continue to develop these things so that, like I mentioned earlier, the vaccines for various incurable forms of cancer really, that we have access to them. And so I think it's very, very important.
[00:38:25] Speaker A: So we were talking earlier about the Trump administration and your hopes with regards to its policies on the pharmaceutical development and approval process. One constant theme with President Trump is his frustration with how he sees other countries taking advantage of the United States, rightly or wrongly, whether it's the funding of NATO or asymmetrical trade policies or the funding of Ukraine's defense. Do you see a similar dynamic at play with regards to American investments in drug innovations in a way that actually subsidizes other markets that impose price controls?
[00:39:07] Speaker B: I just had a piece up today on Newsweek, and I had a piece last week in Forbes on this very issue. There's no question that other countries, as we talked about earlier, that have price controls are free riding off the research and development of pharmaceuticals in this country. And so once the main cost has been covered for the R D, pharmaceutical companies sell drugs at a discounted price to Canada and the UK and these guys are free riding off our R and D and we are paying for it. So the best scenario would be for these countries to get rid of price controls and they pay their, their share of what for for the drugs. It probably, you know, I've been talking about getting other countries to get rid of price controls for many years, but they love their price controls and they have access at the discounted price. One of the things that concerns me is a week ago Friday, the America First Policy Institute came out and they said, they rightly so. They said, you know, this freeloading is not a good thing. It's harmful. But their solution is a bad solution. They're talking about bringing in the most favored nation clause, which would mean that under mfn, prices for drugs under on Medicare to start would be tied to the lowest price in some of these countries with price control. So if a drug in England or in Italy is very, very inexpensive, our drugs would be tied to that price, which would then have a very negative impact on the development of new drugs. So it's really importing price controls through the back door through the most favored nation clause. So this is not a good idea. We need to encourage free trade agreements between countries that we do business with, not impose tariffs. Because as you know, Jennifer, tariffs lead to price increases on consumers. They will lower GDP and they in the drug industry, they will lower access to these wonderful new drugs. So we don't want what we call reference pricing, the government to introduce reference pricing, tying the reference to a country with lower prices that wouldn't have those drugs if it weren't for us.
[00:41:17] Speaker A: Speaking of pricing, my modern Gault has an interesting question. He says, why is it that when I, that I can see the price of my groceries before I buy them, but medical costs are often hidden away and not publicly available.
[00:41:32] Speaker B: Right. And so the Trump administration has. Well, I can't remember what year it was. Maybe five years ago, there was a bill passed into law about price transparency that all hospitals were supposed to, over a certain size, were supposed to post their prices. So that if I need, you know, an appendicitis, I'd be able to find out what at this hospital at Huntington Memorial would be this, at Glendale Seventh Adventist, it would be that. At ucla, it would be this. And. But very few hospitals have actually, you know, followed the rule of the law. Instead, they'd rather pay the fines. Mr. Trump has again come out and said that we need price transparency, and he's going to make it even, you know, more difficult for these hospitals to avoid it. I think, you know, we know what we pay for, you know, for groceries, what we pay for insurance, for cars, for every single item. Why are the two industries that are so controlled by government, the education, the K12 education system, and healthcare in this country, we have to have price transparencies because that will open up the market, and when there's competition, as you know, prices will come down. So I'm a huge fan of that. I'm also a huge fan of telehealth. Telehealth would never have come in in this country if it weren't for the. The pandemic. And particularly telehealth is particularly good for people, older people who maybe can't get out or they live in a rural community. It's very hard to get to a doctor, to a hospital. So I'm hoping that this, the telehealth bill that's up before Congress will actually be passed into law. It's another way to reduce cost. It's another way for doctors to have more time with patients who are ill. And it saves so much time and gives patients the chance to find out what it is is wrong with them without having to wait a long time or try to get into a doctor. So telehealth, price transparency are two very important initiatives for bringing down the costs of our health care in this country.
[00:43:36] Speaker A: All right, Joker's Wild on YouTube asks, Is it true that big pharmaceutical companies suppress the cure for certain diseases in order to make a profit from the drug used to treat patients? That sounds implausible to me.
I think any pharmaceutical company that would find the cure for a cancer or whatever would be reaping the financial benefits many years and decades to come. But, Sally, any reaction to that question?
[00:44:05] Speaker B: Right. So, you know, I mean, there's all These, there are things, it's called off label use. And so when a company develops a drug, it, you know, it's under patent protection and then it comes off and a generic is copied. But while under patent protection, we are finding more and more off label uses. I mean, even if you look at the new weight loss drugs, wegovy, Ozempic, these drugs, they're finding now that not only are people, you know, losing weight, but it has a very positive impact on their health because, you know, diabetes is a big outcome from, from obesity. There have so diabetes, heart problems. So those are things that are really, you know, these drugs, when you get a new, an off label use for something, I mean it used to, when, when the drug for Botox came out that was for reducing wrinkles on your face. But then they found that in an off label use it was very, very good for people with, with eye diseases, with macular degeneration and things. So there's so many cases of where a drug is developed for a certain ailment, but then they then researchers try it on other diseases and find out that it's actually very effective for cancers and other diabetes, heart failure, stroke and things like that. So we want to keep this pipeline open so that, you know, off label uses, you know, research into other uses for a particular drug are very, very important.
[00:45:36] Speaker A: So I'm sure you are all over this story. Citing recent cuts by the Trump administration. Last week, California lawmakers would give the state a new government agency that would serve as its own version, the NIH. This is @ a time when the state is running a $55 billion budget deficit. It's news like this that do not make me overly optimistic about California's future. What's your take?
[00:46:07] Speaker B: We say here, Jennifer, because we love the weather. So. Yes. No, I mean, there's so many things. I mean, you know, California Governor Newsom allowed illegal immigrants to be, to be able to get Medi Cal, which is the state's version of Medicaid. And so it's, it's added about 3, $3 billion to the deficit. It's very expensive. And so, you know, we really, he should not have done that because we're in this big deficit situation. As you mentioned, we can't afford to be providing, you know, free care to illegals in California. And he tried the whole idea of doing this. As you mentioned, he signed into law a bill where California would set up its own research facility for making drugs. And nothing has happened with that. And when you look at, you know, once drugs as they say are off patent. The price comes way down. They can't compete with that. And it would be very, very expensive. And it's a terrible idea. I just saw the other day that someone has a potential initiative for the California ballot in 2026 which would outlaw any denials and any delays in getting a procedure done. So another terrible example of taking the market out of health care and putting government more and more in control. And these are all moves that sort of slowly would move the state and other states too towards a single payer healthcare system. And you know, the, there are the nurses decided not to back and reintroduce, have an assembly or senate, state senator introduce a single payer initiative this year, which maybe they realize that the cost when it's more than twice the actual full budget of the state of California. This is not a good time when we have deficits and people are kind of upset with all of this government intrusion. But it'll be back for sure. But a lot of these things are, instead of doing a polis bolus, you know, move to single payer. They're trying all these, you know, price controls, owning your own, the government having its own pharmacy, the government saying no one can deny an insurer, cannot deny a procedure or delay someone getting their procedure. These are all things that are part of the big government takeover of our society, which I moved to this country to get away from big government. And then slowly we have to keep putting our finger in the, in the dike to educate Americans. There's so much, so much information that the man on the street does not understand. Health care is very complicated. Very few politicians, as you know, want to talk about health care because, because it's complicated.
[00:48:51] Speaker A: Well, of course, you came to America from Canada seeking greater freedom. Ayn Rand did as well as you might imagine. This is an audience that is very interested in Ayn Rand. The Atlas Society is the leading non profit engaging new audiences with her ideas. Just wondering if you've read any Ayn Rand or have any Ayn Rand stories of your own.
[00:49:13] Speaker B: Oh yes. When I worked at the Fraser Institute, we hired a young professor named Walter Block, who had been a member of Ayn Rand's inner circle in New York. And so we watched, you know, the mo. The movies and we read Cap. Was it capitalism, an unknown ideal. I remember reading that when I was very young. Walter was a great libertarian and follower of Ayn Rand and Alan Greenspan, you know, who was chairman of the Fed for many years. He was a huge, he was part of an Iran's inner circle and he actually came from Winnipeg, Manitoba, and I think his wife was from Manitoba as well. So a lot of the great exit from Canada, even a long time ago to the US And Ayn Rand was a major influencer of Walter Block and of myself. And of course it's great, Jennifer, that you have the Atlas Society that so these ideas can continue to be out there and to educate people on, you know, what she stood for and what libertarianism, objectivism is all about.
[00:50:17] Speaker A: Well, when we ultimately do an animated full length feature film of Atlas Shrugged, I'm going to make sure that along with all of the other strikers that end up at G, we're going to have to add a visionary scientist who has started his own pharmaceutical company and is now coming out with all of these great drugs. So as mentioned, all of these tabs in Sally's book, the World's Medicine Chest, we've covered a lot of topics in the past hour or so. But Sally, any points from the book that we may have missed that you wanted to close with?
[00:50:57] Speaker B: I just, there's so many things in there and there's so much, you know, we could talk for hours. But I just want to make sure that people understand, you know, where, you know, why America achieved pharmaceutical supremacy and why we need to keep it because there's no other country. Where is the R and D going to happen if the government in this country and state governments take over R and D through price controls? It's going to be a disaster. And we all want to live longer and healthier lives and certainly don't want to be having euthanasia as the, as the result for you because you can't get access to the latest drugs and the healthcare system has long wait. So, yeah, we want the world's medicine chest to continue to be in this country and for us all to have access to the latest in development.
[00:51:49] Speaker A: So, Sally, maybe to close. You have been running the Pacific research institute since 1991. Tell us a little bit about the work there and how people can get involved. I'll let people know. They put on terrific events. I always try to get to them whether they are in Orange county or up in the Bay Area. But tell us a little bit about the work and the focus of various foci at PRI.
[00:52:20] Speaker B: Well, thank you, Jennifer. Yeah, PRI was founded in 1979 by Sir Anthony Fisher, who founded the Institute for Economic affairs in London. He helped found the get the Fraser Institute in Canada, started British Columbia, had a socialist government for the first time. So he was very helpful and Getting Fraser Institute started, that's where I started my career.
So now pri is 46 years old this, this year and I've been running it for, will be 34 years on 1st October. We work to promote limited government, private property rights and freedom and we work in several areas. I run the healthcare space but we do a lot of work on educational choice, charter schools, putting parents in charge of their children's health education. We do a lot of work on energy, environmental issues, trying to get the government out of this and, and, and allow the market to work. Chris Wright, who is now the Secretary of Energy was on our board for many years. A lot of great work on, on the energy sector and why, you know, we want to be able to do fracking and, and get a lot of oil and gas to market. We also do a lot of work on California issues. We produced a study called the Left California Survival Guide west coast looking at the Left coast. So that's a very good sort of summary of all the horrible things. California used to be the Golden State. Everyone came here but now the gold has gone out of the Golden State and we don't want other states copying the bad things that have happened here. So California tax policy, environmental policy, education, healthcare are big issues. And as I say, we were started in 1979 and we've got, we're just pounding away both mainly at national issues but also at the state level because there's so many terrible things that have been happening in California in the last few years.
[00:54:25] Speaker A: Fantastic.
[00:54:26] Speaker B: Is www.pacificresearch.org fantastic.
[00:54:31] Speaker A: Well, again it's a wonderful organization. So everyone, I do urge you to check it out and thank you again. Sally want to highly recommend her book the World's Medicine Chest How America Achieved Pharmaceutical Supremacy and How to Keep it Very important and very timely. So please check it.
[00:54:51] Speaker B: Thank and see you soon. Yeah.
[00:54:54] Speaker A: Yes, absolutely. And I want to thank everybody who joined. Thanks for all of the great and sometimes challenging questions. We appreciate that. I am next week. I am actually taking the first vacation in five years. So my colleague is Dora Kolar.
She's the strategy director at the Atlas Society. She is going to be interviewing Steven Sokop about his book the Dictatorship of Woke Capital How Political Correctness Captured Big Business. So check that out. One final pitch. We are going to be in Austin, Texas June 5th through 7th for our third annual Galt's Gulch. If you are a young person or have a young person in your life that would be interested in a scholarship, we still have some available so please go out and check that out on our website. And if you're a donor and you need a shot of optimism, come and help mentor and network with these 150 young people. We're going to be gathering from across the country and around the world. I'd love to see you there. A lot of you are kind of weekly attendees, and I feel like I've gotten to know you virtually. That would be great to meet you in person, too. So thanks.
[00:56:12] Speaker B: Thank you, Jennifer.
[00:56:13] Speaker A: Absolutely.
