Truth Podcast - Vivek Ramaswamy - The FDA Has Blood on its Hands? | Balaji Srinivasan | TRUTH Podcast #59

00:00:00.000 All right, I've been looking forward to this conversation for a while.

00:00:03.000 This is a conversation with a guy who I first heard of when he was rumored to be in the running for head of the FDA under Trump in his first term, which caught my attention because I was in biotech back then.

00:00:16.000 And the more I got to know about him, the more I realized that we had some similarities in not only our backgrounds, but our paths and some of our interests, even if we have different views at times.

00:00:26.000 Balaji Srinivasan, welcome to the podcast, man.

00:00:30.000 Good to be here, Vic.

00:00:31.000 So I think this will be the longest, certainly the longest conversation we've had.

00:00:34.000 We've only started really speaking even over the course of the last year or year and a half.

00:00:39.000 But I've known about you indirectly through folks in Silicon Valley, all of whom point to you as some type of Oracle figure, which got me intrigued by you.

00:00:48.000 But Tell me what got you, you know, potentially, at least whether you were considering it or not, I don't know, although I'd be interested, were you actually considering being head of the FDA? But what got you to the point of even being in the running to be head of the FDA? And more generally, maybe a little bit of background for the listeners who may not be as familiar with your background as most of Silicon Valley is.

00:01:08.000 Sure.

00:01:09.000 So, you know, first I want to say, game recognized game.

00:01:12.000 I think there's a lot of mutual respect between us.

00:01:15.000 I actually think we have very similar backgrounds.

00:01:17.000 I think both, you know, born to Indian immigrant parents who, you know, believe in the American dream.

00:01:25.000 You know, I went to the West Coast.

00:01:27.000 I think you went to school on the East Coast.

00:01:30.000 Also actually had a biotech background.

00:01:33.000 Very briefly, I got my BS, MS, PhD at Stanford in electrical engineering, MS in chemical engineering.

00:01:38.000 Then I taught computer science and stats there for a few years with a specialty in computational genomics and bioinformatics.

00:01:45.000 Founded a genomics company, like genome sequencing, like clinical genomics.

00:01:50.000 Teal actually was an investor through Founders Fund, and so that's how I got to know them.

00:01:55.000 That was later sold for $375 million.

00:01:58.000 I became an angel investor, early investor in a lot of biotech, but also crypto and other software stuff.

00:02:06.000 Also even actually government innovation, OpenGov.

00:02:09.000 I'm not sure if you know that that was recently sold for a few billion dollars.

00:02:12.000 I became a partner at Anderson Horwitz, largest VC firm in the world.

00:02:16.000 Then CTO of Coinbase, largest American crypto exchange.

00:02:19.000 I didn't know you were the CTO of Coinbase.

00:02:22.000 Oh, yeah.

00:02:23.000 Oh, wow.

00:02:24.000 Interesting.

00:02:25.000 So did a few things.

00:02:27.000 And then most recently, bestselling author and Twitter personality.

00:02:31.000 And so very similar career track to you, actually, in many ways.

00:02:34.000 Also finance, biotech, authoring, social media, and in a sense, politics, but from the same Indian immigrant background.

00:02:43.000 But parallel paths with you, I think, slightly more of an East Coast institutionalist path and maybe more of a West Coast path, but with a lot of similarities.

00:02:51.000 Yeah, cool.

00:02:51.000 And your parents, what did they do when they came to this country, actually?

00:02:54.000 It was interesting to trace that back.

00:02:55.000 Physicians.

00:02:56.000 Both of them?

00:02:57.000 Yeah.

00:02:58.000 Cool.

00:02:59.000 So anyway.

00:03:00.000 My father grew up in a very poor village and so on and so forth and so came out to the U.S. for opportunities.

00:03:04.000 So that was a big part of it.

00:03:05.000 We definitely share that in common.

00:03:08.000 My father was from a rural village in Kerala, southern India, probably not far from where your father came from.

00:03:14.000 Not far from mine.

00:03:15.000 Judging from your last name.

00:03:16.000 Yes, we're from Tamil Nadu, but basically nearby.

00:03:22.000 Were you considering actually becoming the head of the FDA? Was that actually a serious thing?

00:03:29.000 So the context of that was, so I had that biotech background, right?

00:03:35.000 But I'd also actually written a bunch of lectures.

00:03:39.000 I taught a class in 2013, actually.

00:03:42.000 Here, I'll put up the URL. And there was some good stuff in it.

00:03:48.000 Basically, part of it was a Bitcoin crowdfunding site.

00:03:53.000 And that was actually relatively early in cryptocurrency.

00:03:55.000 It was 2013 when Bitcoin is in single digits.

00:03:57.000 But another huge part of it was about the regulatory state.

00:04:00.000 Because even back then, I taught this with my friend Vijay Pandey, who later became the head of A6 and ZBio.

00:04:08.000 I recruited him there.

00:04:10.000 And that's like a multi-billion dollar thing that invests in a lot of biotech stuff.

00:04:14.000 And so we had an interest in basically educating people from around the world for free.

00:04:21.000 And one of the things that I learned in my time in biotech, and you also, I'm sure, learned this, is the degree to which the regulatory state holds back innovation.

00:04:30.000 And that understates it, right?

00:04:36.000 You know, ratios in terms of cost, in terms of the quality of healthcare people could get.

00:04:41.000 People don't understand the scale of it, right?

00:04:44.000 I can show graphs like this thing called Arum's Law that you might be familiar with.

00:04:47.000 Do you know what that is?

00:04:48.000 Have you heard that term?

00:04:49.000 Arum's Law?

00:04:49.000 Oh, okay.

00:04:50.000 So Arum's Law is this amazing graph which shows that basically the cost- Oh, it's like the backwards of Moore's Law.

00:04:59.000 Yeah, yeah, yeah.

00:05:01.000 That's right.

00:05:02.000 And it shows that despite all the technological progress we've had in computers, some force has been not just holding it back, but reversing it in drug development, which is part of the reason that drugs have gotten so expensive.

00:05:16.000 Irem's law is Moore's law spelled backwards.

00:05:19.000 If you go and search that, you'll see that the cost of drug development has actually increased by multiple version of magnitude, like more than 1000x since the advent of the FDA. Sure.

00:05:29.000 Which is part of the reason that everything is so expensive.

00:05:32.000 That's just one very quantifiable metric, but lots of other things in healthcare have just risen through the roof.

00:05:36.000 At the same time, you know, the cost of all the information is dropped to the floor.

00:05:40.000 Something is broken there.

00:05:42.000 And I can, you know, get into all the details, but net-net is, I wrote a series of lectures at the Stanford course at 250,000 students, and it was online.

00:05:52.000 And a bunch of venture capitalists saw it, like Keith Raboy saw it, and, you know, at Founders Fund, and other folks who are mutual friends of ours.

00:06:00.000 And I think, you know, other folks, founders, including Teal, saw it.

00:06:04.000 And so basically all of that, plus the fact that I actually built a biotech company, was what led to the whole FDA thing in late 2016. And the thing is, I was at the time turning around a crypto company and, you know, I had a loyalty to my investors and people there.

00:06:21.000 I eventually successfully turned around and sold it to Coinbase.

00:06:24.000 And so, uh, the call from Teal, uh, came in, in late 2016, like December, 2016. And so, uh, you know, net net without, you know, I don't want to like quote kiss and tell or whatever, but yeah, net net, you know, I've, I've, I could have been number two at FDA. It was offered deputy commissioner.

00:06:44.000 Uh, but I ultimately decided not to do that.

00:06:47.000 And, um, For a variety of reasons, but I think that gets back to, you know, you and I have a lot of similarities, but I think I'm on the margins, I'm more Mr. Outside and you're more Mr. Inside, which is fine.

00:07:02.000 They're complementary strategies, right?

00:07:05.000 You kind of need both, like, you know, for example, Google couldn't have reformed Microsoft by, you know, having Sergey and Larry join Microsoft at the beginning, but by building something amazing on the outside, they sort of force Microsoft to reform.

00:07:18.000 Yeah.

00:07:18.000 Well, I'll say even in a national sense, I mean, you're talking to me from Singapore, right?

00:07:23.000 And I think you're very much a pro-nation person and you're more of a post-nation person.

00:07:29.000 We should talk about that.

00:07:31.000 Yes.

00:07:32.000 Absolutely.

00:07:32.000 You know, which we'll actually come back to.

00:07:33.000 Just on the FDA piece of this, because this is actually related, there's just a couple of things going on in the news that are actually relevant to things that...

00:07:40.000 You and I are talking about right now.

00:07:41.000 There was a recent FDA rejection of a therapy that had achieved, on its own self-described terms, two successful phase three studies, an MDMA-based therapy for a condition known as, of course, PTSD, you'll be familiar, post-traumatic stress disorder.

00:07:59.000 And they went through and they designed the phase three trials exactly as it appears the FDA told them to design the trials.

00:08:06.000 But it came before, and it relates to exactly the rise of bureaucracy, one of these things that's called an advisory committee.

00:08:14.000 The FDA frequently holds these advisory committees where they have experts that supposedly opine on the data and tell them, you know, what they should or shouldn't do.

00:08:21.000 The FDA is not bound by their recommendations, usually follows them, sometimes doesn't.

00:08:25.000 Interesting as well.

00:08:26.000 Now, in my experience, and I've seen the industry evolve for a long time, I was a biotech investor, as you know, I built companies in the industry.

00:08:35.000 What the IFTIA actually does is they'll often just use these advisory committees as a cover for what they otherwise want to do.

00:08:44.000 To do what they actually want to do.

00:08:44.000 Yeah, to do what they actually want to do.

00:08:46.000 And the whole thing is stacked from the beginning.

00:08:48.000 So I'm a big believer in being driven by hard facts.

00:08:51.000 I have sat in the Hilton Hotel in places like Maryland in the middle of nowhere outside of Washington, D.C. for...

00:09:01.000 Eight-hour versions of these.

00:09:03.000 I'd be sitting in the front row of these advisory committees taking detailed notes.

00:09:06.000 I mean, that was the level in which I was immersed in this industry.

00:09:09.000 And so I did not do that admittedly for this most recent advisory committee.

00:09:12.000 But it smells a lot like a situation where the FDA served up what they call their briefing document to the advisory committee, which the advisory committee then opines on.

00:09:20.000 Think of themselves as a bunch of experts who are actually just being wielded as pawns by the FDA. I've seen that happen before.

00:09:26.000 And it smells like a situation where that might have happened here, where the advisory committee then recommended against the approval of this drug, which is exactly what the FDA came around to do.

00:09:34.000 I view that as a bit of a travesty for a number of reasons.

00:09:37.000 First of all, there's patients suffering from PTSD with very few options.

00:09:41.000 But the basis for denying this approval was particularly fascinating biology.

00:09:45.000 And you'll be at a level where you can easily follow this.

00:09:50.000 So they say the trial was functionally unblinded.

00:09:54.000 So usually the way you're supposed to do this is you have placebo, you have the drug, patients don't know which one you're getting so that the therapeutic effect is actually a real effect rather than a placebo effect where the patient believes they're getting the drug but they're not actually getting the drug, they're getting placebo.

00:10:09.000 If they're blinded, the patient doesn't know which one.

00:10:11.000 And then you look at the trial, the end of the trial, what they call the end point.

00:10:14.000 That's the time at which the final measures are taken and see how the drug could perform relative to placebo.

00:10:20.000 The FDA claimed here that actually the patients knew whether they were on drug or placebo, but not because the trial was misconducted, but because certain of the patients experienced euphoria, which is a side effect, so-called side effect, at least of MDMA-based therapy.

00:10:38.000 And therefore, patients would know whether they were on drug or placebo and therefore could have a placebo effect that could have driven their treatment of PTSD, completely ignoring the possibility that the euphoria was part of the very mechanistic behavior of the drug that might have had an impact on actually treating PTSD itself.

00:10:55.000 which is part of the hypothesis in the first place of using an MDMA-based therapy for the treatment of PTSD. And worst of all, the FDA would have predicted this.

00:11:04.000 Anybody knowledgeable at the FDA around the development of this program would have known that was going to be a side effect of an MDMA-based therapy for PTSD before they agreed on a Phase III protocol that, to your point on Eroom's Law, added tens, if not hundreds of millions of dollars in development costs to a program like this one.

00:11:23.000 And yet, all the public reads, I read the articles on this, even the so-called scientific press, which at least in the world of biotech is a joke, actually just reports this saying that there were certain trial irregularities because it's just a functional, it was an unblinding issue.

00:11:37.000 So it's not an issue relating to costs and benefits of the therapy, but it's just that the trial might have been unblinded along the way, as though there was somebody who was actually peeking behind the veil and telling patients whether they were on drug or placebo.

00:11:50.000 That's what the public is left with, without knowing that this alleged unblinding was a functional unblinding relating to the actual therapeutic properties of the investigational drug, which the FDA knew about and signed off on before they got cold feet and probably served up to an advisory committee, a bunch of briefing documents that got that committee to be the ones that said, hey, it's just the experts that told us we shouldn't approve this, therefore we're not.

00:12:13.000 A lot of detail there, but it does lift the curtain on how this bureaucratic machine operates.

00:12:19.000 And that's also just a really long way of saying Dude, I'm pretty pissed at you for not taking that job as Deputy Commissioner, okay?

00:12:27.000 Because we need people who are willing to cut through that otherwise smoke of bureaucratic techno-talk, which is actually just a normative agenda, often masquerading in the guise of technocracy and scientific expertise.

00:12:44.000 And I just think this, I think it was Lycos therapeutic.

00:12:46.000 I have no connection to that company, no vested interest in it.

00:12:49.000 Actually, I think that if J&J, by the way, which got S-ketamine approved for depression, the ketamine derivative for ketamine, really, ketamine period, basically.

00:13:00.000 S-ketamine is just one of the enantiomers of ketamine.

00:13:03.000 They got it approved for depression on far thinner data than I believe this company had for its MDMA-based therapy for...

00:13:12.000 For PTSD, if this had been J&J, likely the same sponsor, playing the managerial game the way that larger pharma companies do, I have high degree of confidence that this would be an approved drug right now, but it's not.

00:13:23.000 But anyway, a little bit of a rant on the news of the week, and I just shared the details because I know you weren't necessarily following this particular case.

00:13:30.000 But I thought it's an interesting validation, as you see on an almost monthly basis with the FDA, of this unelected bureaucracy impeding innovation and really foisting cost onto a healthcare system that actually could use a step in the other direction rather than in the direction that drives up more health cost.

00:13:52.000 First of all, I love this.

00:13:54.000 And we should probably do, like, how much time you got?

00:13:57.000 We should do a biotech podcast or something at some point because I actually feel we could kind of, okay, knock the ball back and forth for hours and hours.

00:14:06.000 But let me give a quick version.

00:14:08.000 And the public deserves to know it.

00:14:09.000 Absolutely.

00:14:10.000 Because it's not just technical mumbo-jumbo talk.

00:14:12.000 It's in the details that you actually see how corrupt the system really is.

00:14:17.000 Absolutely.

00:14:17.000 And I actually think, you know, if we, I don't know, if we prepared and we did 20 hours on this and went through a bunch of issues with your knowledge on the therapeutic side and maybe mine on the other side.

00:14:30.000 But let me give my quick reactions on this specific, right?

00:14:33.000 Okay.

00:14:34.000 So there's kind of like three sort of separate prongs there, okay?

00:14:37.000 There's like FDA's behavior itself, just what it is as an organization.

00:14:43.000 There's how we should test drugs in the abstract if FDA didn't exist.

00:14:50.000 And then there's also, like, what the, you know, whether I should have taken the thing in 2016 and what have you, right?

00:14:58.000 Let me deal with these in, you know, just different order, right?

00:15:02.000 So, you know, have you ever had, you know, this area of...

00:15:05.000 You've got a jar of peanut butter, and you unscrew it a bit, but you can't fully open it, but you hand it to someone else, and you loosened it for them, and it's like a relay race or what have you, or vice versa.

00:15:17.000 So I think, for example, in World War II, the Americans versus the Japanese, there's an island hopping campaign where they took certain islands in a particular sequence, and they couldn't have just gone straight to the home islands.

00:15:29.000 They had to do them in a certain order.

00:15:31.000 In the same way, I don't believe that a frontal assault on FDA in 2016 would have been feasible.

00:15:37.000 I think the entire country and world had to go through the last eight years.

00:15:43.000 And what happened over that time?

00:15:45.000 Well, first, there was the true build-out of social media and then Elon taking over X, which actually gave a media that's upstream of FDA and actually can do investigations into FDA, which is completely new.

00:15:57.000 That's within the last two years, and it's still having its consequences being felt.

00:16:00.000 Number two is I think you had to have many people in technology and finance both make billions of dollars in regulated spaces, specifically Uber, Airbnb, crypto, fintech, right?

00:16:14.000 And to some extent biotech.

00:16:17.000 more billions of dollars thwarted and destroyed by arbitrary acts of regulators which gave a financial interest both upside and downside for really paying attention to the details of regulation whereas before 2010 it was really taboo to even question whether a regulator could be bad right third you had to see i think um you know i almost i gave a talk 10 years ago where i identified And I think it started with local digital.

00:16:47.000 For example, Google going after Google News and various establishment strongholds getting disrupted, local digital.

00:16:54.000 Then you have local physical, which is Uber versus taxi regulations, Airbnb versus hotel regulations, is going after physical things, taxis and hotels, but they're locally regulated.

00:17:05.000 Then you have federal digital, which is crypto, Bitcoin versus the SEC, right?

00:17:11.000 And that's an ongoing battle now.

00:17:12.000 And then after that is won, and we're on the cusp of winning that, hopefully, knock on wood, in some ways we have won parts of it where, you know, Bitcoin ETF has been approved, ETF has been approved.

00:17:23.000 Even Kamala Harris is signaling Harris for crypto.

00:17:26.000 Even though that's a lie, right?

00:17:28.000 That is the, gosh, there's a saying, the tribute that Vice pays to virtue, right?

00:17:35.000 Yep, exactly.

00:17:37.000 That shows that at least they have to give lip service to it in the same way the Democratic People's Republic of North Korea has to pretend it's democratic, right?

00:17:43.000 Understood.

00:17:43.000 Okay, right.

00:17:44.000 And so then- It's a marker of, at least, it's a milestone.

00:17:47.000 It's a milestone.

00:17:48.000 It's a milestone.

00:17:49.000 At least they need to fake it.

00:17:50.000 You know, they know that they can't declare anti-crypto army because that's a vote and money loser for them.

00:17:55.000 Okay.

00:17:56.000 So then the next level, and we're also fighting that, by the way, on social media.

00:17:59.000 So the federal digital is versus the AI ban.

00:18:03.000 It's on the social media bans.

00:18:04.000 These are new regulatory agencies are trying to stand up, right?

00:18:07.000 And the final frontier is federal physical.

00:18:10.000 And I think actually drugs will come first and then energy and transportation are the very hardest and they're last.

00:18:15.000 And the reason for that is drugs can be, you know, food, drugs, biotech, that can be reduced to individual, my body, my choice type arguments, right?

00:18:23.000 Whereas But the energy and transportation, if it blows up, then it affects people in an area.

00:18:30.000 So you need to actually...

00:18:31.000 Let's just start with the My Body, My Choice, right?

00:18:33.000 Yeah, sure.

00:18:34.000 In some ways, this externality effect or the effects on other people is a confounding variable that they use as a smokescreen to justify something that obviously they were doing anyway, because the My Body, My Choice is...

00:18:47.000 It's very selectively applied.

00:18:48.000 My Body, My Choice is...

00:18:50.000 Go ahead.

00:18:50.000 Yeah.

00:18:51.000 It's first order, right?

00:18:52.000 So that's an easy place to smoke out what I think is going on here.

00:18:56.000 It's a kind of...

00:18:57.000 So here's what...

00:18:58.000 Let's just use the FD as a case study example.

00:19:00.000 It wasn't exactly what I was planning to go deep with you on today, but it doesn't matter.

00:19:03.000 We can talk again another time and go deep on this today.

00:19:06.000 So I think people miss this, who share our antipathy towards the administrative state.

00:19:14.000 Miss the culture of that administrative state at the FDA. The people at the FDA do not believe they are there to exert surreptitious harm on the everyday citizen.

00:19:26.000 In fact, it's the opposite of that.

00:19:27.000 They believe that they are there to care for everyday citizens in ways that people could not be trusted to on their own.

00:19:35.000 It is a form of the nanny state. 0.90

00:19:38.000 And in part, we get into these discussions about the nanny state.

00:19:41.000 We're usually talking about the entitlement state, the LBJ, post-LBJ great society, the welfare state.

00:19:47.000 Payments to individuals for welfare and Medicare.

00:19:50.000 That's what people usually think about when they mean the nanny state.

00:19:53.000 And that is certainly an important nanny state that I believe needs to be over the long run dismantled in the United States.

00:19:58.000 But the regulatory state is actually a subset of the nanny state as well, designed to limit the choices that individuals are able to make, not for even the benefit of the government or the governmental actors who implement it, but for the supposed benefit of the very people who are being limited.

00:20:17.000 In the choices that they're able to make.

00:20:20.000 That's, I think, the conceit at the heart of the regulatory state.

00:20:24.000 And so, you know, you laid out a path and I think what I call A series of elegant excuses, which may be grounded in truth, of why we couldn't have begun the full frontal assault on that.

00:20:35.000 I've got more.

00:20:36.000 But get to the full frontal assault.

00:20:38.000 Okay, you laid the grad work and the reasons why we haven't done it so far.

00:20:42.000 But how do we actually dismantle this beast?

00:20:45.000 Excellent question.

00:20:45.000 And where are we in the island hopping?

00:20:47.000 Excellent question.

00:20:48.000 So, I do believe in 2024 it is now feasible to do it, okay?

00:20:54.000 Thank you.

00:20:55.000 That's the part I want to get to.

00:20:56.000 Yes.

00:20:56.000 How do we do it, right?

00:20:58.000 So the most important thing, I think, is, you know, Ron Paul wrote a book, End the Fed.

00:21:03.000 And I love Ron Paul, and that's a great book.

00:21:05.000 But it wasn't feasible to just end the Fed.

00:21:08.000 You also needed to invent Bitcoin.

00:21:11.000 Because you need to have an alternative that was a technologically, socially, you know, incentive aligned, better alternative that got enough people to its banner under many circumstances to actually fight and replace the existing system.

00:21:26.000 And I think that is the big thing that the technologist worldview, the founder worldview has that the conservative worldview usually doesn't, which is you actually have to somehow build the alternative and then replace the existing system.

00:21:41.000 And, for example, as hard as that is, even for a government agency, Elon built SpaceX and he's essentially replaced NASA, right?

00:21:49.000 And so, to your point, and then let me get to the strategy on it.

00:21:54.000 One of the things I talked about in this lecture from 10 years ago is FDA, and, you know, they omit the the, right?

00:22:01.000 They don't call themselves the FDA. They call themselves FDA, right?

00:22:03.000 FDA. FDA. It's actually one of these, like, obnoxious even conceits and tics.

00:22:08.000 Yeah, it's just...

00:22:09.000 It's funny.

00:22:10.000 This tells me you know the inside baseball of this, right?

00:22:13.000 Right, right.

00:22:13.000 Exactly.

00:22:14.000 That's right.

00:22:14.000 So FDA and SEC and FAA, they're set up for a very 20th century environment where, as you say, their whole conceit is they're protecting you from yourself.

00:22:24.000 So FDA is set up to go and regulate Pfizer and Merck, and SEC is set up to regulate Goldman and Morgan, and FAA is set up to regulate Boeing and Airbus.

00:22:34.000 But what FDA is not set up to do is regulate a million biohackers all taking their own health into their own hands.

00:22:41.000 Right?

00:22:41.000 And SEC is not set up to go after a million crypto holders who all want to take their own risks.

00:22:46.000 And FAA is not set up to go after a million drone hobbyists, right?

00:22:49.000 So those assertions of individual liberties, which the internet has enabled in all three of those cases, right?

00:22:56.000 others I could name, are what put the lie to the idea that the regulator is protecting you.

00:23:01.000 They're just protecting you from your own benefit, right?

00:23:04.000 Yeah.

00:23:05.000 Because they prove the existence of what an alternative looks like.

00:23:07.000 Exactly.

00:23:08.000 That's right.

00:23:09.000 And so we can see what the SEC is protecting you from getting wealthy.

00:23:13.000 We will now soon see the FDA is protecting you from getting healthy.

00:23:16.000 I actually like that framing quite a bit.

00:23:20.000 They're protecting it.

00:23:21.000 I mean, even when you think about that particular example of the SEC is protecting you from getting wealthy, it's just a very specific case.

00:23:30.000 When I started Royven, so this is the biopharmaceutical firm I founded back in 2014, I first started, as many people do, with the friends and family round.

00:23:38.000 I did not go...

00:23:39.000 It's funny your framing of the inside versus outside.

00:23:42.000 I think that actually comes full circle several times around.

00:23:45.000 Sure.

00:23:45.000 I think if you're starting the biotech company, the actual normal way to go is actually just this series, fill in the blank, A, B, C, venture capital treadmill, which actually is very much the inside.

00:23:54.000 I took what I thought was an outside path.

00:23:56.000 To building a biotech company.

00:23:59.000 We're both in the grand scheme of things.

00:24:01.000 We can quibble about the framings.

00:24:02.000 I was just kidding around.

00:24:02.000 But I think it's interesting on this.

00:24:05.000 I started with a friends and family around.

00:24:06.000 A bunch of people who had gone to college.

00:24:08.000 I had worked at hedge fund.

00:24:09.000 I wasn't born into any kind of wealth, but had achieved Enough money to put my own money into the company, put millions of my own into the seed round, and had many other friends who, by the time they were seven or so years, at that point 2014, yes, seven or so years out of college, a good number of them had achieved financial success and were able to invest in the company as well.

00:24:30.000 One of my friends who was one of my roommates for two years, Really wanted to do it.

00:24:34.000 He didn't know the first thing about biotech, but he knew about me.

00:24:37.000 And he said, okay, if you're starting this company and you're going in on it, I want to put, for him, he wanted to put, I think, something on the order of $100,000 into it.

00:24:43.000 But he wasn't accredited.

00:24:44.000 That was a lot of money for him.

00:24:45.000 He wasn't an accredited investor.

00:24:46.000 That's the thing.

00:24:47.000 That's the thing.

00:24:48.000 So the accredited investor laws and the regulations- Lost out on what, 10X, 50X, something like that.

00:24:52.000 He would be millions of dollars.

00:24:54.000 Millions of dollars.

00:24:55.000 His $100,000 would be today.

00:24:58.000 I have to do the math, but multiple millions of dollars.

00:25:02.000 But he could have legally gone and put all that into...

00:25:04.000 He could have put that into lotto tickets, and he could have put that into Vegas.

00:25:07.000 Yeah.

00:25:08.000 Exactly.

00:25:09.000 This is the ultimate irony, is...

00:25:13.000 He wanted to bet on a friend who he knew.

00:25:16.000 And he had a better investment thesis than any other hedge fund that later came in to future rounds had, right?

00:25:20.000 They didn't know me.

00:25:21.000 And the number one predictor factor of the success of a business at an early stage, I believe at least, is going to be the entrepreneur who's behind it.

00:25:28.000 And he had what in the investment world you'd call investment alpha.

00:25:32.000 He had a unique insight.

00:25:33.000 That if you want to frame it in the terms of technical professional investing, he had exactly the thing that every investment firm aspires to.

00:25:40.000 A deep understanding of what that business was or wasn't going to do in a way that was uncorrelated with the market.

00:25:46.000 Yet he wasn't allowed to act on his own unique alpha and insight.

00:25:50.000 Lost out the SEC and the relevant regulations in the securities laws, protected him from getting wealthy.

00:25:57.000 And I do think that that is the ultimate case against the administrative state is that not that they're hurting the people who they're trying to regulate, but they're hurting the very people who they allegedly care to protect in the process.

00:26:13.000 Oh, yeah.

00:26:13.000 That's exactly what we see with the FDA as well.

00:26:15.000 I mean, look at how many patients are suffering with PTSD that aren't going to have access to a therapy that they want access to, that a company in this particular case, I think it's debatable whether they should have to go through this type of elaborate multi-phase three testing.

00:26:27.000 Say what you will.

00:26:29.000 You have to get two phase three studies approved, not because a statute says so, but because the FDA says so, which is bizarre.

00:26:35.000 Adds about 30% extra to the cost of the development of any drug.

00:26:38.000 But this company jumped through both those hoops and the FDA decides at the end that patients who want it and the company is willing to sell it that's gone through the hoops that the FDA identified still isn't able to sell that to patients.

00:26:47.000 They're, as you put it, you know, now protecting people from becoming healthy.

00:26:51.000 Well, so it actually goes very deep.

00:26:54.000 And one of the biggest things is, I think, At this stage in the life cycle of this whole bureaucracy and this regime, I think it's a mistake to say that they mean to do well.

00:27:10.000 They mean to do well for themselves.

00:27:13.000 And what I mean by that is not financially, because money is not everybody's incentive.

00:27:18.000 somebody who is senior at FDA cares about power much more than money.

00:27:23.000 And what I mean by that is, for example, somebody who's an academic and they give up a career in industry, they care about status more than money.

00:27:35.000 So money is not the only axis along which people can sacrifice.

00:27:39.000 Some people want status.

00:27:40.000 Some people want power.

00:27:41.000 And there's this great book by Daniel Carpenter called...

00:27:46.000 called Reputation and Power.

00:27:47.000 Have you read it or heard of it?

00:27:48.000 No.

00:27:49.000 Okay.

00:27:49.000 Worth reading.

00:27:50.000 And the reason for it is Carpenter is basically a pro-regulatory state liberal.

00:27:57.000 But to his credit, he includes enough unexpurgated quotes from the executives that he interviews that you can sort of get the real story through the quotes.

00:28:08.000 Okay.

00:28:10.000 And It's a little bit like, you know, imagine like in the Vietnam War when hostages were being interviewed on TV and they would blink like I'm being captured like that and you could decode it through the Morse code, right?

00:28:23.000 You can see from the quotes that Carpenter has, like he talks to Earl Robb, who is the CEO of Genentech.

00:28:29.000 And Earl Robb says, you know, the FDA owns you body and soul.

00:28:33.000 They own the entire industry.

00:28:36.000 When they told me to fire an executive, I fired the executive.

00:28:39.000 They basically are the number one gatekeeper.

00:28:41.000 Once you realize this and you hear from the executives what it actually is to operate under FDA, then you realize, oh, like the entire pharmaceutical industry was basically gilded for like 70 years.

00:28:54.000 And what isn't like that is tech.

00:28:57.000 What isn't like that is finance.

00:28:58.000 And so our DNA kind of coming back in is a completely new species that they haven't seen in literally generations, which is like sort of the headstrong, self-confident executive.

00:29:10.000 Right.

00:29:10.000 So I want to actually, your MDMA thing actually has like three really interesting branch points to go through.

00:29:16.000 I just want to kind of touch on each of them.

00:29:18.000 There's at least three areas we can touch on, which are the FDA, just what drug approval should be, and the regulatory state, right?

00:29:24.000 So first, let's talk about the ideal world where FDA doesn't exist, okay?

00:29:29.000 So we have a new jurisdiction, whether it's on Mars or it's in a new network state, like a new country we founded or something like that, okay?

00:29:36.000 Okay.

00:29:38.000 I think the first thing is to go back into history and learn about Banting and Best, okay?

00:29:43.000 And you may have heard of them, Banting and Best.

00:29:46.000 They came up with the idea for insulin in, like, I think it was 1921. And then they tested it on dogs, and then on themselves, and then on willing patients by 1922. And then they had scale production for the entire North American continent and the Nobel Prize by 1923. Okay.

00:30:05.000 So that was like a time when pharma moved at the speed of software.

00:30:08.000 You can check my dates on that, but that's very close, I think, right?

00:30:11.000 Let me actually double check that because I love people.

00:30:13.000 No, no, no.

00:30:15.000 We'll leave it to people with the caveat.

00:30:18.000 I love your precision, Matt.

00:30:19.000 Fine.

00:30:19.000 I'm pretty sure that's right, but people can double check.

00:30:23.000 The point is that they were not doing the phase 1, 2, 3, 4. That whole rigmarole is treated as if it was S&P orbitals.

00:30:34.000 I know it's a technical reference, but that's from chemistry, right?

00:30:37.000 The phase 1, 2, 3, and 4 are treated as if they're fundamental.

00:30:41.000 It's man-made.

00:30:41.000 It's not nature-made.

00:30:42.000 Exactly.

00:30:43.000 That's right.

00:30:44.000 These are not fundamental constants of nature.

00:30:46.000 They are bureaucratic hurdles imposed by man.

00:30:49.000 And they should only be there if their benefits exceed their costs.

00:30:54.000 But the thing is, if you go back to how all of these drugs that Banting and Best types developed, all the grandfather drugs that FDA included as a list, there's a bunch of drugs, if you go back, a lot of small molecules that FDA basically said, okay, they're fine because they were in wide use Before the, you know, the Pure Food and Drugs Act or the various acts that powered up FDA, there's a bunch of grandfather drugs before that point.

00:31:20.000 They were not tested with double-blind, placebo-controlled trials.

00:31:23.000 They were tested iteratively.

00:31:25.000 And the reason I want to emphasize this is FDA, today's FDA minimizes side effect size.

00:31:34.000 It does not maximize effect size.

00:31:36.000 Mm-hmm.

00:31:38.000 That's a huge difference because minimizing side effect size, even if that's even true, by the way, because it sometimes pushes it into something where you've got really terrible drugs in other ways, what they are scared of is their incentive structure is basically threefold.

00:31:53.000 They don't want to get hauled in front of Congress.

00:31:54.000 Exactly.

00:31:55.000 That's right.

00:31:56.000 So first of all, you can be blamed.

00:31:57.000 Their entire industry culture or the entire agency culture is shaped by thalidomide.

00:32:03.000 And the number one thing you can be is...

00:32:05.000 Which for people's benefit is a drug that was previously approved that was associated with birth defects, was later removed from the market, but Europe actually was much later to the punch than the United States.

00:32:17.000 And the fact that the FDA stopped US harm relative to what had been seen in Europe is this classic example that every time somebody brings up a debate about the FDA, the first thing you're going to hear is thalidomide.

00:32:28.000 And some guy is going to get up on a high horse and talk about that for about two hours Exactly.

00:32:33.000 Now, here's the thing.

00:32:34.000 When you actually dig into the details, Kelsey actually was just holding back all drugs, and she suspected thalidomide of having neurological issues, not teratological issues.

00:32:44.000 Yeah, exactly.

00:32:45.000 Okay?

00:32:45.000 So it was just something where it's like, if you think about it as a binary classifier...

00:32:50.000 It was very happenstance, actually.

00:32:51.000 I'm glad you know the history of this.

00:32:52.000 It was...

00:32:53.000 It's this sort of example that they happen to be quote unquote right for the wrong reasons anyway.

00:32:57.000 Yes.

00:32:58.000 If you dig into it, it should not give you any confidence about the FDA's ability to actually predict what is or isn't going to be wrong in the first place.

00:33:04.000 It's what Hayek called the fatal conceit.

00:33:06.000 That's right.

00:33:06.000 And I think that the FDA suffers from it.

00:33:08.000 Now, here's the thing.

00:33:09.000 In tech, we actually have an analytical framework that you're also probably familiar with, the false positive and false negative rates, right?

00:33:16.000 Yeah, of course.

00:33:17.000 I mean, this is, yeah.

00:33:17.000 Okay.

00:33:18.000 And so if you think of a regulator as a quote binary classifier, and this might be a little bit technical for people in the audience, but let me explain.

00:33:24.000 Let's say you have a bunch of widgets coming on an assembly line.

00:33:27.000 Okay.

00:33:28.000 And you test them.

00:33:29.000 You want to see which of those widgets are good.

00:33:33.000 Okay.

00:33:33.000 Which are bad, but your test might itself be off.

00:33:36.000 And so you might say that something is bad when it's good or good when it's bad.

00:33:40.000 So all four possibilities are there.

00:33:42.000 It's good, and your test says it's good.

00:33:44.000 It's good, your test says it's bad.

00:33:46.000 It's bad, and your test says it's good, and it's bad, and your test says it's bad.

00:33:48.000 The problem is the FDA is not benchmarked on its true positive, true negative, false positive, and false negative rates.

00:33:56.000 It needs to actually be externally benchmarked on that.

00:33:59.000 And how do you do that?

00:34:01.000 Go ahead.

00:34:02.000 As it relates to the problem of...

00:34:03.000 Go ahead.

00:34:04.000 Go ahead.

00:34:04.000 The most interesting thing about your observation there is actually your point about the incentive structures is that they are heavily incented to protect themselves against being exposed for a case where a drug has an unintended side effect that they didn't spot because they don't participate in the upside of a positive drug that has a massive effect, but they occasionally face the personal, often very personal downside of approving a drug that had an unintended side effect.

00:34:29.000 That's what their incentive structure is.

00:34:31.000 But actually, just to that point, I think it's a great point you made, and I think your point about the false positives and false negatives and where the incentives lie bolsters that.

00:34:40.000 Actually, in the few instances, though, where a company has taken it into its hand to publicly make sure that they create the same risk structure for those FDA officials being hauled in front of Congress for why they didn't approve a drug, that patients were dying from a disease or suffering from a disease that otherwise wasn't being treated, cured or addressed, they then respond to that incentive structure in the other direction.

00:35:02.000 Exactly.

00:35:02.000 It was the incentive structure of the bureaucracy all along, not some type of fixed point philosophy that was the right way for deciding whether or not drugs made it to market.

00:35:11.000 That's exactly right.

00:35:12.000 And that's like ACT UP, for example, in the late 80s, right?

00:35:14.000 Because that was actually something that pointed in the opposite direction.

00:35:17.000 For the history, for people who don't know about this, essentially HIV, AIDS was then sweeping the gay community.

00:35:25.000 And there's actually a movie that's been made on this called Dallas Buyers Club, which I recommend people watch.

00:35:30.000 It's a pretty good movie.

00:35:32.000 It's an era of not very good movies.

00:35:34.000 It's a pretty good movie.

00:35:34.000 Yeah, it's not a date movie.

00:35:39.000 Probably not.

00:35:40.000 But it's a good movie.

00:35:43.000 It depends on your date.

00:35:45.000 It could be a good sign if it were a good date movie for you.

00:35:50.000 It depends on the kind of date.

00:35:51.000 That's true.

00:35:52.000 But let's just say, though, it's a very informative and educational movie.

00:35:56.000 And it's actually, as a meta-meta point, it's unusual because it's one of very few examples in Hollywood where you have a regulator or a bureaucrat or an NGO or a journalist who's a bad guy.

00:36:09.000 I can count on like one hand, right?

00:36:10.000 Like Ghostbusters.

00:36:11.000 Usually they're the heroes.

00:36:12.000 Oh my gosh.

00:36:13.000 I mean, what was this obnoxious movie most recently?

00:36:15.000 The Civil War movie.

00:36:16.000 I actually went in to watch that.

00:36:17.000 Oh God.

00:36:17.000 Oh my God.

00:36:18.000 Yeah, yeah, yeah.

00:36:19.000 Oh my God.

00:36:19.000 Did you go to watch this?

00:36:21.000 I did watch it.

00:36:22.000 Go, give me your thoughts.

00:36:22.000 I'll give you my thoughts.

00:36:23.000 Go.

00:36:23.000 We just walked into, we went to a movie theater and I rarely do this.

00:36:27.000 I rarely go to movie theater.

00:36:28.000 But having gone into the movie theater, we walked out about 20 minutes in.

00:36:32.000 It didn't get into the underlying content of it all.

00:36:33.000 It was just like a glorified lionization of the journalist as the person who's actually going to save the country when, in fact, the journalists at issue are nothing more than an artificially deified version of a New York Times reporter.

00:36:49.000 Yeah.

00:36:50.000 Well, it's funny.

00:36:51.000 That movie was an unintentional own goal, in my view.

00:36:55.000 Because it was actually it revealed that the journalists were actually not neutral, but literally on one side where they were the ones who I mean, they were literally taking like a gore shot of the president shot at the end or whatever.

00:37:10.000 Go ahead.

00:37:13.000 Yeah, it was projection.

00:37:15.000 You could almost see the thirst of what they want right now in the country.

00:37:20.000 That's right.

00:37:20.000 And they projected themselves as, oh, they're the diverse and multiracial journalists or whatever against the evil white guys in the military and the Republicans.

00:37:31.000 It was very obviously that.

00:37:33.000 They didn't have the courage to actually You know, show it be red versus blue.

00:37:39.000 The reason they made it California and Texas is to make it seem like, oh, it was a president who was above democracy, so even Texas broke away.

00:37:45.000 You know, the same kind of trick they always try to pull, right?

00:37:48.000 Yeah, exactly.

00:37:48.000 Exactly.

00:37:49.000 It was garbage. 0.99

00:37:50.000 Here in reality, as you probably, you know, your viewers are probably aware, For example, Latinos have moved 41 points towards Trump. 0.99

00:37:58.000 It was like 62-26 in 2020. Biden, it's like 39-34 towards Trump last I looked.

00:38:04.000 Other demographic groups have moved this way.

00:38:08.000 I don't believe it legitimates someone to have a particular minority group vote for them, but Democrats do.

00:38:15.000 And so that has been, you know, removed.

00:38:17.000 Anyway, coming back to the stack.

00:38:19.000 So go ahead.

00:38:19.000 Yeah.

00:38:20.000 Come back to Dallas Buyers Club.

00:38:21.000 And then I actually want to actually remind me of a topic I want to hit with you, which is what the heck is going on in the UK. Sure.

00:38:26.000 Yes.

00:38:26.000 We'll come back to that.

00:38:27.000 All right.

00:38:27.000 Wrap this point and we'll go to the UK. Good, good, good.

00:38:29.000 Okay.

00:38:29.000 So basically the thing about Dallas Buyers Club is it depicted a scenario where the regulator is a bad guy.

00:38:37.000 Why is it bad?

00:38:38.000 Why are they the bad guy?

00:38:39.000 Because they were denying life-saving drugs immediately.

00:38:43.000 on death's door, PWH, HIV, AIDS, on death's door, and they were going to die anyway. 0.70

00:38:47.000 So why not let them take an experimental drug?

00:38:51.000 And in fact, there were people who had, you can Google this, but if I die, bury my body on the steps of the FDA, right?

00:38:58.000 Like those kinds of t-shirts and stuff.

00:39:00.000 And I think somebody should make a movie about this called FDOA, FDA dead on arrival, right?

00:39:09.000 Where essentially every drug that FDA has approved really has the same story as the HIV AIDS The difference is that the victims are typically not unionized in the same way.

00:39:21.000 But social media, though, they could be.

00:39:23.000 And what I mean by that is every time you've got a drug that is approved and then afterwards you see a decline in morbidity and mortality, Mm-hmm.

00:39:37.000 And during that period of when it was in queue to be approved, that delta in morbidity and mortality is all on the head of FDA.

00:39:45.000 Of course.

00:39:46.000 Right.

00:39:46.000 That literally is blood.

00:39:47.000 That is, you could argue, is a form of blood on your hands.

00:39:50.000 Exactly.

00:39:50.000 That's right.

00:39:51.000 During just the review period.

00:39:52.000 Just the review period alone.

00:39:53.000 Just the review period.

00:39:55.000 Correct.

00:39:55.000 That's actually an unassailable argument.

00:39:57.000 Because you could say that the time before that, they would say, well, no, no, no, because there's uncertainty.

00:40:01.000 And so you can't measure that against the fact that there was protective failures.

00:40:04.000 But just the review period alone is blood on the hand of the FDA.

00:40:07.000 I think it's actually a very fair framing.

00:40:08.000 Yes.

00:40:08.000 I'll just continue on that point just for a second.

00:40:11.000 Yeah.

00:40:11.000 So this is what Alex Tabarrok and others have called drug lag.

00:40:14.000 OK, they've got some good papers on this.

00:40:16.000 And I thought about a way for how you'd humanize this.

00:40:19.000 What you do is you put up Google ads for people who are Googling that symptom or that condition or what have you.

00:40:27.000 And often they'll have a relative or somebody who passed away during that period.

00:40:31.000 OK, when it was in review, but the drug wasn't available.

00:40:35.000 And then you try to interview as many of those people as possible while they're still around.

00:40:39.000 And you put their stories together.

00:40:41.000 And now you've humanized that statistic where you actually have somebody whose life would have been saved if they could get that experimental drug.

00:40:47.000 I think that would sort of work.

00:40:50.000 Here's my attitude towards a lot of your proposed solutions, Belgy, is they're smart, they're intelligent, To almost like a fault, right?

00:40:58.000 I think you are drawn to...

00:41:00.000 You're not asking me for...

00:41:01.000 Sure, sure.

00:41:01.000 Give me your critique and I'll give you my critique.

00:41:03.000 Go, go.

00:41:04.000 And this is not just of this particular solution, but I think a lot of the form of your solutions in which they emerge, which I find fascinating.

00:41:11.000 I'm talking to you because I find you incredibly smart and fascinating and bold.

00:41:16.000 But I think the form of a lot of your solutions, I think you could even say some...

00:41:20.000 About the relationship between holding the Fed accountable with Bitcoin.

00:41:23.000 I agree with everything you said, but you put too much on the shoulders of Bitcoin to solve the world's problems.

00:41:27.000 You put too much on the shoulders of the Google Ads here to solve the world's problems.

00:41:31.000 You put too much on the shoulders of the idea of the existence of nation state alternatives to somehow fix the existence of actually what exists within the nation state.

00:41:39.000 But anyway, on the point of the Google ad point, you humanize the story.

00:41:44.000 The bureaucracy is actually very good at this, right?

00:41:46.000 Even J. Edgar Hoover's FBI, and I think the FDA shares this in common too, is actually very good at its own PR. It's one of the things they master the most.

00:41:53.000 So they'll bring back the thalidomide story times 10 in a way that the decentralized mechanism finds much tougher to compete with.

00:42:00.000 In a world at least in which people, yes, it is a post-Elan, Twitter and beginning of decentralized world, but still one in which the native human instinct is still to trust that which is centralized.

00:42:12.000 That's why the mainstream media still has such a main impact on the direction of elections, even in a world of social media.

00:42:17.000 That might be different 40 years from now than today, but that's where we are today.

00:42:20.000 I want to actually bring up the counterargument to what you and I both say.

00:42:24.000 Can I poke for a second?

00:42:26.000 Can I just poke for a second?

00:42:27.000 No, because I mostly wanted to criticize you without giving you a chance.

00:42:29.000 Okay, go ahead.

00:42:30.000 Go ahead.

00:42:31.000 Respond to that and I want to say one thing about the FDA. All I'd say is I love lots of stuff you do.

00:42:37.000 I would just say where you round things to 51, I'll round, you know, 51, 49, I'll round them the other way.

00:42:44.000 Yeah, I know that.

00:42:45.000 Right.

00:42:45.000 We won't reform the Fed without Bitcoin.

00:42:48.000 We won't be able to reform the media without social media.

00:42:52.000 And we won't be able to reform, in my view, the FDA without competing jurisdictions and exit.

00:42:56.000 And let me just- I agree with all of those things.

00:42:58.000 Yeah.

00:42:59.000 I agree with all those things.

00:42:59.000 As you said, at the same point, you're just rounding it and putting your emphasis in a slightly different place where my focus has been.

00:43:04.000 And it's complimentary, right?

00:43:06.000 Like, that's why, you know, I will just, you know, by disposition and personality, I'm Mr. Outside.

00:43:11.000 And then you can take those and you can point at them.

00:43:14.000 You can say, this is working.

00:43:15.000 We need to, you know, adopt it.

00:43:17.000 Like, for example, what, you know, President Trump just did where he said, hey, you know, let's not sell our Bitcoin and so on.

00:43:23.000 That was a good outside-inside kind of thing where, you know, two arms kind of work in a different way.

00:43:29.000 One thing I just want to say, by the way, on how to actually reform the FDA mechanistically, okay?

00:43:33.000 Yeah.

00:43:34.000 I think the crucial thing is you have to build alternative centers of power.

00:43:40.000 You may know this, but maybe your viewers don't.

00:43:42.000 You know the concept of harmonization?

00:43:44.000 Of course.

00:43:45.000 Okay.

00:43:46.000 So viewers may not know this, but if you Google FDA harmonization, FAA harmonization, SEC harmonization, what the U.S. government wants to do is they want to take their laws that some unelected bureaucrat in Silver Spring, Maryland wrote, tenured after two years, you don't know their name, but they want to take their rules, their regulations, and export them to the whole world.

00:44:07.000 In much the same way, let's say a small country in Eastern Europe might use...

00:44:13.000 Let's say a small company uses Facebook login rather than building their own login.

00:44:17.000 A small country might use FDA regulation rather than building their own regulation.

00:44:20.000 And this is called harmonization.

00:44:23.000 Right.

00:44:23.000 And the reason those countries...

00:44:24.000 And the US bureaucracy loves it, by the way.

00:44:26.000 The US bureaucracy loves it.

00:44:27.000 And actually big companies, you know, Pfizer and Merck also love it because they get their approval in the US and then they can just export it everywhere because they're all backwards compatible, right?

00:44:37.000 And so there's a rationale for why government and business work together on trying to smooth out the whole world and make it just...

00:44:43.000 It's also a way that the EU gets to free ride on the US, by the way.

00:44:45.000 Yes.

00:44:46.000 Because then they can claim that the incremental cost of getting approved in Europe was lower.

00:44:49.000 Therefore, the price and the reimbursement of the drug in Europe is lower.

00:44:51.000 So there's a lot of just – There's a lot of things.

00:44:53.000 That's right.

00:44:54.000 So now, however, thanks to the fact that the reputation of the regulatory state is just cratering among a critical mass of tech and finance guys both here and in the rest of the world, the SEC thing, just seeing Gensler – The way the bureaucracy lies has never been more obvious to a larger group of billionaires than what SEC is doing, right?

00:45:17.000 All these tech founders, all these millionaires, all these venture capitalists, people who control large pools of capital as well as people who don't control large capital but are founding the next big thing, are all seeing how the SEC lies and they can extrapolate that to FDA and everybody else.

00:45:30.000 Okay, so what does that mean concretely?

00:45:32.000 How do you beat FDA? You have to have, for example, you take the existing exit paths.

00:45:40.000 There's like right to try laws, which actually Trump just talked about on the podcast he just did with Elon or the Twitter spaces rather, X spaces.

00:45:48.000 So right to try laws which allow you to opt out of FDA at the state level.

00:45:52.000 Yeah, I want to say a word about this, though, because this actually just goes into the story about you shed light on an important aspect of the FDA bureaucracy.

00:46:01.000 Let me just use that to shed far more light.

00:46:03.000 So that's considered to be one of the checks, right?

00:46:05.000 President Trump signed into law the right to try legislation as well at the federal level, which gives you the, what it sounds like, right to try something even if the FDA has not approved it, especially for serious or life-threatening conditions.

00:46:17.000 That's a particularly sympathetic case.

00:46:20.000 Here's the dirty little secret in the farm industry, okay?

00:46:23.000 There's an old adage.

00:46:24.000 Anybody in the farm industry, as long as they're convinced they're not going to be recorded in a conversation like this one that you and I are having.

00:46:30.000 They don't want to cross FDA by using those.

00:46:31.000 We'll tell you.

00:46:32.000 Yes, they tell you there's an adage in the farm industry.

00:46:35.000 It's called FDA never forgets.

00:46:37.000 Yes.

00:46:37.000 People say that.

00:46:38.000 Oh, regulatory guys, FDA never forgets.

00:46:40.000 And they're right about that.

00:46:41.000 Right.

00:46:41.000 Because the FDA hates the existence of the right trial legislation and Yes.

00:46:46.000 They lobbied against it when President Trump wanted to pass it.

00:46:47.000 So any company that makes its drug available to a patient knows they're going to face the wrath of the FDA, even on another product that they bring before that same FDA. Yes.

00:46:58.000 That is how this game is played.

00:46:59.000 So the law is defenestrated in its impact.

00:47:01.000 The FDA is a jealous god that wants no others before it, right?

00:47:05.000 It's literally like that.

00:47:06.000 Which means that passing these other laws that sidestep them, whether it's the FDA, we could talk about other agencies as well, Is an incomplete solution at best counterproductive at worst because it appeases the public to make you think you have the option when you don't?

00:47:19.000 Dismantling the bureaucracy is the only correct answer.

00:47:21.000 Okay, so I half agree and I half disagree, and here's why.

00:47:25.000 You want competing systems as well, of course.

00:47:26.000 Yeah, yeah.

00:47:27.000 So there's right to try laws for pharmaceuticals. 0.65

00:47:30.000 There's LDT regulations, which, you know, allow...

00:47:34.000 Laboratory-developed tests for people watching.

00:47:35.000 Laboratory-developed tests.

00:47:36.000 Those allow for clinical labs that are outside of the so-called...

00:47:43.000 FDA approved device, you can go through HHS in different pathway.

00:47:46.000 For a while, I haven't tracked it recently, but there were compounding pharmaceutical laws, right?

00:47:51.000 Where you could have a pharmacist go and mix two drugs together and call it a new drug, right?

00:47:57.000 And FDA tried to crack down on that. 0.53

00:47:58.000 And I'm not sure where the status of that was, but that was the third exit pathway.

00:48:02.000 A fourth example, a big one, is off-label prescription.

00:48:06.000 And this is something where, because AMA, the doctors, have a strong enough lobbying group, they've managed to preserve that right for doctors.

00:48:14.000 But what FDA does is it cracks down on the poor pharma rep who cannot even hand a doctor a paper that says...

00:48:22.000 Drug A could be used for purpose B, because if so, that's off-label marketing and go directly to jail.

00:48:27.000 And in fact, there are some people who are jailed for this kind of thing, and there's a whole free speech case about it and so on, if you recall that.

00:48:35.000 And so- The point is that those are like four examples, and there's more I can probably think of, that are...

00:48:42.000 Oh, and the fifth is medical tourism, like traveling outside, like Kobe going to Germany for stem cell treatment, right?

00:48:47.000 So those are five examples of exit, right to try, LDT, The compounding pharmaceuticals, if it's still open, the off-lil prescription and medical tourism that are always over outside FDA jurisdiction where you're getting better treatments, right?

00:49:06.000 And what those do is they show the presence of an alternative and they start to build.

00:49:10.000 I mean, you have a lot of venture-backed companies in some of these areas, right?

00:49:14.000 Once you can make financial returns there, you start taking that aperture, you start widening it into a tunnel And now there's a reason for it to exist.

00:49:22.000 You take the daylight and you just crank it open.

00:49:24.000 That's right.

00:49:25.000 That's a different road.

00:49:27.000 It's very different than going through the front door and instead of taking the little ply to the open door crack and cracking it open, you take a jackhammer to the bureaucratic apparatus itself.

00:49:39.000 And just start going, which is why I ran the president, by the way.

00:49:42.000 True, true, true, true.

00:49:42.000 And I'm glad you're doing that.

00:49:44.000 And so you can make an argument for the decentralized approach.

00:49:47.000 No, but you're young, and you'll do, you know, we're both, I think, I've got a little gray hair, but we're both reasonably young.

00:49:52.000 How old are you?

00:49:53.000 Me, I'm 44. But I'm not actually as gray as I look.

00:49:56.000 I just have the beard right now.

00:49:58.000 I'm actually- Just very wise.

00:49:59.000 I like that.

00:49:59.000 Thank you, thank you, thank you.

00:50:01.000 Well, you know, so let's just close on this because, okay, A, if you're cool with it, I want to talk to you again in a different conversation about the UK, about the future of the nation state, about competing views on nationalism, on your post-national vision.

00:50:17.000 Let's save that for next conversation to do with justice, because we spent a lot of time on the FDA, which I think was fun, actually.

00:50:22.000 Yeah, yeah.

00:50:23.000 No, it was great.

00:50:23.000 Talk to somebody who knows as much as you do to be able to dive into this kind of conversation we had.

00:50:29.000 But on the administrative state, I actually see a fissure in the conservative movement right now in our respective commitments to even taking on the regulatory state.

00:50:42.000 So right now, it's an interesting moment on the right.

00:50:45.000 I mean, it's the easiest thing.

00:50:46.000 You and I are probably on the same side of this.

00:50:48.000 We could bash a lot of the left.

00:50:49.000 I've done that in different contexts.

00:50:50.000 I consider myself a centrist, by the way.

00:50:52.000 I very much a centrist.

00:50:54.000 I think what is a right or what is a left?

00:50:57.000 Everybody is to the right of the far left, so keep going.

00:51:00.000 We could bash Kamala Harris and Tim Walz.

00:51:03.000 That's too easy.

00:51:04.000 That's too easy, yeah.

00:51:05.000 But I think what's more interesting is there's a debate on the right now is, should we...

00:51:10.000 Succeed in winning the election, let's say, as Republicans in the United States.

00:51:13.000 Is the right approach to restaff those bureaucracies with people who have a conservative outlook?

00:51:19.000 Or is the right answer to actually focus on just shutting down, permanently dismantling and defenestrating those bureaucracies?

00:51:27.000 And I come down on the latter side.

00:51:29.000 I think that this has deep implications for what you think about the role of the government should be in setting what you might think of as industrial policy, right?

00:51:36.000 It still requires a bureaucracy or decision maker to be able to decide which industries are or aren't favored.

00:51:42.000 It has implications even for the debates around immigration and some other issues that I think the right is grappling with.

00:51:47.000 But at the core of, I think, the future direction of the American right, certainly, is what is our level of commitment to actually dismantling that federal bureaucracy versus reconstituting it?

00:52:00.000 And I think that that's something that hasn't yet worked.

00:52:02.000 Quite percolated to the surface, but is brewing, is really brewing with, I think, some vigor, a debate beneath the surface that will define the future direction of the Republican Party.

00:52:13.000 And in closing, I know somebody who's just a deep thinker.

00:52:16.000 I'd love your perspective on certainly what I see as that brewing debate ahead.

00:52:20.000 Totally.

00:52:21.000 So I actually do need to show a figure just to anchor this, okay?

00:52:26.000 Okay.

00:52:27.000 Okay, even if your viewers can see this.

00:52:31.000 So basically, do you see this graph which shows the organizations that have donated to Biden in 2020 versus those to Trump?

00:52:40.000 Everything is blue, and the only things at the bottom, NYPD and the Marines, are just slightly red.

00:52:45.000 Do you see that?

00:52:46.000 There's like red specks at the bottom.

00:52:49.000 Specks at the bottom.

00:52:49.000 These giant blue bubbles at the top.

00:52:51.000 Yes.

00:52:52.000 That's right.

00:52:52.000 This is then a different graph, which is showing GDP in 2020. And I can get into why.

00:52:56.000 But in 2020, Biden counties had 71% of GDP. Trump counties only at 29. And that's exacerbated.

00:53:04.000 That's amplified since 2020. It might be 75, 25 now, like a three to one advantage for blue in terms of GDP. There's an even more strong advantage in academia.

00:53:15.000 I've got another graph, even better than this one, but I can show you.

00:53:18.000 It's something like between 60 to 90% of professors in various disciplines are blue, and then 95% of journalists are blue.

00:53:26.000 So what that means is that the power level of blue Is extremely high in the US. They control the US institutions. 0.97

00:53:37.000 They control most of the money.

00:53:38.000 They control academia and they control media.

00:53:41.000 There are some prominent, you know, red or like red-gray defectors, tech libertarians and so on.

00:53:47.000 There's Ackman and obviously Elon and others.

00:53:50.000 But in terms of Those are like heroes.

00:53:54.000 Those are like your top guys.

00:53:55.000 In terms of just the bulk of the troops, so to speak, right?

00:53:59.000 The power level in society, Blue just significantly outnumbers. 1.00

00:54:05.000 If you stack up the two, quote, groups, who can impose whose will on the other?

00:54:10.000 Right?

00:54:11.000 So then that gets to...

00:54:14.000 Your capabilities influence your strategy.

00:54:16.000 A startup has to have a different strategy than Google.

00:54:19.000 You can't run an overdog strategy as an underdog, nor vice versa.

00:54:24.000 So I think the first thing is Republicans need to think of themselves realistically as extreme underdogs.

00:54:31.000 And it's actually remarkable.

00:54:33.000 It's insane in some ways that they can contend for the presidency and have some control of the Supreme Court and whatnot.

00:54:39.000 Because all Democrats do on every level, and this is a whole talk we could go through, The blue business model is to take control of some government agency and funnel the money to Democrats.

00:54:50.000 Example, the homeless industrial complex.

00:54:52.000 They basically have the budgets.

00:54:56.000 Go ahead.

00:54:56.000 That's a good description.

00:54:57.000 I'm writing that one down too.

00:54:58.000 Yep.

00:54:59.000 Good to know.

00:54:59.000 The homeless industrial complex.

00:55:00.000 Yep.

00:55:00.000 So the homeless industrial complex, right, basically is something where they are...

00:55:06.000 One graph will show that if you've never seen this graph before.

00:55:09.000 In San Francisco, The budget for dealing with the homeless goes up and to the right as the number of homeless goes up and to the right.

00:55:18.000 And the reason for that is that's what they're paid for.

00:55:21.000 They're paid to actually make the problem worse. 0.76

00:55:24.000 And so more homeless, more budget for homeless.

00:55:27.000 And so once you see this, you see it everywhere.

00:55:30.000 Remember the California trains, the $100 billion California train?

00:55:34.000 Totally.

00:55:35.000 The whole point of that was to steal money.

00:55:38.000 You become addicted to the very problem you want to solve and you have a vested interest in its continued existence.

00:55:43.000 That's exactly right.

00:55:44.000 And so when you see this, I'll just show you one more graph and then I'll just only talk it through, okay?

00:55:49.000 But look at this one, all right?

00:55:51.000 When you see this, take a look at this.

00:55:55.000 Look at this, okay?

00:55:56.000 Department of Homelessness budget went from $200 million in 2016 to $1.1 billion by 2021. But the SF homeless population also skyrocketed during that time, and this is probably an undercount.

00:56:08.000 That's right.

00:56:09.000 Of course, there are justifications that they'll need it to be able to catch up, as opposed to even positing the possibility of a causal relationship in the other direction.

00:56:16.000 That's right.

00:56:17.000 You and I also are both businessmen.

00:56:19.000 If you had a business that went from $200 million to $1.1 billion in five years, that's an incredible rate of growth at that scale.

00:56:27.000 This is a business model you'd scale out everywhere.

00:56:32.000 Yeah.

00:56:32.000 And that's what they did.

00:56:34.000 That's funny.

00:56:35.000 Okay.

00:56:36.000 So once you see...

00:56:37.000 Go ahead.

00:56:38.000 We're, I think, unfortunately, at least unfortunately for me, out of time today.

00:56:44.000 I want to pick this up.

00:56:45.000 Let's pick this up in the next few weeks.

00:56:46.000 We foregrounded, I think, some of the elements where we mostly agree on the administrative state.

00:56:53.000 I'd love to talk a little bit more about our competing visions on solutions.

00:56:57.000 Sure.

00:56:57.000 And not just to the administrative state, but to the problem even of the dilemma of what the modern nation actually represents.

00:57:04.000 We can even weave some of our observations of what's going on in the UK into that.

00:57:08.000 But I love that you are somebody who is smart, unafraid, and outside of the usual partisan boxes or boxes in general that people try to put you into.

00:57:19.000 And I would just say keep that up.

00:57:21.000 We need more of that in our discourse.

00:57:23.000 And as long as you're up for it, you're welcome on this podcast anytime.

00:57:28.000 But let's definitely schedule in a couple of weeks a continuation of the chat that we just began today.

00:57:35.000 Excellent.

00:57:35.000 Ditto.

00:57:36.000 Same to you.

00:57:36.000 Let's do it.

00:57:37.000 Yeah.

00:57:38.000 Good seeing you, man.

Truth Podcast - Vivek Ramaswamy - August 14, 2024

The FDA Has Blood on its Hands? | Balaji Srinivasan | TRUTH Podcast #59

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