Trump's NIH Cuts Send Shockwaves Through the Science World
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Hey, Odd Lots listeners, we're coming to D.C. We're finally doing it, Joe. It's going to be our first live show in Washington, D.C., our nation's capital. It's also finally going to be the time where we actually talk about the Jones Act. We've been talking about doing the Jones Act episode of OddLots.

odd lots for a long time, and it's become this recurring joke that we've never done. But we're going to do it in grand style because we're going to be doing it live in D.C. And it's actually going to be a debate. Yeah. So we have Sarah Fuentes from the Transportation Institute. She's going to be taking the pro side. And we also have Colin Graybow of the Cato Institute. He'll be taking the against side.

side, it's going to be really interesting to see how all of that shakes out. In addition to that, we're going to be speaking with Blair Levin, who was around during the telecom bubble. And we have Andrew Ferguson, the new head of the FTC, the one who's replaced Lena Kahn. We're going to be talking about mergers and acquisitions and all that stuff. So

It should be a really fun night. If you want to come and join us for that evening, it's going to be on March 12th at the Miracle Theater. Go to Bloomberg.com forward slash oddlots and you can find the link to purchase tickets. We hope to see you there. Bloomberg Audio Studios. Podcasts. Radio. News.

Hello and welcome to another episode of the Odd Lots podcast. I'm Jill Wiesenthal. And I'm Tracy Alouette. Tracy, we're recording this February 25th, and we're just a little bit over a month into the new Trump administration. And setting aside how one views the long-term goals of the administration from the outside, it's

It's chaotic. And there have been a lot of cuts and it doesn't look like scalpel types of cuts. Many things have been shut down or frozen completely in some respect. And you see a lot of people talk about the implications of these moves, but I find it hard to wrap my head around.

There's a lot happening, that's for sure. And I think one of the struggles of everyone who's trying to follow this at the moment is that you have new executive orders coming out almost daily. Then you have the legal challenges to those. And then you have the administration itself sometimes arguing on

within itself about whether or not certain orders should be followed, certain emails should be replied to. It does feel very chaotic. One area that I think has caught a lot of people's attention in particular has been immediate moves at the NIH, the National Institute of Health. And there are multiple moving parts here.

But from what I've been understand that when there are grants awarded, some of the money goes to direct costs and some of it's indirect. And there has been a change in what's allowed on the indirect. And then I've also seen and it's almost hard to believe, but I've now seen it in enough places that there have been like whole programs that got hit with an immediate freeze, which I have to imagine in science creates all sorts of problems. I imagine there are lots of

endeavors that can't just be stopped, started on a switch. And so understanding what's actually happening right now in science funding and the implications of some of these moves is obviously something we need to discuss, especially given the broader thing of like, we want to be, I think, a country at the leading edge of science and technologies.

Yeah, this is exactly the tension, I think. So even Elon Musk and Donald Trump will talk about how important it is for the U.S. to be technologically advanced and to beat competitors like China. But at the same time, they're doing this. And I guess their argument is that by capping some of the cost of research, you might make it more efficient. You might make it more monetizable. You might see more breakthroughs.

But again, there is this tension to the sledgehammer approach that we've seen, where if you just put in a cap on something like indirect funding, it can affect a bunch of research programs. So we should talk about it. I also...

Also, I must admit, I don't know anything about NIH funding. It seems very sprawling and very complicated. So I want to get into that as well. All right. Well, I'm very excited to say we have the perfect guest, someone who actually is a scientist in the lab working on these things and has been talking about the impact of the moves over the last several weeks.

Thrilled to bring on to the show Carol Lebon, professor of molecular biosciences at Northwestern University. Professor Lebon, thank you so much for coming on the Outlots podcast. Happy to be here. What's happened in the last month?

Why don't you ask a broad question? We need 40 minutes for just answering that question. Three major things have happened in the last month. One is what you alluded to already, this attempt to cap the indirect costs for grants at 15%. And I'm happy to go into that in more detail.

But you can think about it, if you pick any area of research that you might care about, let's say pediatric cancer, that basically amounts to a 15% to 20% decrease in funding for studying those cancers.

And this is an area where NIH has made huge progress. So 40 years ago, if your child was diagnosed with cancer, there was less than 60% of those children that would still be alive in five years. Today, there's a 90% survival rate. So, I mean, these are impacts that are going to be huge. I'm going to actually stop you right there because I think this is important.

There is science research that happens outside of the NIH. When you look at that 40-year history, how do you draw the line for someone who, you know, people are aware of big pharma companies exist, that this is like the NIH should get credit for that progress?

So the NIH is really sort of two different systems. They have an intramural system. So there are scientists running laboratories at the NIH. And by the way, they have not been exempt from these cuts to probationary people. I know of young scientists who had started their independent laboratories at the NIH in the last couple of years who left a week ago Saturday, received an email at night saying that they were terminated and that their access to campus was gone. So there's intramural research.

But the vast majority of NIH grant funds go into their extramural program. These are funds that go to grants at universities in all 50 states. And they are incredibly important for all levels of science. Basic research, translational research, clinical trials are going on not at the NIH, but in Iowa and in Ohio and in Florida.

And so, you know, it's estimated that these grant monies that come to the universities, they support directly about 400,000 or more employees across those 50 states. But also, they drive more than $93 billion of economic activity each year. And again, that's across all 50 states. That's not staying in Washington, D.C.

There's an estimate that for every dollar of NIH grant money that is granted, it generates almost $2.50 worth of economic activity. Just

Just to press on Joe's point, how do you actually measure the success of NIH funding? Is it you produce some new wonder drug that is monetizable and everyone starts using it? Is it just the sort of nebulous concept, I guess, of like advancing scientific research? How do you judge the success and efficacy?

So I think that you can look at that on two levels. So there are the studies that are translational studies that immediately impact human health, and those are very, very important. But just as important is the kind of research that the general public sometimes has trouble wrapping their heads around because you don't necessarily see an immediate advance from that research in human health.

But most of the advances that we see today that are being translated and are really making a direct effect on human health, they stem from studies that were done 10 or even 20 years ago that were foundational. That at the time, again, this is called discovery-based science or basic science or fundamental research.

But it's these foundations that are built on in the more clinical studies and also in industry and the pharmaceutical industry and biotech. They are building on these basic discoveries that were funded by the NIH. I can give you one really cool example. So you've got to have heard of Ozempic, right? The semaglutide that's everywhere these days. Did you know that that came from research, very basic research that was done ages ago

on a venomous lizard called a gila monster. A gila monster? This gila monster is native to the southwest of the U.S., and people noticed that, scientists noticed that it had the ability to fast for an incredibly long period of time. So wanting to understand the biological mechanisms of how it did that led them to isolate from the saliva of a gila monster this, what would eventually become Ozempic.

Talk to us about the math of direct versus indirect costs, because I think this is just something that was in the headline of the announcement. And I don't think I really have a concrete understanding of what the difference is, why there is this distinct allocation. What do you walk us through?

a year ago or just in the up until recently, what this allocation was all about? So every grant that goes to, let's say, Northwestern, where I am, has two components to it. Direct costs that come directly to my research laboratory and indirect costs that are used to support my research. So a lab like mine is analogous to running a small business. So let's say that business is a restaurant. The direct cost of the restaurant would be the food, the cooks and the servers.

But there are other costs to running a restaurant business. You have inventory and purchasing and upkeep of the kitchen equipment and the building, etc. And so the restaurant can't run without those other things. They can't exist with just the food, the cooks and the servers. And so for a research lab like mine, the direct costs are the chemicals and the reagents and the salaries of the scientists who are carrying out the studies, etc.

But there's also indirect costs. And those, again, include maintenance and replacement of equipment, ordering, bookkeeping, handling hazardous waste, compliance with government regulations, all of which are absolutely essential to doing the research.

And the reason it gets separated out like this is actually to save money, because while the direct costs are specific to my particular research, most of those indirect costs are for most, if not all, research labs at a given university. And so you get economies of scale by –

Does that make sense? Yeah. So going back to your restaurant analogy, I guess it's kind of like you're funding a food court, right? So each individual restaurant within a food court might have their own direct costs, but then the cost of actually maintaining the space, renting out the space is sort of shared by everyone doing different things.

Sure. I think that's a great advance on the analogy. And it would be particularly so if they had a pooled, let's say, central billing so that they didn't each have to handle the finances individually. Yeah.

So one thing that I was wondering is how the NIH cap on indirect funding currently, or I guess up until a month or two ago, actually compares with other medical research organizations. Because I'm thinking specifically about organizations like the Gates Foundation. And I think in the announcement, the NIH talked about aligning with other types of research organizations like

the John Templeton Foundation. So how do private research organizations manage to keep their own indirect costs down? And why do their indirect costs seem lower than the NIH's? Oh, I mean, they are lower. And there are, in fact, some types of small foundations that have no indirect costs. I remember back when I was a graduate student at Harvard, Harvard wanted to stop letting their researchers take those grants because they were not...

paying for the other real costs of doing research. But in general, over time, what's come out of it is in the research ecosystem, universities admit that these smaller foundations and even something like the Gates Foundation, they're directing money at very specific things and they can do more with their work

if they lean on the NIH and universities for covering more of those indirect costs. So they don't cover the indirect costs. It's just that it's understood that they can't. So your assertion here is that what appears to be a financing mechanism with lower indirect costs

is capable of existing because, I don't know if free writing is the right word, but because there is also the indirect costs that come from the NIH to aligned or the same labs. Absolutely. They're like a law sleeper.

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So one of the arguments is that a lot of NIH funding goes to a handful of extremely well-endowed universities. It's skewed. That also is something you hear a lot, including from people academia, that there is a tremendous amount of bureaucratic bloat that exists. And I think that's

Setting aside the science, it does not surprise me that the current administration wants to take aim at bureaucratic bloat within America's universities, etc. Why shouldn't we be skeptical of the degree of costs that these labs have borne?

I mean, I think you shouldn't be skeptical because these are negotiated between Health and Human Services and the universities through a very thorough process where they sit down and really have to lay out what the costs are and show proof that that's what the costs are.

So this isn't somebody picking a number out of the air. This has been the result of negotiations to really figure out what the costs are. And most universities would tell you that even the negotiated indirect cost rates don't cover all of the costs of research.

This is a very wide-ranging question, but going back to Joe's point about the administrative burden, could you maybe walk us through the process of getting an NIH grant? Like, how does it actually work? How long does it take? How many steps do you have to go through? Yeah. So NIH runs three funding cycles a year. Each of them take more than half a year to complete, almost three quarters of a year. So basically, there will be one date where grants are submitted,

Another date where grants are reviewed by a panel of experts from around the country, usually a panel of 25 to 30 scientists with subject matter expertise in the area of the grants. And those are called study sections. And then finally, they'll be reviewed by an advisory council that will basically okay grants for funding.

So here's an example. I have a really talented postdoctoral fellow working in my research group who applied for a career transition award back in the summer.

His grant was reviewed in October by a study section. It got a phenomenal score that should have been funded. His counsel was supposed to meet at the beginning of this month in February, but because no study sections or counsels have been allowed to meet, his grant can't be approved for funding. So there are three of those cycles a year. And right now, I mean, I'm not sure that if your listeners are aware of this, but besides the kinds of things that we're talking about with indirect costs and direct costs,

HHS has blocked NIH from posting in the federal register. And why that matters is in order to hold one of these study sections, these grant review sections, or hold one of these advisory councils, they have to be posted in the federal register at least 15 days ahead by law. So when a judge put a restraining order on the freeze to grants,

HHS got around this bureaucratically by just simply not letting NIH submit those notices. So the whole system has been ground to a halt. Grants that were reviewed like my postdocs last fall can't get approved at council. Grants that should have been reviewed this month can't be reviewed, and who knows whether their councils will meet coming in May when they should.

So right now, labs are really in sort of an existential crisis. I mean, so again, going back to this small business model, labs are businesses that run on very tight margins. And so if I'm going to be running my laboratory on one of these NIH grants, which let's say is four years long, in year three, I would be applying for a renewal of that grant to continue that research.

and remember research that the NIH has already invested in, if that grant can't get reviewed or funded, then I'm turning around to the people in my lab and saying, I don't want to have to do this, but I'm going to have to let you go. So not only is that a real cost in terms of jobs for people who are, again, experts in what they're doing, but you're damaging research that you've already invested in. The whole thing is kind of senseless. That's certainly not government efficiency. Can you

you talk more about what's being frozen right now? So you've just described the stopping of the review process. So theoretically, if this freeze is in place by the time you need your next tranche of funding and it can't happen, then you could have layoffs. What's happening operationally in labs that you know of right now as a result of the overall freeze? Are there specific trials or tests that

or I guess experiments is what a layperson might call them, that had been going on in January that aren't happening right now? So I think there are some clinical trials out of NIH that have been affected directly. For most of us, it's damaging things, but we could still pull back from it being absolutely disastrous if things get turned around very, very soon.

But otherwise, the layoffs are going to include people who take care of research animals. It's going to include the people that make sure that hazardous waste is disposed of safely. And right now, it really depends on each university. A lot of universities have...

begun to either rescind offers for graduate students for the coming fall or basically decide not to have the next class of graduate students or cut it down by 20 to 50 percent. And I think this is something that's important to bring up. So NIH research really does three things, right? It funds the science that we've been talking about. So making drugs like Ozempic or pediatric cancer research.

It funds money in the economy, as I mentioned, so hundreds of thousands of jobs, $93 billion a year in economic activity. But the other thing it does is to train the next generation of research scientists. And I can tell you that the trainees right now, graduate students and postdoctoral fellows, are completely scared and demoralized and wondering whether there is a future for them in science.

And if we lose the next generation of scientific researchers, it's not just going to affect academic research. We train the workforce for the pharmaceutical industry and the biotech industry. This is going to decimate U.S. scientific biomedical research broadly written.

So just on that note, one thing you hear from the Trump administration continuously is this idea that we need to compete with China. And it's certainly true when it comes to electronics technology like semiconductors.

And they say also in the realm of scientific funding. Can you maybe talk a little bit about how the Chinese research model stacks up against the U.S. research model? And I guess how much competition there is currently between the two countries for that younger generation of talent?

Yeah, no, absolutely. As I'm sure you're probably aware, federal investment in science like at NIH and the National Science Foundation after World War II was what drove the U.S.'s enormous growth in the 50s and 60s and really boosted America to the forefront of the world in technology development and science.

And we barely keep pace. I mean, to say that we spend too much money on science is so far from being true that it's crazy. On the other hand, China recognizes what these investments do, and they have been upping and upping the kinds of investments that they make in biotechnology and other technology.

because that is what's going to drive the economic growth of the future. The investments that the U.S. has made in science to date have driven the formation of entire industries,

not just innovations in medicine, but also in engineering and technology, we are going to lose that leadership. You've given these examples of talented postdocs being unsure if they're going to get their funding or the prospect that the next generation of talent who will go into private sector labs is going to be devastated because their education trajectory is off.

One of the arguments for NIH reform is that a lot of NIH grants actually go to established professionals, that there is this hierarchy that it's very hard or very rare to get grants for people under 40. Setting aside the Trump-Elon reforms, do you believe that there are flaws within the existing NIH regime causing money to not go into the most promising areas? So...

I would take issue with what's going on being termed that, but the problem is that there's not enough money in the system. And so those grant cycles that I just mentioned, right? So one of the study sections is going to be evaluating many, many dozens of grants in each cycle. And then there are many study sections that are evaluating different areas of science at current funding levels that

Less than 10% of those grants are going to be able to be funded. Where is the line that I could draw where I could clearly say that these ones are absolutely should be funded and these ones maybe need more work or more thought? That line is more around the 25 to 30%.

So we are really underfunding research. And you're right. When you are underfunding research, there is going to be, if you will, a competitive advantage to established researchers versus junior researchers. But the NIH recognizes that. And so they have put in place a number of different mechanisms to try to alleviate that.

So there are score boosts for early career investigators that help more of them get funded. There are special granting programs that are aimed at those early career investigators. So, I mean, one of the things about NIH is that it's really conscientious about trying to course correct. They are constantly looking at what they're doing and what the outcomes are, and then

consulting with the broader scientific community about where they could find deficiencies or how they could solve particular problems. It's not like all this is going on in a vacuum and nobody's paying attention. That makes a lot of sense to me. I'm just looking at stats. The median age for researcher designated NIH award for the first time had increased since 1995 and is now

according to something that was reported in 2021, over 40 years old. Like government process, corporate processes, whatever, there's always, as you say, there's course correcting, there's awareness of the issues, but awareness is not the same thing as addressing them

And I'm just trying to press on whether there are reasons to be skeptical about the efficacy of the existing system or the ability of the existing system to course correct. Or is this not a number that we should care about at all? Does that not mean anything that the average age of a first time awardee has gone up? Maybe that's not necessarily a bad thing.

Yeah. So, you know, one thing you can say about almost anything this large is it's the best flawed system that we have. You know, the U.S. scientific research enterprise is the envy of the entire world, hands down. The reason for the increase in age has nothing really to do with the NIH itself. And so that's more on science and scientists to some extent. The time to degree for graduate students has been creeping up, how long it takes them to earn their Ph.D.,

and also the time that faculty spend as postdoctoral fellows. And, you know, when I was first starting out as a graduate student in the 90s, there were people who were hired into faculty positions that never did postdoctoral fellows. Then that became almost non-existent. And now there are some programs like the Whitehead Fellows, where you have mentored postdoc positions where they are independent faculty member-like people, but with a little bit more safety net than a typical assistant professor would have.

And so I'm going to swing back to those people that get fired from their laboratories at the NIH two weeks ago. So each one of those people will have spent more than 10 years training for their jobs, generally more than 12 years training, but between graduate school and their postdoctoral fellowships.

Each one of those people was almost certainly supported by NIH funding through those dozen years, whether it be independent fellowships to them personally or funding from their PI's research grants.

So these are people who the U.S. has already made an enormous investment in. And they were successful at getting research laboratory positions at one of the top places in the world, the NIH. So these are the best of the best. And we just fired them by email on a Saturday night. That's a waste of all that money that was spent training those people and the research they were doing. ♪

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You mentioned slim profit margins earlier, and I think this is one of the things that a lot of people struggle with when they talk about public funding for research at elite universities in particular, because you see numbers like, you know, the Harvard Endowment has more than $50 billion and

There are other universities out there with even more. And I guess the question is, why can't universities that are charging incredibly high tuition, that run these massive investment accounts and that also get donations, why can't they fund everything themselves? Okay. So first, I just want to make a correction that it's not profit margins. There's no profit here. It's operating margins, right? It's the ability to keep your laboratory afloat.

So that said, endowments are not this sort of bucket of free funds. Endowments are a collective of money that has been donated by specific donors and earmarked for particular things. And so there are legal requirements that you spend that money on what the donor asked for it to be spent on.

There are a few places. Johns Hopkins is a great example. Bloomberg himself has made investments there that can be spent directly on science. That's making a huge difference there. But in general, at most universities, people who are funding endowments are funding the sports stadium, unfortunately. They're funding financial aid, which is great.

My own university has made enormous strides in having an increase in Pell Grant eligible students, which is super important. But for the most part, they're not general funds that can be used to support anything you want to. Let's get back to operational realities. So some of your research recently, I'm reading an article at Northwestern.edu about Lamprey Eels.

And obviously, as you mentioned with the example of Ozempic and the Gila monster, you know, what seems like sort of pure lab experimentation in biology has the potential to turn into an incredible profit source. But even setting aside that question, OK, let's say you have some new idea. There's something new you want to explore about the biology of eel and eel cells, etc.,

How do you come up with the price? You're applying for a grant. You want to build on some research that you do. Talk to us just about that process of you think you need or you feel you need X money, et cetera. What do you do? How do you blank sheet of paper? You want to do a new experiment and you want NIH money. What does that process look like of coming up with that number? OK, so.

There's coming up with the ideas and coming up with the grant numbers and budget itself. The ideas usually stem from research that you've been doing and are informed by research that other people are doing. Usually, you will get into conversations with other researchers to refine those ideas to really make them to the point where they're shovel-ready for actually doing experiments so you can apply for grant funding for them.

So the NIH has two kinds of granting mechanisms going back since the early 2000s. One is, which has been the main way that people get funding, is called modular grants. And those grants are really a set amount of money. So there's no sort of negotiating for what their actual costs are. It's just that this is the amount of money. And that amount of money has not changed in the last 25 years.

And so while costs for personnel and costs for reagents and everything else has gone up a lot, that amount of grant money has not gone up. What is it? What is it? Are we talking one million? Like what is a what is a module? We're talking about two hundred fifty thousand dollars a year. OK, OK. OK, so not this is not a lot of money.

So if you want more money than that, and more and more people are having to do this because $250,000 is not enough to support a research laboratory anymore, then you have to submit a non-modular budget where you basically have to estimate in excruciating detail the

how many personnel it needs and how much that will cost. What are the actual animal costs? What are the, let's say, sequencing costs for next generation sequencing, genome sequencing? What are the reagent costs, et cetera? Do you need any specialized pieces of equipment?

Attach a quote for me for that to show me exactly how much that piece of equipment will cost. So this is non-trivial. You might argue if you're looking for inefficiencies in the system that making people go into that much detail and then needing people at the NIH to go into a forensic dive onto each of those things is maybe not the most efficient way of doing it, but it's the only way of doing it right now. So it's not that you're sort of pulling some number out of thin air and saying, hey, dude, this is how much money I need to do my research.

It's going to get scrutinized at the university level. We actually have to submit even more detailed budgets than will actually go into the NIH because they want to make sure that we are in compliance so that we don't ever get in trouble with the NIH.

So I get asked for things internally that are even beyond what NIH is going to ask for. And then NIH will get those budgets, and that will get scrutinized before anything gets paid out. And it gets scrutinized in two ways. It gets scrutinized during the grant review process, where the reviewers are asked to weigh in on the budget and whether it's appropriate for the research that is proposed, it

It will be scrutinized by the council, who will do the same thing, and who are increasingly, particularly at the National Institutes of General Medical Sciences, are capping the total amount of money that any one investigator can have. And it will get again scrutinized at the program officer level before those grants are paid out.

I find this so interesting. How do you actually come up with the estimate for some of the costs? And how does the NIH actually go about evaluating whether or not it's reasonable? Because I think about with scientific research, often you're doing something very novel. So going back to the Gila monster example, I mean, how do you know the cost, the reasonable cost of housing like two dozen Gila monsters for a few years while you experiment on them?

You have to do due diligence and figure it out. And it does. It's time consuming. So a lot of what faculty like me spend their time doing is deep diving into these costs and deep diving into the accompanying paperwork and administrative process.

burden, for lack of a better word, that comes with a lot of these mechanisms. But it is the only way to get the funding to do the research. So some things are easy. We know in any given market what a competitive salary is for a scientist at this level or that level, etc. We know, at least at the beginning of the grant, what the costs for the reagents that we know that we're going to need are.

But you're right. As you proceed in the grant, you may require a kind of technology or kinds of reagents that you didn't initially budget for. And that's when you're scrambling to find additional funds to be able to do that. And that's where some of these foundation grants sometimes come in.

I just have one last question. You know, obviously, science is a very broad category, but the thing that excites people from a sort of commercial or return on public spending investment perspective is the connection between science funding often and it turns into a drug or a new therapy of some sort. You mentioned ozempic and anti-cancer drugs and so forth.

We've never really done an episode on the economics of labs in general, etc. And I want to do way more on this because I think it's really important. Can you sort of paint us a general outline of in America right now at the source of original discovery? What is the distribution between sort of what happens between the public sector versus a research institution and then private sector labs?

Yeah, I mean, since the 1950s, this has been an invaluable three-way partnership, right? The government wants to do research, but it knows that it doesn't have the capacity, let's say, to do it all on the NIH's campus. And so it partners with scientific laboratories at universities by providing grant money so that basic research can be done.

The pharmaceutical industry or the biotechnology industry, they don't make investments in that kind of foundational research because there's no exact timeline for when you might get a payoff from that, right? So what they do is look to the universities to provide them with that foundational knowledge that then they can make a startup company or take your promising results on what could be a new drug and fund the clinical trials that are going to see whether it's effective.

And this partnership has been incredibly successful, and it is the reason why the U.S. is a leader in this area worldwide. Just on this point, is there an argument to be made that maybe universities could monetize some of their research better, maybe have higher equity stakes or any equity stakes in promising new drugs in exchange for the work they basically do for big pharma?

Oh, you know, I think you could take that argument even more broadly. So why is it that a drug that was developed at Northwestern, and there's a real example for this, but I'll leave the drug and the person out of it, that was then turned into drugs?

trillions of dollars by a pharmaceutical company. Now, the university did get a cut of that because they had the patent on it. But you know who isn't getting the benefits of it? You. So you are getting charged huge amounts more money for that same drug that was developed using U.S. research funds than someone in Europe is.

That, I think, is where the inefficiencies in the system are. There's so much more I want to do on this. Sometimes you read like a story about like some MIT professor and somehow some biotech was born out of his labs and he retires and is a billionaire. And I want to understand more about the economics of that and how that is allocated. But this was a fantastic introduction to the topic of what's going on. So, Carol Lebon, thank you so much for coming on OutLots.

Happy to have talked with you. Thank you very much. Thanks, Carol. That was great. And I'd be happy to explain Lamprey to you at some point. They frighten me. I think... Yeah, I don't know. Like, I find them very interesting, but I also find them extremely off-putting at the same time. I'm convinced that they are the inspiration for the Demogorgon. Oh, yeah. Yeah, you're right.

Right. They look like them. Absolutely. But they are like a living fossil. They are the closest thing we have to a living example of what the most primitive vertebrate was. And so if you want to understand where you as a human vertebrate comes from, we can look to evolutionary studies using the lamprey. Can we keep this last little bit in? That was actually really good. Thanks, Carol. Yep. Thanks. Bye-bye. Bye-bye.

Tracy, I thought that was a really good introduction to the topic. I will say this, like, I'm sure that someone could walk in here and convince me or at least make a compelling argument that we need radical overhaul to the NIH.

way we do drug discovery or the way we do... Physical shock therapy. Yeah, or just that we really need to totally rethink the way we do science investment in this country. I also think that if the main lever you pull is just less money, and it means that there are going to be people who have worked for 10 years and then their career is derailed, or various labs...

get shut down or in a state of limbo that I'm very skeptical that that alone would turn into better results. Yeah. Well, a couple of things here. So, number one, I liked your plea for billionaire researchers to get in touch with oddlots. So I'll just repeat that. If you are a researcher who has made tons of money off of some invention, then please

Yeah.

through public grants. And I think that's, I mean, to her point, like that is a huge area of inefficiency. It's very easy to look around and find things you don't like about any system.

there's too much paperwork or there are things that slow it down or there is money that is going towards such a nebulous area of science and you find some random example that has no prospect of commercial application. I'm sure all of that exists to an extent. It also seems objectively true that at least at this moment in 2025, the U.S. has the world's most advanced technology.

pharmaceutical and biotech industry. Could it be way better in some sort of like alternate scenario where everything moved faster and more efficiently? It seems plausible. But I think to Carol's point that I really liked is that for the last several decades,

The U.S. has really had the leading edge industry of the world and studying the hard sciences and those sciences have turned into all these sort of commercialized technological breakthroughs. I think people should appreciate what we have currently in this country and understand

understand the interplay between public money, research foundations, and commercial ventures that had put us at the technological frontier. No, absolutely. And the one other thing I would add on is I really like the Gila monster example because this is something else that you see

happen quite a lot when people talk about research studies. So I think Elon Musk has talked about like, oh, all these crazy scientific projects, like having shrimp run on treadmills and things like that. But some of them actually lead to monetizable drugs. And I think the shrimp example, they were actually stress testing marine animals or crustaceans ability to withstand environmental stresses.

So even if the projects sound very niche, like with Lampreys or Gila Monsters, they can have interesting and potentially profitable consequences. I'm never compelled. You know, people love to point out areas of like, look at this. They spent one million dollars to hold a relay race among shrimp, you know, or something like that.

And I'm never compelled by it. I believe that there exists government waste. There probably is even a lot of it. I find those to be like the least compelling examples that people love to say. Maybe it's, but I do think we need to spend more on shrimp doing relay races. You know, it's funny. Whenever I hear Gila monster, sometimes...

So my dad, one of his best friends is called Gila and her husband is Dusty. And I always think that's like the most Texan duo ever, Gila and Dusty. You know what I always think about Gila? Although I see it's actually... I was going to say Gila is one of the few words that was imported into the U.S. language from Southeast Asia. But actually in this case, it has a totally different etymology. It has something to do with the Southwest.

So I thought I knew something, but I don't. Okay. In many such cases. Shall we leave it there? Let's leave it there. This has been another episode of the All Thoughts Podcast. I'm Traci Allaway. You can follow me at Traci Allaway. And I'm Jill Wiesenthal. You can follow me at The Stalwart. Follow our guest, Carol Lebon. She's at Lebon Lab. Follow our producers, Carmen Rodriguez at Carmen Armin, Dashiell Bennett at Dashbot, and Cale Brooks at Cale Brooks.

For more OddLots content, go to Bloomberg.com slash OddLots. We have a blog and a daily newsletter that you can subscribe to. And if you want to chat about all of these topics 24-7, including hard sciences and pharma, go to our Discord, Discord.gg slash OddLots.

And if you enjoy OddLots, if you like it when we talk about scientific research funding and the etymology of the word Gila, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad-free. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening. ♪

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