See what you think of Peter Thiel’s characterization of the drug industry in this piece for Technology Review. Thiel’s a very intelligent guy, and his larger points about technology stalling out make uncomfortable reading, in the best sense. (The famous quote is “We wanted flying cars; instead we got 140 characters”). But take a look at this (emphasis added):
You have to think of companies like Microsoft or Oracle or Hewlett-Packard as fundamentally bets against technology. They keep throwing off profits as long as nothing changes. Microsoft was a technology company in the ’80s and ’90s; in this decade you invest because you’re betting on the world not changing. Pharma companies are bets against innovation because they’re mostly just figuring out ways to extend the lifetime of patents and block small companies. All these companies that start as technological companies become antitechnological in character. Whether the world changes or not might vary from company to company, but if it turns out that these antitechnology companies are going to be good investments, that’s quite bad for our society.
I’d be interested in hearing him revise and extend those remarks, as they say in Washington. My initial reaction was to sit down and write an angry refutation, but I’m having second thoughts. The point about larger companies becoming more cautious is certainly true, and I’ve complained here about drug companies turning to M&A and share buybacks instead of putting that money back into research. I’d say, though, that the big drug companies aren’t so much anti-technology as they are indifferent to it (or as indifferent as they can afford to be).
Even that still sounds harsh – what I mean is that they’d much rather maximize what they have, as opposed to coming up with something else. Line extensions and patent strategies are the most obvious forms of this. Buying someone else’s innovations comes next, because it still avoids the pain and uncertainty of coming up with your own. There’s no big drug company that does only these things, but they all do them to some degree. Share buybacks are probably the most galling form of this, because that’s money that could, in theory, be applied directly to R&D, but is instead being used to prop up the share price.
But Thiel mentions elsewhere in his interview that we could, for example, be finding cures for Alzheimer’s, and we’re not. Eli Lilly, though, is coming close to betting the company on the disease, taking one huge swing after another at it. Thiel’s larger point stands, about how more of the money that’s going into making newer, splashier ways to exchange cat pictures and one-liners over the mobile phone networks could perhaps be applied better (to Alzheimer’s and other things). But it’s not that the industry hasn’t been beating away on these itself.
I worry that the Andy Grove fallacy might be making an appearance again, given Thiel’s background (PayPal, Facebook, LinkedIn). That link has a lot more on that idea, but briefly, it’s the tendency for some people from the computing/IT end of the tech world to ask what the problem is with biomedical research, because it doesn’t improve like computing hardware does. It’s a good day to reference the “No True Scotsman” fallacy, too: sometimes people seem to identify “technology” with computing, and if something doesn’t double in speed and halve in cost every time you turn around, well, that’s not “real” technology. At the very least, it’s not living up to its potential, and there must be something wrong with it.
I also worry that Thiel adduces the Manhattan project, the interstate highway system, and the Apollo program as examples of the sort of thing he’d like to see more of. Not that I have anything against any of those – it’s just that they’re all engineering projects, rather than discovery ones. The interstate system, especially: we know how to build roads, so build bigger ones. The big leap there was the idea that we needed large, standardized ones across the whole country, with limited entrances and exits. (And that was born out of Eisenhower’s experiences driving across the country as the road network formed, and seeing Germany’s autobahns during the war).
But you can say similar things about Apollo: we know that rockets can exist, so build bigger ones that can take people to the moon and back. There were a huge number of challenges along the way, in concept, design, and execution, but the problem was fundamentally different than, say, curing Alzheimer’s. We don’t even know that Alzheimer’s can be cured – we’re just assuming that it can. I really tend to think it can be cured, myself, but since we don’t even know what causes it, that’s a bit of a leap of faith. We’re still making fundamental “who knew?” type discoveries in biochemistry and molecular biology, of the sort that would totally derail most big engineering projects. The Manhattan project is the closest analog of the three mentioned, I’d say, because atomic physics was such a new field (and Oppenheimer had to make some massive changes in direction along the way because of that). But I’ve long felt that the Manhattan project is a poor model, since it’s difficult to reproduce its “Throw unlimited amounts of money and talent at the problem” mode, not to mention the fight-for-the-survival-of-your-civilization aspect.
But all that said, I do have to congratulate Peter Thiel on putting his money down on his ideas, though his investment fund. One of things I’m happiest about in today’s economy, actually, is the way that some of the internet billionaires are spending their money. Overall, I’d say that many of them agree with Thiel that we haven’t discovered a lot of things that we could have, and they’re trying to jump-start that. Good luck to them, and to us.