00:00Precision delivery of medicine
00:02entertainment franchise games absolutely
00:05exploding small modul reactors and the
00:07nuclear Renaissance plus AI moving into
00:11very complex workflows now these were
00:14just a few of the major Tech innovations
00:16that Partners at a16z predicted last
00:19year and our partners are back we just
00:21dropped our list of over 40 plus big
00:24ideas for 2024 a compilation of critical
00:27advancements across all our verticals
00:30from Smart energy grids to Crime
00:31detecting computer vision to
00:33democratizing Miracle drugs like gp1s or
00:36even AI moving from blackbox to clear
00:40boox you can find the full list of 40
00:42plus Builder worthy Pursuits at
00:46az.com bigideas 2024 or you can click
00:50the link in our description below but on
00:53Deck today you will hear directly from
00:55one of our partners as we dive even more
00:57deeply into their big idea what what's
01:00the why now what opportunities and what
01:02challenges are on the horizon and how
01:04can you get involved let's dive
01:07in as a reminder the content here is for
01:10informational purposes only should not
01:12be taken as legal business tax or
01:14investment advice or be used to evaluate
01:16any investment or security and is not
01:18directed at any investors or potential
01:20investors in any a6z fund please note
01:24that a16z and its Affiliates may also
01:26maintain investments in the companies
01:27discussed in this podcast for more
01:30details including a link to our
01:31investments please see
01:38disclosures hi everyone I'm Julie U
01:40General partner on the bioh health Team
01:42here at injuries and Horowitz and this
01:43is my big idea for 2024 it is about
01:46democratizing Miracle drugs in 2023 a
01:50wave of therapies hailed as Miracle
01:52drugs including gp1s and cell and Gene
01:55therapies had a profound impact in
01:58patients lives but our current
02:00healthcare insurance system is just not
02:02set up to bear the cost of these
02:04therapies or to accurately gauge their
02:06value given that some are Curative nor
02:09are are Healthcare Providers prepared to
02:11manage the complex Logistics data
02:13collection and clinical operations
02:15needed to realize the full benefits of
02:18therapies we look forward to seeing
02:20Builders innovating at the intersection
02:22of policy biopharmaceutical
02:24manufacturing financing and clinical
02:27operations so that we have a viable
02:29means to bring these Miracle drugs to
02:31Market without bankrupting or breaking
02:34the system all right Julie so I feel
02:36like this will be a rarity but for
02:38listeners who may be unfamiliar let's
02:41gp1s why are people touting these as
02:43Miracle drugs yes so gp1s aren all the
02:46rage as you're implying um but uh so the
02:49premise of gp1s is that it's a a glp1 is
02:52actually a hormone that is naturally
02:54occurring in our bodies and it's uh
02:56generally secreted in response to food
02:58intake so when we eat um this hormone is
03:01secreted by our intestinal tract and the
03:04main job of that hormone is to help
03:05manage blood sugar levels and so the
03:08initial core use case for the drug form
03:10of this hormone was to treat type two
03:13diabetes and obviously type two diabetes
03:15is a huge um has huge prevalence in the
03:17American population it affects over 11%
03:20of us and so one in 10 of the people
03:22that you know are likely to be diagnosed
03:24with type two diabetes at some point in
03:25their life so um that in of itself is
03:27obviously uh hugely impactful um but uh
03:30I I think probably what's driving more
03:32of the sort of popular awareness of gp1s
03:34is that it has this quote unquote side
03:37effect that um it also has been shown to
03:39lead to weight loss and part of the
03:42reason for that is that it actually
03:43suppresses appetite as part of the
03:45mechanism of action and so um therefore
03:48on the basis of that observation a
03:50subset of gp1s have actually been
03:51approved for treating obesity and you
03:55know obesity opens up the aperture even
03:57broader in terms of the applicability
03:59across Ross our population um sadly it
04:01affects 42% of the American population
04:04which is remarkable and so um and
04:07there's you know there's been a wave of
04:09celebrities on Tik Tok touting you know
04:11their ability to lose the upwards of 20%
04:13of their weight from taking these drugs
04:15and um there's this a popular analogy
04:17that people say gp1s are to obesity what
04:20eyeglasses are to nearsightedness and so
04:23it has you know that level of sort of
04:25societal impact in terms of um fixing a
04:30negative implications for health of our
04:32population so there's been a lot of hype
04:33about these drugs I think The Miracle
04:35part of it you know sort of stems from
04:37two things one is it's um it's it's
04:40weight loss capabilities and obviously
04:42we as a society are just you know
04:43obsessed with weight loss in general and
04:45so that's obviously been one reason that
04:47these drugs are part of the Zeitgeist uh
04:49but then two from a clinical perspective
04:51I think what we are all so excited about
04:53is that there appears to be a really
04:55compelling set of side benefits um
04:58related to all of the comorbidities of
05:00obesity so if you are obese you're very
05:02likely to have other illnesses uh namely
05:05things like cardiovascular disease that
05:07lead to heart attacks and strokes and
05:09you know early death basically and um
05:11there's been a number of recent studies
05:13that show very potentially very
05:16significant benefits of these drugs as
05:18it relates to cardiovascular benefits
05:21which you know as we'll get to has um
05:23very big significant implications uh in
05:25terms of how health insurance companies
05:27would look at this and in general how we
05:30a benefit to to society from a healthare
05:31perspective yeah absolutely and I mean
05:34the case is compelling and I hadn't
05:36heard the eyasses analogy but I think
05:38it's it's pretty spot-on so you
05:40mentioned one in 10 uh for type two
05:44diabetes and 40% 40 plus percent of
05:47Americans are obese how does that
05:49compare to the number of people who are
05:51actually on these drugs and maybe where
05:53does cost or insurance come into play
05:56there as it relates to how many people
05:57have access yeah so just to Baseline um
06:01everyone's uh sort of view on this so
06:03the there's a drug called Humera which
06:05was the bestselling drug ever in the
06:08history of American drug industry and um
06:11that drug was used by roughly 300,000
06:14Americans each year and so you know it
06:16had a huge level of impact um but you
06:18know a fairly finite number of of um
06:20humans who were impacted by it um in the
06:22case of gp1s uh there was a study that
06:25showed in 2022 based on prescription
06:28claims data analysis
06:30that there was roughly uh 3.6 million
06:33prescription claims for gp1s um in that
06:36year and and the the interesting thing
06:38is that I think we're just getting
06:39started right so that's obviously a
06:41small subset of those who are like
06:43clinically eligible technically speaking
06:45um as far as type two diabetes and
06:47obesity go but the insurance policies
06:50for covering these drugs are still very
06:52very immature and that's a lot of the
06:54sort of um recent media attention that's
06:56been paid to these drug this drug class
06:58is that you hear about all these
07:00Insurance denials and you know people
07:02struggling to get coverage for these
07:03these drugs through their employer
07:05sponsored benefit plans and um you know
07:08even on on Medicare and Medicaid and so
07:10there's still a ton of questions about
07:12under what circumstances it actually
07:13makes sense to reimburse for these drugs
07:15because they are very very expensive as
07:17we'll talk about and um you know that
07:20there these drugs also if you stop
07:22taking them will lose are likely to very
07:24much lose their benefits so you could
07:25revert in terms of your your weight loss
07:27and your type two diabetes management
07:29and so there needs to be probably some
07:31degree of demonstration of compliance
07:33with the drugs in order for health
07:35insurance companies to get comfortable
07:37reimbursing them into perpetuity over
07:39the course of your life and so um that
07:41same study that I referred to showed
07:43that it's probably only about a fourth
07:4625% of employer sponsored insurance
07:49plans that today cover these drugs in
07:51terms of the benefit and so you know I
07:53don't think the floodgates have even
07:55been close to be opening on on these
07:57drugs being made accessible to all those
07:59who might actually medically qualify for
08:01them absolutely and I want to get into
08:04where Insurance plays a role but before
08:06we do that you also mentioned Curative
08:08cell and Gene therapies can you give a
08:11couple more examples of those because it
08:12sounds like maybe it's not just glp 1es
08:14that are poised to potentially make a
08:16greater impact in a way that maybe our
08:19providers or insurers aren't quite ready
08:21yeah I would even argue that celling
08:22Gene therapies are probably the more
08:24extreme version of what we just
08:26described with gp1s both in terms of the
08:28miraculous nature of what they do but
08:30also in terms of their the cost burden
08:32and the clinical burden um to our
08:33current Healthcare System so um there
08:36are many you know chronic or fatal
08:38diseases that stem from uh genetic code
08:40mishaps so you might be born with a gene
08:44mutation uh in your actual you know
08:46native genetic code that results in some
08:48kind of debilitating disease um one
08:50common example is Cle cell anemia which
08:53uh in which there's a single gene
08:55mutation that arises during um when
08:58you're born and that impacts the shape
09:00of your red blood cells and has all
09:02sorts of very negative implications on
09:04your health status throughout your life
09:05and you actually have to get sort of um
09:07ongoing blood transfusions basically is
09:09kind of the current state-ofthe-art of
09:10how we treat that so it's both expensive
09:12but also extremely um uh taxing for both
09:17patients and providers um there's also
09:19other types of diseases like cancer in
09:21which mutations might arise during your
09:23life um so after you're born and um and
09:26so historically uh We've we've had a
09:28thesis that you know if you were to be
09:30able to program drugs cells and genes
09:33essentially to be able to address those
09:35kinds of diseases that you could
09:36actually cure uh entirely cure those
09:39diseases so that you know you no longer
09:41have to deal with that for the rest of
09:42your life and so we now are in in an era
09:45where we finally have the first versions
09:47of those diseases or sorry those drugs
09:49that are now available on the market um
09:52these are you know programmable
09:54medicines as we call them so you're
09:56either programming a cell to go Target a
09:59certain cancer uh type uh within your
10:02body and it'll Lally be programmed to
10:04kill those cancer cells um to completely
10:06eradicate it from your body or you can
10:08do a gene therapy which actually changes
10:10the genetic makeup of your body uh so
10:13that the disease that you were born with
10:15is completely gone um and so uh those
10:19genes are generally speaking um you know
10:22orders of magnitude more expensive than
10:24really anything that we've seen uh you
10:26know in society to date and so uh and
10:29they're also very very complex to
10:31administer um and we can talk more about
10:32that but um these effectively the way
10:35I'd put it is that our our current
10:37system just is not designed at all to be
10:40able to handle the adoption and
10:42absorption and access to these kinds of
10:45therapies today the ones that are
10:47available on the market today are are
10:49administered in a very I would say
10:50bespoke and kind of one-off fashion in
10:52terms of how insurance companies cover
10:54them in in terms of how doctors are uh
10:56sort of managing the therapeutic
10:58Administration piece and how patients
11:00are being handled um as far as their
11:02patient Journeys and so it's a huge uh
11:04problem and there there are dozens of
11:06drugs uh of this ilk that are uh
11:09projected to be approved and brought
11:11onto the market in the next several
11:13years and so we think there's a a very
11:16sort of imminent why now Dynamic around
11:18why we need to solve for this sooner
11:20than later yeah and I mean these are the
11:22kind of drugs that we've always wanted
11:24right we've always wished for you use
11:26the term Miracle drugs so why is it that
11:29our Health Care system isn't really
11:31poised to cushion the introduction of
11:33these drugs and the gp1s that we talked
11:35about earlier what really needs to
11:37change in order for the insurers and the
11:40providers and the patients to get access
11:43but also as you said not completely
11:45steamroll or break down the system yeah
11:49so um the original sort of uh you know
11:51blur here refer to two things one is
11:54that we could bankrupt the system and
11:55one is that we could break the system so
11:57on the bankrupting of the system side um
11:59some of these Cene therapies that I
12:01mentioned Can it can be a one-time cost
12:04of you know2 to3 million and sometimes
12:06more and so if I'm a health insurance
12:08company and you're telling me okay I've
12:10got this this individual I obviously
12:12want would love to administer a drug
12:14that can like literally save their life
12:16and change and eradicate this disease
12:17that they would have to um deal with for
12:19the rest of their life but it's going to
12:21cost me $3 Mill million do UPF front and
12:24um as an employer who covers the health
12:26insurance benefit for my employees you
12:28know the tenure of any employee in my
12:30company is maybe 3 to four years on
12:32average um and even lower for tech
12:35companies and so what incentive do I
12:37have to pay you know this upfront fee
12:40for something that will benefit this
12:41person over the entirety of their life
12:43but that person is going to leave my
12:44insurance plan in maybe two or three
12:46years and so um I'm not going to see I'm
12:49not I'm not actually going to reap the
12:50sort of the benefits of that upfront
12:52cost for many many years after that
12:54person's gone and so the current that's
12:56that's kind of the premise of how the
12:58current insurance syst Sy is designed
12:59and why it's not set up to incentivize
13:02people to be willing to pay for these
13:04drugs upfront um and so there needs to
13:07that's you know one huge area where
13:09there just needs to be sort of
13:10fundamental Innovation on just financing
13:13mechanisms to underwrite that risk
13:15profile in such a way that any
13:17individual payer only really has to pay
13:19their fair share let's call it uh while
13:22that person is on their plan and that
13:24you could sort of spread the risk as the
13:26person moves across insurance plans or
13:29create a portable product that sort of
13:30follows that person throughout their
13:32entire life and that just requires a lot
13:34of again Innovation on the underrunning
13:36side in terms of the services that need
13:38to wrap around that and and lots of
13:40other things that uh relate to that so
13:42that that's kind of the financing piece
13:43um and then on the uh the sort of
13:46breaking the system piece um you know
13:49these drugs as I mentioned earlier are
13:50very very complicated to administer so
13:53in the case of cingene therapies which
13:54are probably the most extreme case um
13:57you are literally you know moving cells
14:00from a person's body who has been
14:01diagnosed with cancer you need to
14:03transport them to a manufacturing
14:05facility where you reprogram the cells
14:08uh you genetically engineer them you
14:10regrow those cells and then you package
14:12them to be sent back to a hospital that
14:15is trained and qualified and certified
14:17to actually deliver this highly complex
14:20therapy um the these cells are infused
14:22into the patient and you need to really
14:24like monitor the patient while this is
14:26happening because you might have an
14:27immune response that could be really um
14:30severe and things of that sort uh and
14:32then that patient generally needs to be
14:33monitored in the hospital for many many
14:35weeks um subsequently so that you uh can
14:38see that the drug is working and um and
14:41all of that it requires highly
14:42specialized expertise on the clinical
14:45side on the operational Logistics side
14:48on the manufacturing side there's entire
14:50companies that are being built um just
14:52to create competencies around
14:54manufacturing these kinds of therapies
14:55because it's so Fally different than um
14:58any of our prev sort of you know pill
15:00based therapies or even the injectable
15:01therapies it's it's just a very
15:03different Paradigm and so all of that
15:05whole landscape is also something that
15:07again the current status quo biopharma
15:09um value chain is just not suited to
15:12handle and therefore we need new
15:13capabilities to handle it yeah
15:15absolutely could you speak to maybe the
15:17gp1s a little bit there just in terms of
15:20the therapies that you just mentioned
15:21are Curative and that introduces all
15:23types of questions around like what is a
15:25life worth and you know like who like
15:27you said who gets access and how does
15:29that get kind of rationed over a
15:32lifetime but in the case of something
15:34like a glp1 can you just speak to maybe
15:36like the logistics or Insurance changes
15:39that are required when we're talking
15:41about something that is not necessarily
15:43Curative but certainly helpful and
15:45certainly also has Downstream effects
15:47right if if someone is no longer obese
15:49like you said their cardiovascular risk
15:51is lower but also the way that they
15:53operate in the world what they're buying
15:55what they're involved in also changes so
15:57what are your thoughts around maybe what
15:58needs to happen there yeah so GOP 1s are
16:01also relatively expensive cheaper than
16:03cingene therapies but we're talking you
16:05know $1,000 a month roughly speaking for
16:08this class of drugs and so you know T of
16:10tens of thousands of dollars over the
16:11course of someone's tenure at a given
16:13employer that you would have to cover um
16:16with the hope that again in that in that
16:18time Horizon you are also going to see
16:20the cost savings associated with that
16:22person avoiding certain Downstream
16:24Health implications and so um there is
16:27probably a certain price point at which
16:28it becomes a no-brainer so if you think
16:30about something like a high blood
16:32pressure drug which are these you know
16:33pills that people like you know vast
16:35majority of the population in the US is
16:36popping these pills on a daily basis
16:38they cost um you know maybe a few
16:41dollars um you know per per month uh for
16:44for the the health plan um and so at
16:46that price point it it's really a
16:47no-brainer because you you know that
16:49over the over the you know um whole the
16:52over over a whole population uh you'll
16:55you'll see the financial benefit um the
16:57threshold for that Financial benefit is
16:59relatively low uh and so you know there
17:01is actually hope that there's a whole
17:03pipeline of Cheaper versions of the
17:05current gp1 therapies that are in the
17:07pipeline expected to be approved in the
17:09next several years but you know between
17:11now and then it's really that price
17:12point that makes it really really
17:13challenging to justify um again paying
17:17uh this annual cost when you're not sure
17:20that you're going to actually see the
17:21cost savings associated with it within
17:24the time Horizon uh that the person is
17:26on on that given plan that makes sense
17:29well maybe as a final question we are
17:30looking to 2024 for this big idea so I
17:33guess I'm going to bunch a few questions
17:35in here what Solutions are you already
17:37seeing built maybe what also roadblocks
17:40do you expect on the on the road to
17:43implementing some of these changes and
17:45also where do you think policy might
17:47play a role what do you see really
17:48coming in 2024 yeah so the exciting
17:51thing is that we've already seen uh
17:52quite a number of great entrepreneurs
17:54who are out there building various
17:55aspects of solutions that address um all
17:59the different components of that problem
18:00space that I just described so there are
18:02companies that are uh certainly
18:04innovating on the manufacturing side as
18:05I mentioned um to uh you know just
18:09systematize and really industrialize the
18:11what today is a highly bespoke process
18:13to actually produce these cingene
18:15Therapies in a in a scalable fashion
18:17there are companies who are helping
18:20hospitals and Physicians deliver the of
18:23operational and clinical Logistics
18:24Services related to everything from you
18:26know transporting the drugs to
18:28kind of the Care Management Services
18:30that the patients need um you know both
18:32pre and post the administration of these
18:34drugs even things like hardware for
18:36remote monitoring of these patients um
18:38such that they don't have to stay in the
18:40hospital for many weeks on end um there
18:42are companies really uh addressing the
18:45data aspect of this so one of the um one
18:47of the things that I always think about
18:49as an ex- product person is like imagine
18:50as a product manager if you just never
18:52if you didn't have any closed loop of
18:54data on how your product was being used
18:56in the real world or any feedback from
18:58your end users that is unfortunately
19:00like the State of Affairs for many drugs
19:02that we have on the market today is that
19:03once the drug is prescribed and it's out
19:05there there's not really great ways for
19:07the bio biom manufacturing companies to
19:09get feedback back but in the case of
19:11these really expensive therapies you
19:12obviously it's critical to have uh some
19:15degree of of feedback loop both to
19:17continually justify the price of um of
19:19those therapies and make sure that
19:20they're working but also frankly to
19:22iterate and just make sure that you
19:24understand any of the side effects um
19:26and you know potential implications of
19:27those drugs and so there's companies
19:28that are just building really data
19:30infrastructure to enable The Collection
19:33um in a continuous fashion of how these
19:34drugs are performing post market so and
19:37then the last piece is on the financing
19:38side I think we've seen uh both like
19:41traditional incumbent insurance
19:42companies um trying to spin up new
19:45solutions for this area but they still
19:47tend to be pretty oneoff and not
19:49systematic and scalable across the full
19:51class of drugs that could benefit from
19:53those approaches um and so we are seeing
19:55a number of startups start to say okay
19:57how can we design sort of new fintech
19:58approaches basically um to be able to
20:01spread this risk in a very different way
20:03so so all of those things are out there
20:05today and sort of what I would call kind
20:06of Point solution form and you know I
20:09think the big opportunity and and why
20:10this is kind of a hard problem space to
20:12go after is that there is a bit of a
20:14cold problem right to actually build
20:16kind of a holistic solution that solves
20:18the entirety of this problem space you
20:20actually need to convene payers you need
20:23to convene providers you need to convene
20:25manufacturers and obviously also the
20:26patients themselves who require a ton of
20:28services to get this right and so um I
20:31think that's um that remains sort of the
20:33big unmet need and and huge opportunity
20:35for entrepreneurs to go after is can you
20:38thread the needle on bringing together
20:40these multiple players with a holistic
20:42solution that can actually unlock this
20:44coold start problem to be able to
20:46address this at scale across the entire
20:47industry do you think Innovation will be
20:50able to basically thread that needle and
20:52ensure that people who need these drugs
20:54get them or coming back to that question
20:56around policy do you think that there
20:57needs to to be a role played there which
21:00basically says that you know we need to
21:02get these drugs out to the people that
21:03need them yeah I think policy will
21:06definitely play a critical role in the
21:08long run and we already have seen uh
21:10certain um you know sort of guidance uh
21:13you know briefs come out from various um
21:15government bodies around this particular
21:17issue a lot of requests for feedback uh
21:20from the sort of private sector on how
21:22they should be approaching this but I
21:24think probably namly two bodies so the
21:26FDA um I think there's going to need to
21:28be a lot of change in terms of how they
21:31handle approvals of these drugs because
21:32they are so different and also ongoing
21:34monitoring of these drugs um to be able
21:37to sort of design the right uh type of
21:39approach for for these therapies and
21:41then um CMS which administers Medicare
21:43and Medicade U the government sponsored
21:45Insurance programs in our country uh
21:47they generally tend to be at the tip of
21:49the Spear of any payment Innovation um
21:52for new classes of drugs and new classes
21:55of services and so the expectation is
21:57that they will likely roll out some sort
21:59of program that um you know teaches the
22:02industry uh how they should be
22:04approaching uh these kinds of therapies
22:06and and financing them and so but you
22:08know we're in an election year and so I
22:10think expectations are that that cycle
22:11will be slow um however we are I think
22:15getting to a Tipping Point where both a
22:18number of these kinds of drugs that have
22:20already been approved that are already
22:21on the market that are already crippling
22:23uh individual companies and and
22:25employers and um insurance companies and
22:27even the man ufacturers are already
22:29hitting a Tipping Point where people you
22:31know lots of companies are you know
22:33potentially going to go bankrupt if they
22:35have to pay for these drugs if they have
22:36even one employee who ends up being
22:38eligible for one of these therapies and
22:40so I do think there is a siren Call
22:42already from the industry that will um
22:44sort of ignite uh a cycle of innovation
22:47as we're already seeing as I mentioned
22:49with a lot of startups that are spitting
22:50up in this space so I think it as most
22:52things in healthcare it'll be a
22:53combination of both sort of top- down
22:56regulation and policy combined with uh
22:58some of the bottoms up activity that we
23:00already see starting to happen from
23:01those who are just feeling the pain
23:02today and just need to kick into action
23:05all right I hope you enjoyed this big
23:06idea we do have a lot more on the way
23:09including a new age of Maritime
23:11exploration that takes advantage of AI
23:13and computer Vision Plus AI first games
23:16that never end and whether voice ver
23:18apps May finally be having their Moment
23:21by the way if you want to see our full
23:22list of 40 plus Big Ideas today you can
![How To Succeed As A NEW & YOUNG Realtor [Deals Every Month + Luxury Listings]](/_next/image?url=https%3A%2F%2Fi.ytimg.com%2Fvi%2FrtrRghgTayc%2Fhqdefault.jpg&w=3840&q=75)
