Impact Markets for Open Source Medicines

Transcript

this has been such an amazing conference uh and we are going to close out the talks here at the lunar stage with saur the meles yes give him a round of applause he comes on stage got overconfident guys all right yeah thanks for hanging out until the end so um but hopefully um you guys might find this kind of interesting uh so from a an area of cryptos called dii has anyone heard of dii few people okay so yeah basically dii is looking at how do we fund uh science in a way that helps solve a lot

of the current problems with science that we're we're generally interested in the funding side of things there are other areas of D which are more about publishing and things like that but today um we're going to be talking about uh funding uh science uh basically medicines as a public good so public good medicine um hyps or retroactive public goods funding so there we got someone on the corner yeah all right cool um so it's basically yeah that's that's what okay that okay cool well uh so at the moment um with Healthcare we've got this massive crisis going on particularly in the state there's

basically it's over 20% of US GDP is being spent on health care and you've got like an aging baby boomer population so um yeah and and also essentially the the prices that people are paying to get Healthcare like their health insurance is Raising Rising faster than their than their wages and it's estimated that like they might exceed the you know you might be paying all of your wages and paying for U medicines also at the same time um making new drugs is getting more and more and more expensive over time and part of that is basically to do with the fact that the farm compan is always trying to find new patentable molecules and there's only like so many things

that basically we can take in the human body without killing us and so as a result like um we have it's getting more and more expensive it's called e rooms law basically uh it's mors law in Reverse where drugs are getting more and more expensive over time uh and as I was saying like there's extreme Financial toxicity like new drugs are over 200 Grand on average per year um if you get cancer in the US 42% of uh cancer patients will lose everything they own within 2 years um uh medical debts are the main reason for medical bankrupt uh General bankruptcies in the states um and often a lot of the

new drugs are not found to be any more effective than the old drugs so um not a lot of innovation going on and also there's not a lot of um uh bargaining power for for companies basically to try and get the prices down just because things are so expensive to produce and and particularly outside of the US it just means that we don't really get we can't afford the new drugs um and so there's this incentive problem basically with um uh drug development at the moment where drug companies will not fund um clinical trials for what they call generic drugs or off-patent drugs because there is no way that they can get a profit out of them so you know not

to get all controversial but you know you guys might have heard of icton hydroxy chorin things like that people talking about how that's a CO treatment um so this sort of thing basically ends up creating this big problem where these things get publicly funded but the clinical trials are too small everyone's sort of arguing and basically private pharmaceutical companies will not touch that area they don't get into it because there's no way for them to make any money out of it so this is the the main cause they've got this thing called a patent Cliff um so my background I'm a patent attorney but also uh do like so IP but you know I'm the the one area patents are really really relied on is the pharmaceutical Industries because that's the only way that they can

basically make their money back and they basically patent a new version of a molecule like so a brand new molecule and they can charge a very very high price then as soon as that patent Runs Out basically the price of the um drug will just plummet because they start making it India and China just becomes like an industrial chemical and so basically yeah you've got a lot of um yeah as soon as the the patent on the drug runs out there's no more incentives to find to research that drug and it might be useful for more than one use uh so this's huge opportunity as well like um about $15 trillion worth of savings available from um use of of off-patent drugs there's around you know

like could be around 10,000 but at least 3,000 and then there's a bunch of neutrals as well but none of this these areas are basically looked at by private pharmaceutical companies and so the issue is that yeah generic drugs essentially finding new uses for generic drugs are essentially public goods so if I publish a protocol that shows how to use a you know an off-patent drug to treat uh cancer there is no way that I can stop other people from using that um treatment as well because they can just buy the drug uh from India or China and do the same protocol so essentially the information around um public goods is a uh sorry information about new uses for generic

drugs are public is a is a public good so it's public good problem and um and also in order as as I was saying in order for doctors and patients to actually be able to be confident that these drugs are going to work um they need to have the highest level of evidence which is these things called randomized control trials basically you get half of your patients you put them on one drug half of them you put on like a control and you look at how their outcomes work but unfortunately those things are very expensive and that's the reason why only really private pharmaceutical companies are the only ones that will do very large uh clinical trials um and also the ones that need to get FDA approval so as I was saying also there huge market failure uh a new drug might

cost billions of dollars take over 15 years but if you're looking at existing drugs and you want to try and find new uses for them you could actually get uh a new use within like say 3 years you get FDA approved or even less and it might only cost like a uh yeah basically a 100th of the of the price so and as I was saying this is just a similar thing um we're talking about our model but yeah you you might basically you you get get through the FDA approval a lot faster and as I was saying there is massive cost savings for generics because they're basically cents on the dollar um that's sort of essentially chemicals so massive like cost savings but no way to capture any of that

value so you know coming here people think about uh public goods funding and uh donations and grant funding and then we got quadratic funding through like gitcoin but you know this could be a really really good use case for retroactive public goods funding essentially um yeah so uh again we were talking about hypers certs um that's something we're working on with um uh gitcoin they've basically come up with this new project where essentially a hypers cert is almost like a carbon credit but for funding public goods so um and essentially you can make it any kind of um public good you want and that could include uh something something

medical and in my mind um health is probably one of the most important use cases for crypto I think for hypers Sears because you know even with carbon credits you'll get people like saying oh well you know climate change isn't real it's a big conspiracy or whatever but I think everyone can agree that you know being healthy is a good thing and that would be you know if we had a lowcost treatment that could benefit you know people in middle and low-income countries and high inome countries that would be a net good thing and a pretty good uh this case for for um uh this hypur um concept that's a little bit more complicated obviously the the uh hypar framework basically they have um

an agreement that there's an imp there's there's an impact so you can measure any way you want the impact and one of ways that we would say measure impact would be to say there's a a clinical trial that was effective and you have a number of impact points assigned to hyper Sur um according to how well your clinical trial does and then you know you have evaluators and that's done through obviously through the clinical trial and then that way the people that basically fund that clinical trial which would traditionally probably not be farma but like could be impact investors will get an outcome payment and so this is similar to to what we're also looking at which is a a way of simplifying this whole that model

is just to is to call it a pay for Success contract or essentially like a prize or a bounty basically so you know you have a payer say if you do this public good if you prove that this off patent drug will work then we will pay you X you know $10 million let's say and then on that basis uh there might be a lot of outcome payments coming out of the fund and then you would have an investor basically investing in the clinical trials and the payer doesn't take any risk and then but the investor will fund the researchers and if the research is successful they get an outcome payment so this one is something that we're quite interested I'll just talk about it briefly but there's also a way for these clinical trials to basically be funded out of immediate

cost savings so I'm really excited by this particular idea Interventional pharmacoeconomics it's even worse than my surname but it's actually it's pretty amazing it's a way of funding clinical trials out of immediate cost savings so if you can imagine there's a very expensive drug like um I always use es ketamine and esketamine as an example so ketamine is a good treatment for treatment risk of depression esketamine is around $50,000 a year it's the patented version if you just put half of your patients on ketamine half of the patients on esketamine every patient on ketamine is like a say $50,000 cost saving or maybe $100,000 for another drug and those cost savings are basically used to pay for the clinical

trial so again it's a it's a way to use Financial Innovation to to do finance and I think it's good use case for for crypto as well um there's a lot of repurposing opportunities um or just different kinds of drugs um you for breast cancer floxin was an interesting one for Co they did a trial in Brazil 10,000 people and they found that this drug would reduce risk of death by 90% it's a very cheap drug $10 a course it's as effective as this other pented drug created by mer which was called mol pen which the US government paid $1 billion for um UK paid another billion dollars you know and and fluvoxamine is just as effective so it sort of shows that that

there sort of perverse incentives uh also in psychedelics cannabis these these are all very lowcost treatments cannabis could be a very effective treatment um help with chronic pain uh siloc also could be very useful for major depression um but of course very low cost and so no private incentives do that research so this is kind of the idea of what we're trying to do which is build our call Medical impact down but Essen it's like a prize fund you'll sell medical impact nfts you say raise say $510 million and the prize fund 20% gets paid out every year and on the other side so that's the retroactive funding coming down and then there's prospective funding basically investors

is basically funding clinical trials and if the clinical trials are successful then that um we put them into IP nfts that's something we're that molecule um they AI organization working on the ipft framework basically you can uh have nfts that um link to clinical trial data and then um then you can invest or or treatment protocol let's say for an off-patent drug and then if those are successful they convert into hybrid Sears and then they're eligible for outcome payments under the prize fund and so the advantages with traditional grant funding is that the grant funer doesn't need to take on the risk of failed clinical trials so with this um you know you have basically a

transfer of risk to the public public markets who are willing to take on risk and the traditional funders don't have to take on risk they only pay for Success so it's uh potentially a lot more efficient than just grant funding also uh yeah with I IP nfts you can have fractionalized ownership um on trade trading of clinical trial data so you can sort of trade these things on the public markets um and then yeah create a a market for something that hasn't existed a little bit like as I was saying before like carbon credits but if you can imagine like a carbon credit for open source medicines um you know and then creating like a market for that kind of stuff um and then Dows uh can can basically essentially provide a way for this

particularly if it's quite disruptive for it to become um you know relatively autonomous and and something that might be difficult for for incumbent um organizations to sort of shut down and have it so it's sort of um yeah it's a it's a way of yeah protecting against existential threat uh so yeah I think personally I think funding public good medicin could should be a really good use case for for nfts Beyond just you know visual display and trading art um no offense to any any ape holders out there but um yeah I think that that's that's one of the ideas that we have is basically to purchase an nft that represents

successful clinical trial data and that that will be paid um will be paid for successful clinical trials maybe a dynamic nft that changes as soon as clinical trials become successful and uh something like that we've been working with with v Dow um so they're a uh a da a d project um probably one of the the main ones um they're really focused on longevity but essentially they're just a fund and they're kind of looking at the more traditional sort of um funding uh TR traditional drug development through patents but we're also working with them on the idea of using pay for success and this open source um ipf idea and to

basically fund um open source longevity medicines because basically most of the data around um longevity drugs at the moment is around off-patent drugs so things like rap and M nmn um foran Resveratrol vitamin D um NR all these drugs are off patent and you know they could potentially there could be treatment protocols that might improve healthy lifespan by sort of five you know 10 20% even um but there's no private incentives to do this research and we might be sort of 10 to 15 years away before we get a uh patented um longevity medicine which ironically might not be any better than these these existing off- patent drugs so could be some massive you know if you can improve

uh I don't know I've heard some numbers been thrown around but definitely trillions of dollars worth of added value to society and economic benefits if you can sort of improve healthy lifespan by sort of 5 years or something like that um so that's something we're working on with with V's longevity prize looking potentially at a generic drug repurposing prize and uh Dr Brad Stanfield he's a New Zealander as well he's looking at rap and plus exercise and for improving um uh strength um so you know you this would be a use case to to basically have the prize as an incentive and then there could be an ipft that's issued to Brad and that that would enable him to raise the money and

if the clinical trial is successful he'll get a payout from that uh prize um it's something else we're really interested in is open psychedelic medicine nfts um we've got like a white uh like an allow list on our website if you guys want to check it out um but again so as I was saying there's some very lowcost um treatments for depression that's psychedelics very so ketamine super super cheap $2 a dose basically um Silas cin also very low cost um and and no real private incentives to do this research and and these this could benefit um a lot of people so um yeah that's the ending my talk and if anyone has any

questions I've got another five [Applause] minutes n class what help do you need to advance this um well I think you know basically getting the word out like obviously so that's getting a if you know if you guys are interested there's the white list the LA list is on that page um I think getting people to talk about it like ultimately the the big problem with anything is um with these issues is funding and getting a source of retroactive funding so you know people that are interested in longevity for

instance or interested in mental health um the benefit of uh retroactive funding is you don't actually have to if you were going to give that money as a grant you're taking on all the risk of of failure whereas with this if you could just stake you know the funds it could sit there as a as a um as a prize but yeah I think that's the main issue is and particularly I mean optimism is also working on retroactive public goods funding as well so we're going to reach out to them um but yeah it's that's typically the issue with impact markets is finding a retroactive funer that's basically willing to seed seed the market okay the biggest unknown or

unsolved problems um it for for creating uh impact markets or yeah um well there's some there's some well I wouldn't say there's a lot of unsolved problems Beyond raising the funds but there's some potentially regulatory issues around whether these IP nfts are considered um uh are considered Securities but I personally think that it's possible to separate the IP nfts which will be invested by um impact investors and then have these medical impact nfts which are definitely not Securities they're basically just people fundraising and putting money to get an outcome and so I

think from that yeah you can refence a lot of regulatory risk um obviously yeah it hasn't been done before so it would be a new thing um uh you know you want also want to make sure that there's uh that the rules are very clear there's no arguments about whether somebody has achieved the prize or outcome you know there might be some disputes around whether people think think they've won a prize or or whether they're eligible to receive an outcome payment or not but that can be managed just by having really clear um criteria um but yeah it's uh but it's it's a new kind of area impact markets

generally I think is something that um we've been talking about a lot and particularly for funding science um but it hasn't really been rolled out yet and it's it's an interesting alternative so I did my thesis on alter Al natives to the patent system for for medicines and the idea of prizes as alternative to patents has been talked about sort of since even Russia you know 100 years ago has been talking about using prizes instead of patents but no one's really done that yet and rolled it out so there's actually in the states they have the US government government agencies have the right to do prizes up to $50 million without Congress approval so there's they they kind of would join with X prize which is this kind of

private organization do prizes um and but yeah for whatever reason I think people think of prizes as like something you go to the fear and you get a prize and it's not seen as like a serious policy lever so yeah just a bit of inera I think mainly also institutional inertia cool all right thanks [Applause] guys and