Dear clients and friends: Given your interest in health and medicine, we would like to share with you our collection of the most interesting perspectives on our industry's trends and developments. We are happy to share them with you — and hope you share your thoughts with us.

1. Hallucinating Drugs

Can AI really accelerate drug discovery? Or will its infamous hallucinations lead to tangerine trees and marmalade skies? Natureenters the debate and calls for a “reality check”:

The good: A report released in June and co-authored by BCG and the research funder Wellcome, says that AI could yield “time and cost savings of at least 25–50%” in drug discovery up to the preclinical stage.
    
The bad: ChatGPT sometimes fabricates answers; in drug discovery, the equivalent problem leads [AI] to suggest substances that are impossible to make.

The ugly: Pharmaceutical companies have the means to make and test the molecules suggested by their AI systems. However, they tend to keep their results secret, partly to avoid being ‘scooped’ by rivals. The necessity of rigour, safety, efficacy and trust in new drugs means that a way forwards must be found.

2. On a More ProsAIc Note…

​​​​​…AI’s greatest pharma application may not be molecule discovery, but the quotidian grunt-work of getting a clinical trial off the ground: 

Companies are training AI to scan billions of public health records, prescription data, medical insurance claims and their internal data to find trial patients – in some cases halving the time it takes to sign them up. The FDA said it had received about 300 applications that incorporate AI or machine learning in drug development from 2016 through 2022…most were for the use of AI at some point in the clinical development stage.

3. Woahzempic

The Atlantic weighs the market effects of Ozempic and Wegovy. The heft ripples not only through far distant industries, but it’s tilted the scales of the entire Danish economy:

 The billions of dollars in profits that [Ozempic and Wegovy are] now bringing home—$5.7 billion in the first half of this year—and converting into Danish krone has driven up the value of the currency, which in turn has allowed Denmark’s central bank to keep interest rates lower than it otherwise might have done. Novo Nordisk has also become Denmark’s biggest taxpayer by far: In 2022, it handed over 9 billion krone (about $1.3 billion) in corporate tax; the number will be even higher this year.

Some stock analysts have even suggested that the drugs’ popularity might boost airline profits—because their passengers will weigh less in the future.

4. The Pharmacist’s Dilemma

To the list of ailments affecting the US healthcare system, add a new one: pharmacist burnout. As Walgreen’s and CVS employees threaten to strike over staffing shortages and difficult working conditions, both companies may be suffering self-inflicted wounds:

CVS, Walgreens, and Walmart are encouraging customers to seek non-emergency care at their locations…“There’s been tremendous consumer demand for those services,” [said] Dr. Peter Bonis, the chief medical officer at Wolters Kluwer Health. But retail pharmacies haven’t done much to address the evolving demands on employees, he said. That puts a tremendous amount of strain on the existing staff.

And: making matters more difficult, CVS pharmacies are experiencing “the same level of demand that we were in 2021” for COVID shots, said CVS CEO Karen Lynch.

5. Pharma’s Dose of Optimism

It’s not new or interesting to say that pharma is stuck in the mud as the tech sector soars. Most loved companies? Tech. Most unicorns? Tech. Poster child for capitalist greed? Pharma, with tech catching up (thanks, Elon!). Here at HLG, we don’t buy this narrative, but we do occasionally admire the unabashed optimism of tech leaders, and we think it offers lessons for how we should talk about the pharma industry. Consider VC titan Marc Andreessen’s latest “manifesto” extolling the power of markets and technology:   

We believe technology is a lever on the world – the way to make more with less.

Economists measure technological progress as productivity growth: How much more we can produce each year with fewer inputs, fewer raw materials. Productivity growth, powered by technology, is the main driver of economic growth, wage growth, and the creation of new industries and new jobs, as people and capital are continuously freed to do more important, valuable things than in the past. 

We believe this is the story of the material development of our civilization; this is why we are not still living in mud huts, eking out a meager survival and waiting for nature to kill us. 

We believe this is why our descendants will live in the stars.

We believe that there is no material problem – whether created by nature or by technology – that cannot be solved with more technology.