Current innovation is low, pharma is incentivized to keep squeezing money out of existing drugs.

Anna Rothschild: But Sarpatwari told me pharmaceutical companies aren’t actually incentivized to solve the world’s biggest problems even now.

Ameet Sarpatwari: If you’re looking at what society needs, definitely there is a skew in terms of our system incentivizes the development of products that are less risky to make, and in which payers have an obligation to pay.

Anna Rothschild: In fact, the pharma companies are incentivized to keep making the same drug, just with a few small tweaks.

Ameet Sarpatwari: There’s also this sense that if I can make just a marginally better drug, or maybe it’s frankly not even marginally better, but has longer patents, longer market exclusivity associated with it, it’s worthwhile to make it because the payers have to cover it. So as long as I can convince physicians that they should prescribe this drug, then I’m going to invest in this, rather than investing in let’s say something extraordinarily risky, which has enormous potential upside from a public health standpoint. So you’ve seen a lot of companies over the past two decades shutter their portfolios for central nervous system diseases, so like Alzheimer’s. We want from a public health standpoint them to do the exact opposite. We want to ramp up drug development in this space, but it’s very difficult and so there is not the appropriate incentive to do that.