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CHAPTERS
- 0:00 – 2:35
Big Ideas 2024 Intro and Julie Yoo's Thesis
Steph Smith introduces the a16z Big Ideas for 2024 list. Julie Yoo then states her big idea: democratizing miracle drugs like GLP-1s and cell and gene therapies, which the insurance system and providers are not set up to handle.
- •a16z released a list of 40+ big ideas for 2024
- •Julie Yoo is a General Partner on the BioHealth team
- •GLP-1s and cell and gene therapies had a profound impact on patients in 2023
- •Insurance isn't set up to bear their cost or gauge the value of curative therapies
- •Builders are sought at the intersection of policy, manufacturing, financing, and clinical operations
- 2:35 – 5:59
Why GLP-1s Are Called Miracle Drugs
Julie Yoo explains that a GLP-1 is a naturally occurring hormone that manages blood sugar, first used for type 2 diabetes. Appetite suppression and weight loss drove obesity approvals and popular attention, along with promising cardiovascular benefits.
- •GLP-1 is a hormone secreted in response to food intake that helps manage blood sugar
- •Type 2 diabetes affects over 11% of Americans; obesity affects 42%
- •The drugs suppress appetite and lead to weight loss, with celebrities touting up to 20% loss
- •Analogy: GLP-1s are to obesity what eyeglasses are to nearsightedness
- •Studies suggest cardiovascular benefits, which matters to insurers
- 5:59 – 8:01
GLP-1 Adoption and Patchy Insurance Coverage
Yoo compares GLP-1 usage to Humira and cites 3.6 million prescription claims in 2022. Coverage policies remain immature, with insurance denials and only about a quarter of employer plans covering the drugs.
- •Humira, the best-selling drug ever, was used by roughly 300,000 Americans a year
- •About 3.6 million GLP-1 prescription claims in 2022
- •Only about 25% of employer-sponsored plans cover these drugs
- •Benefits may fade if patients stop, so insurers want demonstrated compliance
- 8:01 – 11:21
Curative Cell and Gene Therapies
Yoo describes cell and gene therapies as an even more extreme case than GLP-1s. These programmable medicines could cure genetic diseases and cancers, but cost orders of magnitude more and are administered in bespoke ways, with dozens more expected soon.
- •Sickle cell anemia is currently treated with ongoing blood transfusions
- •Cells can be programmed to kill cancer, or genes changed to remove an inherited disease
- •Costs are orders of magnitude higher than anything seen before
- •Dozens of such drugs are projected to be approved in the next several years
- 11:21 – 15:16
Bankrupting and Breaking the System
Steph Smith asks what must change for insurers, providers, and patients. Yoo says the system could be bankrupted by one-time costs of $2-3 million that employers have little incentive to pay given short employee tenure, and broken by the complexity of administering these therapies.
- •Upfront costs of $2-3 million clash with 3-4 year average employee tenure
- •New financing and underwriting mechanisms could spread risk or follow patients across plans
- •Cell therapy requires removing cells, engineering them at a manufacturing facility, and infusing them at a certified hospital
- •Patients need weeks of monitoring afterward
- •The biopharma value chain needs new capabilities
- 15:16 – 17:28
GLP-1 Pricing and the Cost-Savings Time Horizon
Smith asks about the logistics and insurance changes for non-curative GLP-1s. Yoo says that at roughly $1,000 a month, payers can't be sure of savings within the time someone is on their plan, though cheaper versions are in the pipeline.
- •GLP-1s cost roughly $1,000 a month
- •Tens of thousands of dollars over an employee's tenure must be covered
- •Cheap blood pressure pills show the price point at which coverage is a no-brainer
- •Cheaper GLP-1 versions are expected to be approved in coming years
- 17:28 – 19:52
Startups Building Solutions
Asked what solutions are emerging, Yoo outlines startups working on manufacturing, clinical and operational logistics, remote monitoring, post-market data infrastructure, and fintech approaches to financing. Most are point solutions today.
- •Companies are industrializing the bespoke manufacturing of cell and gene therapies
- •Others help hospitals with transport, care management, and remote monitoring hardware
- •Data infrastructure can supply a post-market feedback loop on performance and side effects
- •Startups are designing fintech approaches to spread risk
- 19:52 – 20:48
The Cold Start Problem and Entrepreneurial Opportunity
Yoo says the big unmet need is a holistic solution, which faces a cold start problem. Such a solution must bring together payers, providers, manufacturers, and patients.
- •Existing solutions are point solutions
- •A holistic solution must convene payers, providers, manufacturers, and patients
- •Threading that needle is the large opportunity for entrepreneurs
- 20:48 – 23:05
Policy, the FDA, CMS, and the Outlook for 2024
Smith asks whether innovation or policy will ensure access. Yoo says the FDA must change approval and monitoring, and CMS typically leads payment innovation, though an election year may slow things. Mounting pressure on companies and insurers will drive bottom-up innovation alongside regulation.
- •The FDA will need to change how it approves and monitors these therapies
- •CMS tends to be at the tip of the spear of payment innovation
- •Election year expectations are for a slow policy cycle
- •Companies facing possible bankruptcy from even one eligible employee are creating a siren call
- •Expect a mix of top-down policy and bottom-up startup activity
- 23:05 – 23:53
Wrap-Up and Upcoming Big Ideas
Smith closes the episode and previews upcoming Big Ideas, including maritime exploration with AI and computer vision, never-ending AI games, and voice-first apps. She points listeners to the full list at a16z.com/bigideas2024.
- •More Big Ideas episodes are on the way
- •Previewed topics include maritime exploration, AI-verse games, and voice-first apps
- •The full list of 40+ ideas is at a16z.com/bigideas2024
