The demonization of Peter Thiel

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According to a recent report in STAT, entrepreneur Peter Thiel is helping President-elect Donald Trump vet individuals to run the FDA, National Institutes of Health and other medical science related institutions. STAT notes:

“Thiel, who has already advanced a candidate to lead the Food and Drug Administration, has been discussing possibilities with other prospective appointees about a variety of health and science jobs. Among others, he recently spoke with Elias Zerhouni, a former director of the National Institutes of Health and president of global research and development for Sanofi, about a top White House science job.”

Thiel has also been speaking to organizations pushing possible candidates, among them a working group that includes FasterCures, Research!America, and the Coalition for Life Sciences.”

The hysterical opposition to Thiel’s role is predictable.

{mosads}Trump has promised to find ways to accelerate the pace of medical innovation. And so groups such as Public Citizen and the Center for American Progress that make a living and maintain a media presence bashing the pharmaceutical industry are howling that Thiel wants to water down the scientific and conflict of interests standards regulating the FDA and NIH, in order to allow Big Pharma to get rich by exposing consumers to dangerous, ineffective treatments.


Case in point: a New York Times article by Matt Richtel and Andrew Pollack harnessing the U.S. taxpayer to fight cancer and make profits, in which partnerships between biotech companies and the NIH are regarded as giveaways to greedy investors who wind up overcharging on drugs developed on the taxpayer dime.

Critics of commercialization cited by the article are both uninformed and hypocritical. For instance:

“If this was not a government-funded cancer treatment — if it was for a new solar technology, for example — it would be scandalous to think that some private investors are reaping massive profits off a taxpayer-funded invention,” said James Love, director of Knowledge Ecology International, an advocacy group concerned with access to medicines.

Except that private investors rarely reap massive profits — when they do, NIH benefits by getting royalties, in addition to the billions reaped from those groups investing in federal research labs. Moreover, the companies partnering with NIH are often small biotech startups that will likely not turn a profit even if a drug developed from a partnership were to succeed. Most drug discovery programs cost hundreds of millions and fail. 

But there’s no mention of these facts in the Times piece.

As for solar and other clean energy technologies, the federal government has invested tens of billions in loans and grants to private companies. National labs are inviting private investors to run their labs and commercialize the technology they are being paid to create. Solyndra goes belly up after $250 million in federal support, but the same critics of NIH partnerships have responded that government investment is necessary because commercializing green energy is risky.

Then there is the assertion that private investment in federal research would not dry up if the government imposed price controls on products that are commercialized. 

“The market is so reliant on the knowledge and know-how that comes out of the government and academic labs,” said Dr. Aaron Kesselheim, director of the Program on Regulation, Therapeutics and Law at Brigham & Women’s Hospital in Boston.

Price curbs, he said, “would not suddenly lead to a total abandonment of this pipeline. It couldn’t possibly.”

Except that it has. Former President Clinton had NIH stick a price control clause in every investment or partnership private companies made with federal labs in 1993. Thereafter, as a study of such controls concluded, private companies stopped partnership with NIH:

“Requiring direct financial recoupment of the federal investment in biomedical research can potentially impede the development of promising technologies by causing industry to be unwilling to license federally funded technologies. The ‘reasonable pricing’ provisions that NIH once required in all CRADA and exclusive license negotiations did just that.” 

The source of that report: The NIH.

From what I know of Mr. Thiel and his investments in healthcare, he is concerned that the risk avoidance permeating government regulation of medical science is a product of hostility to private investment and profit. He has a good case. NIH investigators can’t start or consult for new companies while at the agency. Meanwhile, academic research funded by NIH is penalized if it has commercial potential. And too often research conducted by NIH and with NIH funding is unoriginal or unimaginative.

In this regard Thiel agrees with any number of leading American researchers, including Craig Venter and the current NIH director. He has invested millions in personalized medicine and developing treatments to correct the kind of cellular aging and inflammation underlying Alzheimer’s. The companies he has supported inspired and sustained President Obama’s Precision Medicine and Alzheimer’s initiatives. The fact that journalists are ridiculing Thiel’s investments in medical research as quackery reveals their ignorance for the need for such investigations.

With regard to the FDA, Thiel is not the first person to suggest that the FDA’s regulatory mechanisms, which were developed in 1960 and still rely on 19th science methods, should move into the 21st century. The FDA itself has a Critical Path Initiative to support such a move. Nor is he the first person to suggest that, rather than forcing people to die and suffer while FDA-mandated studies are conducted, medicines demonstrating a clear clinical benefit in patients should be made available and then followed in the real world. 

Indeed, such an approach has been used to approve drugs for HIV and Ebola and is used regularly to evaluate breakthrough medicines for cancer and other fatal diseases. This is the approach enshrined and funded through the 21st Century Cures Act. But then again, the malcontents interviewed in the New York Times article were also vocal critics of that legislation.

The hysterical reaction to Peter Thiel reflects the belief that the commercialization of medical science is a source of social injustice. As economist Deirdre McCloskey notes, critics of market-generated innovation ignore the “enormous actual improvement going on at the time. We can (always) do better, the left declares. We should (always) pass more laws. Any problem (always) requires more regulation. We should (always) pursue a fanciful ideal, proven wrong repeatedly in socialist experiments, making an imagined perfect the enemy of the actual pretty good.” 

Whether he knew it or not, Thiel is the enemy of disingenuous proponents of a government-dictated perfection. And the enemy of the enemies of medical progress is my friend. And yours.


Robert Goldberg is vice president of the Center for Medicine in the Public Interest in New York City.

The views of Contributors are their own and are not the views of The Hill.

Tags Donald Trump FDA Health National Institutes of Health Pharmaceutical industry

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