Freakonomics Radio - 664. Are Thousands of Medical Cures Hiding in Plain Sight?

Episode Date: February 20, 2026

Existing drugs can sometimes be repurposed to treat rare diseases. But making that match can be hard — and the financial incentives are weak. Guest host Steve Levitt tries to solve the puzzle.   SOURCES: Chris Snyder, professor of economics at Dartmouth College. David Fajgenbaum, co-founder and president of Every Cure, physician-scientist at the University of Pennsylvania. Heather Stone, health science policy analyst at the Food & Drug Administration. Sarrin Chethik, senior policy analyst at the Market Shaping Accelerator.   RESOURCES: Chasing My Cure: A Doctor's Race to Turn Hope into Action; A Memoir, by David Fajgenbaum (2019). Strong Medicine: Creating Incentives for Pharmaceutical Research on Neglected Diseases, by Michael Kremer and Rachel Glennerster (2016). Market Shaping Accelerator. CURE ID Registry. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

There is a horrible infectious disease that you have probably never heard of. It's called balaumuthia. It's basically your brain-eating amoeba. They don't really know how it's transmitted probably through some sort of soil exposure. It causes encephalitis, which is swelling in parts of the brain. It can kill you in relatively short order. It's extremely rare, and so there's been very little study of it. That is Heather Stone.

She's a health science policy analyst in the Food and Drug Administration. The FDA has not approved any treatments for balamuthia, but that doesn't necessarily mean there aren't any treatments. Three or four years ago, a clinician in San Francisco at University of California treated the first patient with a drug called nitoxylene, which had been approved in Europe for 50 years for urinary tract infections. One pre-clinical study had shown off-the-chart, meevacidal activity that nobody had ever known about.

You might not think that a UTI drug could treat a brain-eating amoeba, but biochemistry can surprise you. A couple of years later, I got a call from a mother of a young girl who had been infected with Balamuthia and was not expected to survive, and she was desperately trying to get a hold of nitroxylene. I was able to help get what's called an emergency I&D, an investigational new drug application. because the drug is not approved in the U.S., but it's approved in Europe, you have to get special permission from the FDA to use the drug. They sent the drug and Elena had a pretty remarkable recovery. Now, I mean, it's not a miracle cure. There have been other patients who have received the treatment who have not survived,

but for a disease that had a 90% fatality rate, to have two patients survive like that was pretty remarkable. There are 18,000 known human diseases, but only about a quarter of them have an FDA-approved treatment. So is the story of Balamuthia a story that could be replicated? How many more things are there that we could potentially uncover to save lives today? Because these drugs are already at the pharmacy. They're already manufactured. They're already available.

Today on Freakonomics Radio, the economics of repurposed drugs with a special guest host, Steve Levin, My Freakonomics friend and co-author, who is a professor emeritus at the University of Chicago, and that episode starts now. This is Freakonomics Radio, the podcast that explores the hidden side of everything with your guest host, Steve Levitt. Hi, I'm Steve Levitt, and I'd like you to meet a doctor with an unusual life story. My name is David Faganbaum, and I'm co-founder president of Every Cure and also a physician scientist at the University of Pennsylvania. David Fagenbaum grew up in North Carolina, his parents were from Trinidad, and his father was a surgeon. But he didn't always think that medicine would be his chosen path.

When I was about eight or nine years old, I decided I wanted to become a Division I college quarterback. For the next nine or ten years, that's literally all I thought about. My walls were covered with poster boards, with how fast I could run, how far I could throw a football. And I was just completely 100% laser-focused on this dream of being a college quarterback. And it turned out, I mean, you did it. You took the team to the state finals two years in a row, right? That's right, yes. But you didn't finish the story, and we didn't win either time.

And then your senior year, you broke your collarbone. And it looked like the end, right? That's right, yeah. It was the first scrimmage of my senior year. My dad's an orthopedic surgeon. I got a concussion on the play, and my dad came down to the sidelines, and he put his hand under my shoulder pads, and he felt my collarbone, and he said, David, you're never going to play football again. And I was like, wait, what?

Actually, he operated on my shoulder, and I was back on the field about five weeks later, and I ended up being okay my senior year, not very good. I never really played the same again after I broke my collarbone. You get recruited to play quarterback at Georgetown, but almost as soon as you get to Georgetown, your mom is diagnosed with brain cancer and turns your life upside down. That's right. It broke me to my core. Probably the most difficult moment of my life was hearing my dad telling me that my mom had brain cancer.

She was amazing. She was the most incredible person, and it shattered my belief in what was, fair and right in the world, it also immediately shattered my focus on football. The moment that I learned my mom had brain cancer, and I started seeing what she was going through and started seeing these doctors who were trying to save her life, I just said, I've got to do this. This is what I have to spend my life doing. I need to take the same focus that I've had for the last 10 years on football, and it's got to go towards helping to take care of patients like my mom. So you didn't plan I'm being a doctor until your mom got sick. Is that right? That's right. I was very interested in sports and

eating well, nutrition, health, but not necessarily medicine. Once I saw my mom's illness, and then once I learned that there were these horrible diseases out there like brain cancer, where there are no treatments. I just said, well, I got to spend my life trying to find them. So you did go to med school, and then you all but died from a rare disease. Could you tell me about that? I was on an OB-Juan rotation, and over the course of just a couple weeks, I went from being in really top shape and really healthy to being critically ill. It started out first as feeling more tired than I ever felt before. During med school, we're usually all pretty tired because things are so busy,

but it was a tiredness that I never felt before, and I noticed enlarged lymph nodes in my neck, and I started getting horrible abdominal pain. I took a medical school exam, and then I went down the hall from my med school exam to the emergency department and asked for them to do blood work for me, and they told me that my liver, my kidneys, and my bone marrow, we're all shutting down and that they'd have to

hospitalize me right away. Once I was hospitalized, I was transferred to the intensive care unit. I gained over 100 pounds of fluid, needed daily transfusions to keep me alive and actually had a retinal hemorrhage that made me temporarily blind in my left eye. So it was really, really bad, really,

really quick, and we had no idea what it was. It turned out to be a rare disease, something called Casamund disease. At this time, there were no drugs approved for treating Casamund. Did the medical profession just not really understand this disease? That's exactly right.

Castleman's is a very rare disease, and it causes your immune system to attack your vital organs and shut them down, and it's deadly, unless you can get under control. The way that one of my doctors described it is we're going to literally try the kitchen sink. We're going to give you seven chemotherapies all at once at the highest possible dose, because we don't know what's going wrong, but we think if we just give you sort of the nuclear option, then we'll stop whatever's going wrong. Fortunately, it worked.

we all hear about chemotherapy and how bad they make you feel. I actually felt better with every dose of chemotherapy, which just sort of gets across just how sick I was. So you had a little bit of respite. You decided if the medical profession didn't know what to do with you, you would figure out yourself, right? Basically, right around then I was started on an experimental drug, and it was the only drug, it still is the only drug to ever undergo

a large clinical trial like that for Castleman's. I was really hopeful that drug was going to work. I mean, this is the answered prayer that we didn't get for my mom. So I went back to med school after being on medical leave for about a year. Then when I relapsed about a year later, now this is May of 2012. And my doctors explained to me that we were out of options, but I realized that I couldn't just sort of wade and hope that some research or somewhere would find a drug for me.

I realized that if I wanted any chance to survive, I would have to really turn my hope into action and start trying to find a drug that could save me. But there just was really only one. way to save my life. And that would be to use an existing medicine in a new way because the finances just don't add up to create a new drug from scratch. It costs between one and two billion dollars, and it takes 10 to 15 years to create a new drug. So that wasn't an option for me. I didn't have the time or the money. What I thought was possible was maybe I could find an old drug for another disease that could save me. And that was really inspired by the fact that none of those chemotherapies

were made for Castleman. So I'm sitting there thinking, okay, you're telling you're telling you. me that there's no more treatments for my disease, but you just gave me seven treatments for another disease, and it worked. So how do we know that there isn't an eighth drug out there that might actually help me? And that became my real obsession. Could I find a drug that's made for another disease that could treat my Castleman's and save my life? What was even your approach to trying to sort this out? The history of medicine had failed to do it. It doesn't seem very likely that you, this one guy, was going to make it happen. It was very unlikely. The way I was was thinking about it was that I'm going to go out swinging. There's a website called PubMed

where you can find all the published literature, and I found that there were 2,000 papers that had the keyword Castleman somewhere either in the paper or linked to it in some way. And so I emailed every one of those authors, and there's five to ten authors per paper, so I probably sent like, I don't know, 10 to 15,000 emails. What I found is that obviously a very small fraction of them are actually studying Castleman's or interested, but 27 of them showed up to a meeting that I held. in December of 2012 at the American Society of Humatology. That was a big moment. I mean, I remember I couldn't sleep the night before.

It felt like the Super Bowl. I'm getting together, these leading experts for Castleman's, and we're going to learn what do we know and what do we need to know to better understand and treat this disease. So for me, that was really step one, is like, let's build this community. A second parallel approach was,

let me start looking at related diseases and what we know about Castleman's, and can I start coming up with sort of a tentative list of the kinds of drugs that maybe could be on the short list for when I relapsed again. And then the third thing that I did was I started collecting my own blood samples. I started storing my blood every few weeks in the freezer. And it wasn't my home freezer. It was the freezer in the lab.

But the idea was that if and when I relapsed, I would want those blood samples to show me what was happening in my immune system. So if I could possibly survive that relapse, then I could go back to those samples and see if I could pick up what happened when I was happening. was relapsing. And then you did relapse? And then I relapsed, and I had my fifth deadly flare. And there's one person I haven't mentioned who played such an important role in everything. That's my girlfriend at the time, Caitlin. I had that fifth relapse shortly after we became engaged to get married.

That fifth flare was really, really, really tough emotionally for a lot of reasons. One, I was dying, but also just heartbroken that I wasn't able to have this family with Caitlin. But I was given the same seven chemotherapies, and they somehow worked again. like just sort of just scraped by. And I remember waking up and just having this smile like, oh my gosh, I got another chance. And the moment that I started to wake up, my sister Gina was on my left side and my girlfriend, Caitlin was on my right.

And my sister Lisa was at the foot of the bed. And I remember waking up and seeing them and saying, gee, I need you to call UNC and get a lymph node that's there sent to Philadelphia. Caitlin, I need you to go downstairs to the basement, start getting medical records, send them to Philly. Like, I think I'm going to make it out of here. Like, I got another shot at this. And sure enough, I was able to get. back to Philadelphia, and I just went straight to the lab. Was it the blood in the freezer that ended up being the key that put this puzzle together?

It was the blood in the freezer, and then it actually was that lymph node that was in North Carolina that was also really important. So the blood in the freezer, I thawed those blood samples and did something called serum proteomics, where we measured a thousand different proteins in my blood and looked for a signature. What are the things that were elevated in my blood that could maybe give me a sense for what my immune system was doing and why those things were elevated? and I got a strong signature for something called the M-Tor pathway. So M-Tor is really important for your immune cells to become activated and to fight off things.

It's sort of like a communication line that your immune system or almost like an alarm system. What I found was that it looked like it was turned on into overdrive, like it was massively on. I didn't have a way to confirm it in my blood, but that lymph node that had my girlfriend get sent to Philadelphia, that lymph node I was able to do an experiment to confirm that the M-Tor pathway was turned into overdraft. So now I had two sort of orthogonal or disparate data points that were pointing to the same thing. That was enough for me to take that data to my doctor at NIH, present the data to him and say, you know, what do you think? And really the question is, what do you think about actually giving me an mTOR inhibitor? Because when mTOR is, your immune system's out of control, but there are mTOR inhibitors that were made for organ transplant rejection decades earlier.

And they were FDA approved. They had never been used for Castleman's, but they were already on the market. So I thought maybe I could try an mTOR inhibitor. So when you made this mTOR discovery, this was new knowledge. This is something that nobody in the medical domain had ever noticed before. That's right. It was a novel discovery, and it ended up being the discovery that would be needed to link the drug Cyrillimus to Castleman disease and save my life.

Serulimus is also known as rapamycin. That's right. And rapamycin has an interesting history. it was discovered in the soil on Easter Island, right? That's right. Do you want to tell the story? Because it's actually such an amazing example of how drug discovery doesn't know is perceived linearly. We would all like to think that medicine and medical research is more linear.

It's more systematic. But boy, is it random at times. And I think this is a great example of it. There was a researcher at Wyeth Pharmaceuticals who was going around various specific islands and digging up soil samples. And he believed that maybe there would be anti-phomachians. in the soil basically to help keep the local organisms fungus-free. And so he had this hypothesis.

He collected all these soil samples. One of those samples he collected on the island of Rappanui, which is why he called it Rappamicin. And it turned out that Rappamicin is a pretty lousy antifungal. But it is very good, exquisitely good at inhibiting M-Tor. In fact, it's so good at inhibiting this complex that the complex got named after the drug. M-Tor actually stands for mammalian target of rapamycin. Like this thing in our body is inhibited so well by this drug rapamycin that we named the thing after the drug.

I've also heard a story that because rapamycin was not a very good antifungal, when they were shutting down some plant, they were just going to throw it all out. And the researcher actually smuggled it out and put it in his freezer. In his own freezer. No, you're right. Actually, I'm sort of getting goose so I'm thinking about that because, yes, he believed in the drug. and you're right, the company said, throw it out, and he said, no. And he put it in his own freezer until he got a new boss. And then he took this stuff out of his freezer.

He said, can I study this? And the new boss said, sure. I'm just thinking about the chain of things that had to happen in those decades before, you know, I'm here in Philadelphia looking under the microscope at my lymph node and thinking, I want to try serulimus. Well, if any one of these things don't line up, there is no rapamycin. There is no cyrolymus. And I make a discovery, but there's no drug for it.

and I would have died 11 and a half years ago. Has the drug had the same effect on others that are afflicted with Castleman? Well, the next three patients we treated, first a patient in Brazil and then a patient in New Zealand and then a patient here in Philadelphia, all three of them responded incredibly well. In the midst of relapses, when they were doing very poorly, they responded incredibly well. The third patient, the one here in Philadelphia, was a young boy named Joey. he was about 13 or 14 years old at the time.

He was very, very sick, and it meant so much for me to actually be able to see him getting better day to day, see his blood work improving, because with the other patients, I heard about it, but they were in other parts of the world. With Joey, we would come in multiple times a day to see him and to actually see him getting better on it. It meant everything.

So now we're four for four, basically, me and these three patients. I thought of myself, we did it. We took down Castleman's, this intractable, horrible, deadly disease, it's done. Unfortunately, the fifth patient we tried it on, it didn't work in. What we now know is that it works in somewhere around 20 to 25 percent of patients, which is something to both celebrate, but also, hey, we got a lot more work to do. And this initial success that you had with yourself and others was the inspiration for you launching an organization called Every Cure. Can you tell me about the approach that Every Cure is taking to this problem?

From the moment that that drug, Cyrillimus, started saving my life, I just haven't been able to stop thinking about how many more drugs are out there they could treat more patients in need. I'm not supposed to be here. Cyrillimus was never made for Castleman's, and who knows if it ever would have been discovered for Castleman. So the question became, well, how many more things are there out there that we could potentially uncover to save lives today? Because these drugs are already at the pharmacy. They're already manufactured. They're already available. my lab at Penn, and I joined the faculty shortly after discovering that drug to save me,

so I've been on faculty for about 10 and a half years. And my lab started doing this more and more frequently trying to study immune cells from patients with hyper-inflammatory diseases. And we actually had discovered in total, including serulimus for me, a total of 14 drugs for disease they weren't intended for. And we saved well over a thousand lives with drugs that weren't made for their disease. So we're so proud of that. about three years ago, we started thinking about, well, we're doing really well for these few rare diseases that we're working on.

But what about all the other diseases out there? We said, what if we could really scale what we're doing in my lab by looking across all drugs and all diseases? And we could actually quantify how likely every drug is to treat every disease. All 4,000 drugs against all 18,000 diseases. And AI could actually focus us in on the best matches across all the possibilities. Could you walk me through the clues that would lead your algorithm to focus on a particular drug disease combo? We utilize what are called biomedical knowledge graphs, which are basically, if you try to create a map of every single biomedical concept, so every drug, disease, gene, protein that you've ever heard of, putting that all onto one giant map,

and then annotating the relationships between every single one of them, GOP1s treat diabetes. We can do that a thousand of times. So the models pick up what's an example of a good treatment in this graph. And what are the patterns of connections between a drug and a disease where that drug actually works for that disease? And then give us a score from zero to one. If the model finds a pattern that looks likely that that drug will work for that disease, mTOR is elevated in Castleman disease. We discovered that.

Cyrillimus inhibits mTOR. Therefore, serilimus can inhibit mTOR and treat Castleman disease. it's basically looking for those sorts of connections across everything. And if it finds something that looks really good, it gives it something close to a .99. And it finds something that doesn't look like a connection, let's say a toenail fungus drug and pancreatic cancer, it's going to give it like a .001. And then we humans, we can go to the very top and say, what's AI telling us as a .999? That's where we start. When you say start, you really mean start because the hard work actually probably begins where the point 999 ends.

Oh, absolutely. Our platform is a low-hanging fruit finder. It's pointing us to these point-9s. And then our medical team, which are MDs, PhDs and MD-P-HDs, they actually look at the point-99. This drug for that disease. Why is it that lydicane might be a treatment for breast cancer? Lidicane is the numbing medicine you get if you go to the dentist, for example. It's a very common numbing medicine. We have a program around injecting lydicane around breast tumors before surgical excision. There was a large clinical trial done of 1,600 patients that were randomized to have this numbing medicine injected around the tumor, and the other half didn't. The patients who were randomly assigned to have the injection around their tumor had a 29% reduction in mortality. This is startling because a 29% reduction in mortality is a huge mortality improvement. It's also startling because lydicane is already used in nearly every surgical procedure. It's used at the site of the incision. So that way when you wake up from your surgery, you have less pain when you wake up. up. So it's already a substance that's being used during the surgery. What's being proposed here

is to use that exact same substance, but just put it around the tumor, eight to ten minutes before surgery, and you have the potential to reduce mortality in a really significant way. The study was done. It was published in a great medical journal, the journal Clinical Oncology, and no one's doing it. And the reason no one's injecting this is probably a fewfold. One is that it's only one clinical trial, so maybe we need to do another trial, maybe we need to wait another five or seven years to learn more about it. Another part of it is that there is no company that makes lydicane in a branded fashion. There's 10 plus different companies that make generic lydicane,

and they all make it for pennies and injection, and they all share fractions of this market. So there's no entity that's financially incentivized to do more studies with lydicane, or to make sure that every patient who has breast cancer ask their doctor to have lydicin injected around their tumor beforehand. Now we're getting into more familiar territory for me, incentives. What's so frustrating when it comes to finding new uses for old drugs is that the science is so much easier. But the economic incentives are almost totally absent.

Here's how Faginbaum describes it. Once you're dealing with FDA-approved drugs, you already know how it works in the body, because it's been proven. You already know that it's safe enough to be approved for one thing, and you actually also already know that it can do something in the body

that can be clinically meaningful for a particular condition, which means that it's more likely that it can also do something clinically meaningful for another condition. So you've taken it from all of this uncertainty, which is many unknowns about every molecule, and of course 90 plus percent of drugs

that are started in development will never make it to approval. So now you're dealing with just the things that they work and they hit something in the body, They're safe when they do that. They can have a clinically meaningful benefit. Oh, and by the way, they're already at your CVS. And for 80% of these, they're generic, which means they're also cheap.

So you add all those things up. And that's what we work with. And you might say to yourself, well, why aren't people repurposing drugs? It costs about 1% of the cost to develop a new drug, to repurpose a drug and find a new use for an old drug. And of course, the economic reason is that though it's much, much, much less expensive to do it, there is zero financial upside. Even though it's going to help a lot of patience, no one's going to make any money off of it.

There's this broken economic system. I just think that there's something here that's totally outside of my realm of understanding and my work. It would be so great if some really smart economists could spend some time thinking about this and maybe thinking about ways to solve it. As a matter of fact, some smart economists already have.

We'll hear from one of them, After the break. I'm Steve Levitt hosting Freakonomics Radio today, and we'll be right back. We've been talking about the potential benefits of repurposing existing drugs for new diseases. That's not a new idea. Here's the Dartmouth economist Chris Snyder. A famous case is aspirin. In the late 1800s, it was developed and used as a pain reliever, and it was discovered later in the 1900s that, my goodness, when people took aspirin, they didn't suffer from their second heart attack. Studies showed that it reduces the chance of a second heart attack by 25%. Snyder and I were in grad school together at MIT. MIT ran out of space for students.

I think we had a bulge and they admits they cleared out a windowless supply closet and they threw both of us in there, which for me was a great opportunity to be locked with Steve Levitt for a year in an office. Yeah. So you've done all sorts of great things over your career, but I would say that your latest efforts as one of the directors of the University of Chicago Market Shaping Accelerator, or MSA for short, this feels to me like it might be a legacy, the thing that you tell your grandkids about. Could you explain what MSA is trying to do? Sure. It involves faculty co-directors at the University of Chicago. That's Michael Kramer. Rachel Glanister is at the Center for Global Development, and that's where our headquarters has moved to in Washington, D.C. We decided that it was

going to be easier to influence policy in Washington, D.C., than Chicago. And then there's me up at Dartmouth. We got funding from Schmidt Futures and Citadel Foundation, and they were interested in these areas of public health, pandemic prevention, and climate, big existential social issues. And the question is, how do we solve those? Maybe without having to break the bank, one way to do it is through innovation and saying, how can you spend a dollar of public funds to get $100 of social benefit? There are different ways to come at the problem if you're a funder. One is you can try to find the most promising inventors and just encourage them along, provide them with grant funding and push them through from the beginning of the process.

The market shipping accelerator is not against that form of funding. We probably think there's too little of that anyway. But what we think is that there's an alternative, and that is to work at the other side of the pipeline. To do that, they use a mechanism that Rachel Glynnerster and Michael Kramer developed about 20 years ago called an advanced market commitment. It works like Kickstarter. Governments or foundations commit to buying a product that doesn't exist yet. That means companies can invest in creating new treatments knowing there's a buyer waiting at the other end. You dangle market incentives and the right parties who are going to actually have the best ideas will, in a sense, self-organized, just as markets often do,

and bring themselves through the pipeline to try to get that reward at the end. You can think of the push funding as a payment for attempt, and pull funding is in a sense payment for success. In 2004, Glenister and Kramer proposed an advanced market commitment to stimulate research on vaccines in poor countries. Snyder joined the team, and they got to test their academic theory out in reality a few years later to try to develop a more affordable pneumococcal vaccine, which prevents pneumonia, meningitis, and sepsis.

The pneumococcal vaccine advanced market commitment, it was picked up by the Gates Foundation, and they organized finance ministries from five different countries and this global alliance for vaccines and immunizations. It's come to be called Gavi. It was part of the administration of it, and it turned it to be a $1.5 billion fund. And how many companies tried to go after this $1.5 billion in payouts that were sitting there? There were two. There was Wyeth that was then bought by Pfizer that had the existing vaccine, and GSK was developing one that had even more strains that would have qualified under this program. Then the Serum Institute of India came in probably halfway through the program. And actually the prices did come down with the entry of Serum Institute. They came down quite a bit. And have you tried to estimate in the end the return on investment to this advanced market commitment? The second generation Numococcus vaccine has been credited over that period of time with saving 700,000 lives of children under five. It really hits any mark you want for cost effectiveness.

Prevnar was the first generation vaccine that was sold in high-income countries. This is the next generation that was going to conjugate more strains into that vaccine. This sits close to home. My own son, Andrew died of pneumococcal meningitis just like a year or two before Prevnaar. got approved and Previnar would have been just the thing that probably would have saved his life. I think about that when we talk about the pneumococcus vaccine. Yeah. So this was a big success, I think. Almost anyone would look at and say, hey, this worked exactly as we hope maybe even better. But this was launched in 2009. And as far as I know,

there weren't any other big market commitments like this done until COVID. Is that true? And what do you think that seeing the success here didn't spur governments to latch onto this more quickly? I think that is true. There were some other limited programs. I worked on one for multi-drug resistant TB, but it's on the order of several million dollars, not in the billions. If you think about, say, innovations that are going to help developing countries, I think that after the global financial crisis, all the countries in high-income areas were cutting back. their aid budgets. So I think that's part of it. And then, you know, we had COVID hit, and then we're thinking like, how do we get out of that pandemic? So government has made huge advanced commitments to firms developing COVID vaccines. And at least to an outsider like me, the COVID

vaccine development felt like a stunning success, incredibly fast times from idea to ramping up manufacturing to a global scale. Is the true story as good as it appears? And you give a lot of the credit to these advanced market commitments? I think the story is miraculous, really. When COVID hit, Michael Kramer got some calls because people are wondering, you know, who knows something about international funding programs for vaccines? Well, Michael Kramer's brainchild was this pneumococcal advanced market commitment. And whose name do we know? And well, Michael Kramer won the Nobel Prize in economics. So he was getting a lot of calls from all over the world and saying, you know, what do we do? How much should we invest. And certainly, policymakers had the intuition, like, this is a big problem. We should invest a lot of

money. We said over and over again, wrote paper after paper and made call after call, like, yes, you can't spend enough money on developing these vaccines. You're losing trillions of dollars every month in morbidity, illness, death, and the closure of your economies and schools. So we should invest billions to save trillions, obviously. With Operation Warp Speed, there was push funding. Basically, all the companies, except for Pfizer, their facilities being scaled up, and R&D costs, they were all covered by the government. And also these pull commitments to buy the vaccine, even though they hadn't been approved yet, were being signed. So they're doing both and that either are. And that seems sensible to me in such an emergency. So when you launched the market shaping accelerator in 2023,

I'm curious, you had this powerful tool. You knew it could work. Did you have a whole long list of applications where you already knew you wanted to apply it? Or was it more you were searching for ideas to try to figure out where to go next? So to announce ourselves, we took $2 million of our startup funding. And we put it toward, it's kind of a meta idea, but let's use pull funding to try to pull fund the best ideas for pull funding mechanisms. We use the money to provide prizes and milestone payments for the best ideas for neglected areas. that might benefit most from these market-shaping interventions. We got about 190 submissions from all across the world

from some really serious players, which we winnowed down to three finalists. And one of the finalists is this program for generic repurposing. It was actually an idea submitted by a lawyer named Sava Kredaimalides. This kind of blows my mind. There's a lawyer out there who proposed this idea which is now working its way towards having, if we're lucky, a trillion-dollar impact. That doesn't actually happen in research.

Do you agree? A lay person had an idea that is turning into something that is really, really going to matter. It sounds a great message about a concept that I push all the time, which is that nobody's got a monopoly on ideas. Even people like Michael Kramer who have great ideas don't have that many. great ideas and finding a way to let regular people express these ideas is a powerful, powerful, very democratizing force, which is really great to see. It's part of the idea of market shaping in a way that we don't necessarily have all of the

answers. Okay, so repurposing generic drugs. What's the problem here that needs to be solved? There are plenty of incentives to develop the initial drug. We have a patent system. You have to sell these blockbuster drugs. to patients and insurance companies and pharmacies, and you can make billions of dollars.

And the inventor of that branded drug, they have incentives to find other uses if that expands their market. The trouble is that that's true for branded drugs, but not for generic drugs. Once a drug goes off patent, essentially any incentive to come up with new uses and to do the clinical trials, those incentives drop off a cliff.

What's interesting about that is we have laws that are trying to incentivize people to do it. So if you come up with a brand new use for an existing pharmaceutical compound, you can get a patent that covers that use. The problem in practice is that it's completely unenforceable because let's just say Viagra turned out to be a great drug for fighting cancer, which it isn't.

But let's say it was a $500 billion market. The problem is when a doctor writes a prescription, they don't write a prescription that says, this is a prescription for Viagra for cancer. They say this is a prescription for Viagra. And when they fill it, they'll just fill it with the generic drug, not with the drug that's covered by the patent. And the only way to enforce it would be to do lawsuits one after another against every doctor, which of course would be a terrible publicity and impossibly difficult to do. It's not that people don't realize and haven't written laws to try to help it. It's just that the laws we've got in place

have not worked empirically at all. can get a patent on new uses for drugs and new uses for generics. The trouble is, as you say, you can't monetize it. So the market-shaping accelerator, along with researchers from the Duke Margolis Institute for Health Policy, have spent the past three years developing a proposal where the federal government would offer pool funding to encourage more research into new uses for generic drugs. We think this would cost roughly $1 billion per successful. opportunity. That's Saren Chathak. He's a senior policy analyst who works with Snyder at the

market-shaping accelerator. Here's how Chetek describes their poll funding proposal. First, a funder, like Medicare, Medicaid, or the NIH would promise a reward if companies successfully discover and prove a new use. So this reward would be based on impact. For example, whoever the funder is could say, we've assessed that every year that someone uses this drug, it saves Medicare $2,000. So now we have this drug that's successfully been repurposed and a impact metric per patient. Next, the manufacturers would sell the drug for the new use. And then each year, the funder, say Medicare, would measure the adoption of that drug for the new use, and they would pay the company based on the impact. Let's say 50,000 patients take it that year. And I have a

as we said, the estimated savings are $2,000 per patient, then this would imply savings of $100 million. And so they would pay the company some percentage of that. So as long as the promise of that payment is enough to justify running the clinical trials, companies will make the investments and run them in the first place. Will this ever happen? We've had promising conversations, no commitments yet. HHS, Health and Human Services, has made this a priority on a higher level.

There was a Health and Human Services Strategy Report that was released in September, and it had, I don't remember exactly, but maybe 30 priority areas, and drug repurposing was one of those areas. And here again is the Dartmouth economist Chris Snyder. I think there's a chance here. We'll work with whatever agencies want to work with us to iron out the wrinkles in the program and to start specifying what the program looks like. We are definitely trying to hit a home run here.

we would want this to be a really broad and systematic solution for drug repurposing. Maybe I'm wrong about this, but I don't think small necessarily means easier. Governments have time constraints and many government officials want to have a lot of impact. So we're hoping that's the case with this. That in my opinion is a fantastically clever idea for how the U.S. government could incentivize drug repurposing. And one big advantage of it is that it doesn't cost a government a penny unless it works. Coming up after the break, we'll hear about what it's like working on drug repurposing from inside the government. Generally, the phrase that's thrown around is it's not considered sexy enough.

Right? So I think that's a fundamental problem. We heard how some economists think the U.S. government should encourage pharma companies to make groundbreaking discoveries of new cures from existing drugs. drugs. But even when those discoveries are made, getting them actually adopted by doctors is its own challenge. On average, it takes 17 years for a new medical advancement to be adopted. That again is Heather Stone from the FDA. We heard from her at the beginning of this episode. And that's probably a promising estimate for many repurposed drugs where there's no commercial incentive and so there's no real marketing around them. Stone has been thinking about and working on drug repurposing for practically her whole life.

My mom was an infectious disease doc, and I often saw her face patients with diseases that did not have any approved treatments. At that time, you phoned up your mentor, your colleague, and asked them what they had tried or how they would approach it. That was how information was disseminated. I remember the inordinate amounts of time that were spent trying to find solutions. to help these patients. And then I myself, we joke that I'm like the repurposing test case. I have benefited enormously from repurposed drugs with my own health issues. I'd love to hear that story. Let's see. Where to begin? I have a chronic pain condition, probably fibromyalgia, but it's kind of a diagnosis of exclusion. It began in high school,

and by the time I was in college, I could barely get out of bed and actually almost dropped out of college because of the pain and fatigue. Eventually, a drug called Lyrica, which had been approved for diabetic neuropathy, patients started reporting that those who also had fibromyalgia noticed really large improvements in their fibromyalgia symptoms when they were taking it for diabetic neuropathy. So I was put on that drug, and that has been a treatment that I've been on now for almost two decades. and is really the reason that I'm able to do the job that I do today. So you have been instrumental in creating something called Cure ID. Could you just describe what Cure ID is?

Cure ID is a treatment registry. It operates as a website and a mobile application that allows patients, caregivers, and clinicians to all share their treatment experiences with repurpose drugs and then to explore what others have tried. It makes the data all openly available to everyone to see. Let's say I go to cure ID and I type in toxoplasmosis. What will I see? You would see all of the cases where clinicians or patients or their caregivers have submitted their treatment experiences with the drugs that they have tried for toxoplasmosis.

They will be able to see whether those drugs were effective or not in individual patients and then as a whole, or whether they were not effective or had side effects that perhaps led them not to be used. used. And then you can go each layer down to see the full details that were submitted for each patient about their treatment experience. And what is the scale now of cure idea? How many entries are there in the database? There are about 700 clinicians submitted cases and about 600, 650 patient submitted cases or caregiver submitted cases. There are approximately 5,000 cases that we've extracted from the published literature. And then there are 115,000 cases that we have extracted from electronic medical records, but those are specific to acute COVID-19. So if you think about it from maybe a skeptics perspective, what you're asking for with your ideas, you're asking practitioners

to do something that is going to help someone else but doesn't really have any career benefit. It's an act of goodwill on the part of the clinician or the patient who enters the data. So If you would talk to economists, you'd say, well, it wouldn't be that surprising that it would be hard to get doctors to report outcomes. Did it surprise you, though, when you launched your idea just how hard it was to get people to make entries? It did, and it didn't. You're absolutely right. There is an incentive problem. And it's something we've worked very hard to try to figure out what is in it for the clinicians. and also part of why we pivoted to patients and caregivers sharing their experiences. I think the answer to what is in it is that it creates sort of a virtuous cycle where they then get

information that is important to them and the treatment of their patients by reading what others have tried. As with sort of any social media platform, you have to get the ball rolling, and it's been difficult to do that. The feedback that we had received was very positive. People thought this was a brilliant idea and that they thought that there was an enormous need for this kind of platform.

They certainly recognize that people would potentially be resistant to taking the time to share their experiences or might have other reasons for not wanting to share them. But I don't think we recognized just how difficult it would be. As I listen to you talk, I can't help but think about how different your approach to saving lives via cure ID, how different it is versus business as usual at the FDA,

where drug approvals require the carrying out of costly, time-consuming randomized experiments to prove the safety and efficacy of the drug therapies. I suspect for that reason alone, probably other reasons too, you likely faced a lot of resistance within the FDA as you worked to getting cure ID launched. Is that a fair statement? Yes, it's been challenging to persuade people

of the utility of the platform and to acknowledge its limitations. We don't think that a drug should be approved based on the data and cure ID. That's not its intent, and it's not designed to do that. What it's designed to do is to generate hypotheses that can then be studied in more robust clinical trials or observational studies. We can't tell from these cases alone for sure whether a drug is helping or not. The idea of pull funding, so the idea is if a, firm went in and got FDA approval for a new indication for a drug, that the way they'd be

compensated would be after the fact by going and looking in the data and seeing how much good is this drug doing in this new setting? And the obvious people to make that decision would be the people who run Medicare and Medicaid because they're the ones who are spending the money and they can see the patient outcomes. That strikes me as a really radical idea, a very different way of doing business. I love the idea, but I worry that public entities would just look at that and say, no way, that's impossible. I think it's a really interesting idea. I think it would be difficult to implement. It's not clear to me that we have a way of effectively making those kinds of assessments. I mean, maybe CMS does. It's outside of my scope of expertise. I think the general premise of

poll incentives is something that has worked in other similar areas. And so from that sense, it's not a totally radical approach, but some of the details of the implementation are different enough that it's hard to know whether it would be possible. I know you probably don't know the numbers off the top of your head, but just guessing, what's your medical research dollars are currently going into drug repurposing? And just in your own opinion, what would be the right share? If I had to guess, I would say a fraction of 1%, like incredibly small. What is the appropriate fraction? Maybe 10%.

I mean, I really don't know. It depends on the value that you can gain for society from it. Obviously, there is enormous value that is gained from the development of novel treatments and from understanding of basic biology. But I think that there is a lot of unrecognized value in identifying existing drugs that could be treatments for diseases that have really large morbidity and mortality. It's very difficult for repurposing research to compete with novel drug discovery, for example. Generally, the phrase that's thrown around is it's not considered sexy enough.

So I think that's a fundamental problem. There is one person who's trying to make drug repurposing research sexy, David Faginbaum. His organization, Every Cure, has already raised some serious dollars from the federal government and also from foundations and philanthropists, including Ted's Audacious Project, John Arnold and Mark Zuckerberg. We've now raised over $100 million, which is just transformative to be able to direct towards drug repurposing when you consider that this has really been so neglected over the years, but also typically it costs between $1 and $2 billion to make one drug. So $100 million is much less than it costs to make even one drug.

but we're able to go a long way with that because the drugs are already approved, they're already available, and with the $100 million that we've raised, we anticipate being able to treat 15 to 25 debilitating conditions in the next five years. So you've raised a bunch of money and hopes for what you're doing are sky high. Do you ever wake up in the middle of the night and worry about the fact that maybe it's just not going to work that well, that in the end, it'll be a disappointment? I probably should wake up and worry about that. But what I actually worry about all the time

are just the people that are waiting for our drugs, that there's a drug that could help them and there's someone suffering right now, and we haven't found it yet. I walked past the CVS when I was coming here today, and I thought to myself, what drugs are in there on that pharmacy shelf, and who is suffering right now in Philadelphia,

let alone anywhere else in the world, that could benefit from one of those medicines that's not on that medicine. I'm fortunate enough to have been one of the lucky ones that got on one of these medicines that wasn't made for me, and I'm here. So I sure as hell better spend the rest of my life looking for more of these things for more people. I think back to that final promise I made to my mom that I was going to become a doctor to discover drugs in her memory. And maybe if I got really lucky, I could develop one drug for one disease,

and that would just be a pinnacle moment in my career. Never in my wilder dreams could I have imagined that my own personal experience would open my eyes up to the same. simplest, highest ROI, lowest cost way to help people in a way that hadn't been done before. The worry for me isn't, will we meet expectations? The worry is just 100% that person that's waiting for that drug that we haven't found yet. And how can I engineer our system and our program so that we find that drug in time for that person so they don't suffer when they don't have to? That again was David Faganbaum in conversation with Steve Levitt.

Thanks to both of them, as well as Heather Stone, Chris Snyder, and Sarin Chuthic. You'll be hearing more episodes down the road with Levitt as host. Meanwhile, coming up next time on the show. I see an educational system that immediately rewards you for everything. Ah, great job. There's no way to tell a kid, well, this wasn't really good work. but I know you can do better and why don't you work on this? Bring it to me tomorrow.

And all of a sudden you have a good one. It's a philosophy behind education and make the children happy instead of making them strong, just for God's sake, make them strong guys, strong young women. And they will like it. They will like it. We will hear from the filmmaker, writer, and self-styled philosopher, Werner Herzog. That's next time on the show. Until then, take care of yourself. And if you can,

someone else, too. Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app, also at Freakonomics.com, where we publish transcripts and show notes. This episode was produced by Alina Kulman with help from Zach Lipinski and edited by Gabriel Roth. It was mixed by Jasmine Klinger and Jeremy Johnston. The Freakonomics Radio Network staff also includes Augusta Chapman, Dalvin Aboagi, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Ilaria Montenicourt, and Teo Jacobs. Our theme song is Mr. Fortune by The Hitchhikers, and our composer is Luis Guerra. I'm so sorry to be running so late. I'm a 30-minute walk and apparently also a 30-minute Uber. The Freakonomics Radio Network, the hidden side of everything.

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