Broad sector grouping of pharmaceutical companies engaged in drug discovery, development, and commercialization.
2 takes · first discussed May 17, 2025
Private company — no public price to score. We track what they said; valuation-mark tracking is on the roadmap.
Chamath warns that Trump's international reference pricing EO, combined with already thin pharma ROI (~1.5%) and rising trial costs, risks further eroding R&D investment and pushing innovation to China.
Ben Shapiro argues Trump's MFN drug pricing EO will squeeze pharma profits, reduce R&D, and shift costs to private insurance consumers, rather than fixing the underlying issue of foreign free-riding.
Both Chamath and guest Ben Shapiro hold a cautious, neutral-to-negative view on the near-term outlook for the pharma industry, sharing medium conviction. Their central concern is that Trump's international reference/Most Favored Nation (MFN) drug pricing executive order will compress already thin profit margins — Chamath citing an average pharma ROI of just ~1.5% as of 2022 — and thereby chill R&D investment. Chamath specifically warns that the downstream consequence could be an accelerated shift of pharmaceutical innovation to China, while Shapiro frames the policy as an ineffective remedy that burdens private insurance consumers rather than addressing the root problem of foreign free-riding. The two are broadly aligned in their skepticism of the EO's approach, differing only slightly in emphasis: Chamath focuses on geopolitical innovation risk, whereas Shapiro stresses the structural damage to biotech startups already absorbing billions in pre-revenue trial costs.
Chamath warns that Trump's international reference pricing EO, combined with already thin pharma ROI (~1.5%) and rising trial costs, risks further eroding R&D investment and pushing innovation to China.
If you then further affect the profitability scale of pharma, the impact is probably that we push R&D to different places... the average ROI for broad-based pharma is 1.5% as of 2022.”1:28:48
Ben Shapiro argues Trump's MFN drug pricing EO will squeeze pharma profits, reduce R&D, and shift costs to private insurance consumers, rather than fixing the underlying issue of foreign free-riding.
If you want to kill R&D, this is a great way to kill R&D... the vast majority of biotech companies and pharmaceutical, startup pharmaceutical companies... spend literally billions of dollars and then crap out at phase 3 in the FDA trials.”1:32:03