Ep 9. Attorney and healthcare regulatory insider Matt Wetzel joins the podcast

In this episode of Value Health Voices, hosts Anthony Paravati and Amar Rewari welcome Matt Wetzel, a trustee at the American Health Law Institute, to discuss the complex regulatory environment surrounding healthcare. The conversation covers insights from the JPMorgan Healthcare Conference, changes in NIH grant funding, Medicaid spending, and the future of FDA regulations. Wetzel emphasizes the importance of understanding the nuances of healthcare policy and encourages listeners to look beyond sensational headlines to grasp the underlying issues affecting the industry.

Takeaways:

Matt Wetzel is a lawyer specializing in medical technology and life sciences. The JPMorgan Healthcare Conference is a key networking event in the industry. The Trump administration is focused on efficiency in healthcare regulation. NIH has implemented a cap on indirect costs for grants. There is a debate within the industry about the appropriateness of indirect cost caps. Medicaid spending is a politically sensitive issue that may face cuts. The FDA's regulatory environment is evolving, with potential for increased efficiency. Personnel changes in government can significantly impact healthcare policy. The media often sensationalizes healthcare regulatory changes. Understanding the details of regulations is crucial for stakeholders.

Introduction and Guest Background

Well, Amar, we are back with Value Health Voices. I believe it's episode nine. This is a first for us, our first episode with a guest, correct, Anthony? And we're very excited to have Matt Wetzel on who is a trustee at the American Health Law Association. And he will talk to us about the dynamic changes in the regulatory environment around health care. And he's local to D.C. I've known him well, so let's get into it.

Matt Wetzel, partner at Goodwin Law, counsels medical technology manufacturers, pharma and biologic companies, and a variety of other healthcare and life science organizations. His practice includes working with life science companies to address issues around the Anti-Kickback Statute, the Stark Law, the False Claims Act, and the Sunshine Act. He also counsels life science companies on Medicare and Medicaid coverage and billing requirements, including working with pharma, medtech, and diagnostic companies on coverage concerns.

He has a unique experience by having prior experience as the vice president and deputy general counsel at AdvaMed, which is the largest medtech industry nonprofit. He also spearheads many of the medtech's legal policy initiatives in Washington, D.C. He represents life sciences and healthcare clients before key federal and state policymakers, including Congress, CMS, and the OIG. He also hosts a regular podcast on healthcare fraud and abuse for the American Health Law Association where he serves as a trustee on their board. So thank you, Matt, welcome.

Thank you, Amar. I need to take you with me wherever I go. That was quite an introduction. I appreciate that, Anthony. Thanks for having me.

Navigating the Regulatory Landscape

It's great to have you, Matt. So we thought maybe we could start off, Matt, and you could talk to our listeners a little little bit about your role in the medtech and life sciences industry and what you do in the regulatory environment.

As you mentioned, I'm a lawyer here in Washington and my clients are largely biotech companies, their senior leaders, their investors, and oftentimes their other stakeholders, whether that's provider groups or patient groups and the like. And so my practice, I call it a waterfront practice. So it's very broad. I work on a whole host of regulatory issues that any one of these companies might face as they are developing a product, as they are researching a product, building their commercial organization, launching a product into the marketplace, their relationships, their market access goals and initiatives.

And a lot of that brings me in touch with this crazy maze of regulatory requirements in Washington, D.C. I feel like sometimes I'm this swamp boat tour guide and every day in the morning I take my clients on this boat and I show them around all of the various parts of the swamp here in D.C. so they can see all the regulatory requirements. Whether you're a lab company and you've got CLIA certification and all the requirements that go into that, or whether you're building out a medical technology and you need to get through FDA. So it's a really great spot to be in.

I don't work with big pharma companies. I work exclusively with startups, with emerging companies, mid-sized companies, companies that are new to the market or just getting started. Oftentimes I work with European companies that are starting their US divisions and so they want to understand what are all these laws and statutes and regs that are required to comply with here.

Being in D.C. and working with this group that doesn't typically have lobbying employees, I've been blessed to develop this part of my business where I represent some of these companies here in Washington. If they want to go to the Hill and meet with folks, if they want to engage with the agency, I might put them in touch with people who can help them get to the right decision makers. We'll work to help craft their talking points, make sure that when they're thinking about how they want to position themselves here in D.C. they've got the right people-focused narrative.

I do a lot of that. I think that sometimes my job is not rocket science, especially when it comes to things like you mentioned the Anti-Kickback Statute. Don't lie, don't cheat, don't steal. It's kind of easy. So I don't encourage people to go into this because it's so easy. I'm afraid somebody's going to understand my game here. But it's been an interesting career, 20 years of doing this so far. So I'm happy to be here today.

The J.P. Morgan Healthcare Conference Experience

That's amazing, Matt. Having just gone to a Swamp Board tour outside New Orleans last weekend, I will say you're much clearer to understand than our guide was. So that will continue throughout this episode. So it sounds like your experience has really also taken you to really interesting places in terms of the conferences and the individuals you interact with. One being the J.P. Morgan Healthcare conference that was held recently. I think many of our listeners are really interesting to hear about what goes on at that conference and what was your role there and what insight do you have to share with us?

It's funny when folks ask for my insight, I just show up and take it in. J.P. Morgan of course is the largest healthcare conference in the world. It's held every January in San Francisco. Presumably it will continue to be in San Francisco. Every year there's some hubbub about "oh, this is the last year it'll be in San Francisco," but it looks like it'll stay out there for the time being. Thousands upon thousands upon thousands of healthcare focused individuals and entities descend upon San Francisco for this conference. Inventors, researchers, investors, lawyers like me, consultants, you name it, they are there at the J.P. Morgan conference.

Why? Number one is networking. That is the absolute probably first four of the top five reasons to go to J.P. Morgan. There's so many people there that even if you're not part of any kind of particular event and you just go and get a hotel room, you'll have meetings to go to, you'll have lunches and dinners to go to. There's so many people who want to talk and connect dots. Whether that's investors with new companies or there's a lot of researchers that try to connect around J.P. Morgan because it's a good opportunity to meet like-minded folks.

I go out, I've been out there for the past three, four years now. I speak, I usually give kind of a regulatory update on life sciences. The folks who are there aren't my usual people. I'm usually talking with regulatory people or market access people or folks who understand or need to understand Medicare requirements, that kind of thing. The people at J.P. Morgan, they're handling the money. So these are a different type of professional and I'm usually asked to speak because I can deliver like the bullet points of these really nerdy regulatory issues that have a huge impact on the bottom line for a lot of these companies. So I just go out and I usually do some kind of update. This year it was predictions for the Trump administration, which we'll talk about later tonight. So networking is the top four of the top five reasons.

So I have this straight, Matt, what you're saying is that there are perhaps a substantial number of individuals who are uninvited guests at the J.P. Morgan conference who simply show up in San Francisco to be in.

Well, yeah, because the conference itself, certainly the panels and the folks you can hear from there are top notch, but there's hundreds upon hundreds of events that surround the J.P. Morgan conference and are affiliated with it, that present equal opportunity. So if you know a couple of people who are going out there to just... the hotel rooms are very expensive in San Francisco that week, as you can imagine. Just given the sheer number of people who come.

But I actually this year went really with just the intention of delivering my presentation and then leaving and going home. I didn't feel like doing business development this year, but I ended up out there four days straight, full of meetings, saw all kinds of people. I'm sure folks who are listening to this go, if you have any kind of footprint in healthcare, you'll find people to connect with.

That's in fact why I brought it up. Because the people who listen to this podcast, I think a good number of them would be surprised to know that that's actually a reasonable thing to do. If you go to the website, it's either you're a J.P. Morgan customer and they invite you or you're an invited speaker. It doesn't leave to the imagination this idea of simply going and being part of the scene.

And it's wild too because downtown... I've got a lot of clients in San Francisco, so I'm out there pretty often. And usually you go out there and it's a very professional daytime in the downtown or whatnot. But during the J.P. Morgan conference, I mean you go into every coffee shop and it's people having some kind of matchmaking meeting or somebody's talking about "I just wrapped up this latest research in xyz cool new therapy that I'm working on." I met a new client when I was out there who has an AI based fitness app. And so it really runs the gamut of types of people who are out there. People should go. You don't even need to stay in the city. Last year I stayed in Palo Alto and just ubered back and forth and hung out with my clients in Palo Alto and then would go meet people in San Francisco during the day. So it's really a good opportunity.

Sounds like we have a road trip for our next podcast.

Definitely, definitely, definitely. Let's do an episode from San Francisco. Why not?

NIH Grant Funding and Indirect Cost Caps

Yeah, exactly. From the outside, the conference. So Matt, in terms of... I know you don't like to use the word insights, but I'll say insights, predictions of this dynamically changing regulatory environment. And I think some of the things I would like to focus on in this episode is around some of those changes, particularly around the Trump administration's push to weed out what they think are either fraud or inefficient costs, cost savings that they think they can gain, whether it be from CMS, whether it be from the FDA, whether it be from NIH.

So starting with NIH, it's been in the news a lot about the caps on the indirect costs on grants that the Trump administration has proposed with a 15% cap on indirect costs. Can you comment about that? Like, what was their impetus for this and what do you think? You know, you're advising people about that?

Well, so it's been implemented. So this is done. It's not just proposed now. It's being challenged currently in the federal courts. And frankly, maybe this is an interesting little tidbit we can put a pin in for later in the episode. We're seeing a real constitutional kind of unfolding right now. The pendulum swings back and forth over time as to where the court sits, as to how much executive authority the president should have versus Congress, et cetera. And we're really seeing that right now. And this is a really great example of it.

So NIH a couple of weeks ago issued a supplement to its policy on grant funding. Grant funding is done in two parts. First, direct costs. This is where you apply for a grant and you say, I've got a budget and it's going to cover equipment, it's going to cover costs to recruit patients, it's going to cover specific cost supplies, et cetera. Then you have, and that's all kind of negotiated out, these indirect costs. And indirect costs under the regulations are pretty undefined. They're defined as facility and administrative costs essentially that are untied to any objectives or budgetary line items.

When somebody applies for a grant—whether you're applying for a grant to a private foundation, you're applying to a grant from a manufacturer to support research, or applying to NIH for an NIH grant—you can also, in addition to your direct costs, get some extra for these indirect costs. So overhead, right. It costs money to heat and electrify a building. It costs money to run all the lab equipment, but it's not a direct line item in your budget. So you could apply for this. And NIH was issuing grants that would pay the direct costs, but then they would tack on an extra 65%, 50% for these indirect costs.

The Trump administration, as you know, has a real focus on efficiency. When you think about the two big policy platforms of the executive branch right now in health care, it's the Make America Healthy Again (MAHA) mission and the DOGE government efficiency mission. Those are the two biggest influences. And they looked at this and they said, well, look, these other similarly situated organizations, the Chan Zuckerberg Initiative, the Rockefeller Foundation, these other private organizations, they cap the indirect costs. They say, we're only going to pay 15, only 10%.

NIH says also, and in addition, many of these institutions that are requesting 50, 60, 65% indirect costs, they'll settle for 15% when they're negotiating with these other folks. So we want to be similarly positioned. The regulations create a floor of 10%. It's a case by case assessment, NIH says. So those organizations that truly need funds to keep the lights on, so to speak, will certainly be able to do that and qualify for those funds. But to the extent that we're dealing with an institute that itself will accept lower percentages for indirect costs, and you have these other private foundations, NIH has said, we're not going to pay for these indirect costs to the same degree.

Gotcha. And so in my research, just so the viewers have some background like where this even came from. So a lot of this started with the Manhattan Project, I read. So back when... the federal government was funding all kind of research. And then with the Manhattan Project at the time, they were having to hire a lot of foreign researchers to build the atomic bomb. And when Russia or Soviet Union at the time got Sputnik up in space first to advance science, there was this partnership between the government and universities and private individuals to spearhead and fund research, which is where a lot of these grants and everything in this kind of partnership developed back in the 60s.

And since then there's been... a recent study in JAMA that showed that from 2010 to 2019, 354 of the 356 new drugs that came to market were funded with NIH grants. And we're oncologists, right? So a lot of this is actually oncology drugs that have shown survival benefits. In addition, there's been some literature saying from a nonprofit organization that basic research, that every dollar that was publicly funded for basic research yields about $8.38 after eight years because of the health and economic benefits from the NIH funding.

So I think... and one of the counterpoints to this is what you were saying, is that people feel that maybe these universities could fund some of this through their endowments. Or through other means. But a lot of these indirect costs go to upgrading and maintaining those lab facilities, as well as supplying staff for these labs, which can be like sometimes over a hundred individuals just in one lab to invest in this. It's that concept as a background. I'd be curious to hear your thoughts around that.

Yeah, and just our listeners are aware these are all our own opinions. We don't represent our organizations. Yeah. And these aren't even my opinions. I'll just say I kind of... I just kind of tell what I hear. That's my lawyer's way of not owning anything. So in any event, I was involved in a conversation earlier today with a group of CMOs from different institutes, payers, health plans, research institutes. There were investors there. And I brought up this issue of the NIH grant funding. And one person who's very passionate about it, Amar, raised these points, talked about the various research projects that will suffer as a result of the fact that there's reduced access to the indirect costs. And then there was another person at a very reputable, similarly situated research institute who said, "You know, but come on, we all know we've been asking for too much money over the years." And so I think there's this disagreement even within the industry about indirect costs. And I think the reason is it's so undefined. And when you read the... under the NIH regulation... so perhaps what this tells us is that there needs to be some sort of clearer, more transparent regulation around how they would cap indirect expenses. For example, maybe they say based on the average revenue of the requester that they would cap it at a certain rate and you could have a tiered system after that, just for example. That might be a potential solution for how that could move forward. But I think what this is showing us is that there's just a real lack of clarity in this piece of research funding.

No, and I agree. I think the transparency is key because how do you know what that cap should be set at without transparency? Right. I mean, we're not lawyers. But I'd be curious from a legal perspective, like if the NIH has existing contracts with so many of these universities, is it even you just temporarily suspend those contracts that are existing or, I don't know, from a legal perspective, how does that work?

So it wouldn't suspend the contract. It would just reduce the amount that they are giving as part of the grant. And whether or not they can do that retroactively... expertise in government affairs and government contracting is like a really sought after part of the profession. But I can tell you that every aspect of those contracts is governed by very specific regulatory requirements and contractual provisions. So whether you can do some kind of retroactive or revision to the payment amount is going to be in the contract moving forward, future looking. Certainly this has been issued as part of their regulatory guidance. The lowest they can go is 10%. So there's a floor but no ceiling. So essentially they're setting a ceiling for the first time.

Government Spending and Medicaid Reform

So just thinking practically here about, from the perspective of the administration, from the perspective of perhaps DOGE, Elon Musk and others, I think they probably know the formula for GDP. And one of the formulas on the plus side is government spending. It's consumption, investment, government spending and then net exports. And so do we have any sense that we have a strategy to how we're redeploying government spending? Because if you're just cutting it, it won't be long before we're looking at a contracting economy. And then where are we? I mean, has Mr. Trump thought that far ahead? I don't know.

Yeah. Where's it all going? I don't know. I mean, we're a little over a month in, so I think there's still a lot of construction that's going on right now, demolition, construction, all at once. The dust hasn't settled, I think, on anything really, except kind of maybe who's going to be in some of these chairs of authority. I think it's a great question, though. I want to know where the money's going to go myself. If the savings that DOGE and Musk are talking about are real, and I hope that they are, that's great. I mean, of course I wouldn't want that at the expense of the economy. I wouldn't want that at the expense of good research and good people who might be losing their positions. But for the overall better view of the country, that's a positive.

And I think that leads nicely into our next topic around cutting spending to potentially pass through the new budget. And one of the drivers for that is being looked at as potentially cutting spending at CMS. Particularly around Medicaid. So different solutions have been put forth, whether there could be a work requirement associated with Medicaid. And to your point, Anthony, if you keep cutting the fat, how far do you go before you hit the bone and you start cutting into the bone? And so I'd love to hear your thoughts around some of these, the spending around Medicare.

Yeah, I think that the restrictions are going to have to come into play here if the Republicans are serious about cutting Medicaid spending. And that, you name the two. Number one would be some kind of work requirement. Number two would be some kind of cost sharing requirement. Cost sharing is probably not likely. We're talking about the financially indigent who qualify for Medicaid. They don't really have the funds to afford the cost share. So that leaves the work requirements. Now, I don't know much about work requirements for Medicaid. I don't know how rigorous they are. I would imagine that they're probably not overly stringent. But I'm also fortunate not to be in the position of being somebody who's ill on Medicaid and needing to find a job. So it's easier, probably easier said than done, but I think work requirements are more likely than cost share requirements on this front.

Guys, I'm no James Carville and I'm certainly not going to sit here and spout off a bunch of vulgarities as he is wont to do these days. But I can play a political analyst at least here with the three of us. My call analyzing this particular political question, and Matt, you tell me what you think and Amar as well, is that the Republicans aren't going to touch Medicaid in a significant way because a large part of their constituency and a large part of how they've shifted the political landscape of this country is appealing to the segment of the population that's more likely to need those services. So my sense is it's a bunch of talk and when the rubber hits the road, you're going to see the coalition push back to Trump and DOGE about Medicaid. So am I onto something here or am I way off base?

I think you're right. I think that it would be a really tough sell politically to touch any kind of entitlement. Social Security, Medicare, Medicaid. We were talking before we started rolling here about federal employment being viewed as an entitlement. And so I think there could be some redefinition shaping around what type of relationship with the federal government results in a constitutional property right that merits protection. Case law makes clear that that includes Social Security, Medicare, Medicaid, to an extent, federal employment. So it'll be interesting to see how that all shapes out.

Yeah, and to your point, Anthony, the Kaiser Family Foundation recently commented that two thirds of Americans either have a family member who's been on Medicaid or know somebody who's been on Medicaid. So it does touch a large segment of the population. And people have historically always quoted Medicare as being the third rail of politics. But with this expansion in Medicaid over the years, that also may qualify. I would be curious though, especially to hear from you, Matt, about because there is this duality between DOGE and the administration. And this is a good example of that. DOGE may have certain thoughts that are contradictory to the administration. So maybe you can talk about that.

Balancing Government Efficiency with Health Policy

Yeah, I think that's right. I mean, when you think about the White House currently on health, it's MAHA and DOGE. And this is one of those examples of an issue where those two philosophies are going to brush up against each other and might not necessarily align completely. And so we'll see kind of which one wins out in which setting. Here perhaps because we are talking about health, we are talking about vulnerable patient populations because Medicare and Medicaid are really significant tools for the federal government... to put forth policies that are impactful for Americans, I think that that is going to win out over the government efficiency front.

You can drive government efficiency elsewhere in Medicaid too. So instead of thinking about just cutting the dollars, I think it's actually going to be the bureaucracy that will shrink to reduce some of that spending. I joke, I probably shouldn't say this on this podcast, but I joke in private about how Medicare and Medicaid payment, as you guys know better than anybody, it's all one big math problem. There's little inputs here and there, geographic input, work value, whatever it is. It really feels like there's gotta be an app for that. So I just wonder if there's gonna be a reduction in spending, but it's gonna be focused more on the bureaucracy side as opposed to the entitlement side.

Right. That is if we could achieve that, if we could get to a simplicity of interacting with the government, of a deconstruction of all the rent seeking middlemen. In every aspect. And certainly health care is full of that. I don't know if any segment is more full. Maybe Defense could give it a run for its money. But that's the ticket. I mean, if you think about, and we were talking about this also before we started the episode, of these highly efficient governments in the world where you can basically file your taxes in like three minutes. Wouldn't that be a grand thing if we could achieve immediate refund, accurate. And it's all math.

And I will say, and again, I say I see a lot of things in jest. I truly don't say this in jest. My job, I get paid to help read the rules of the country. I want to work myself out of a position. Everybody should be able to understand how this works. So much of our taxpayer money goes to Medicare, to Medicaid, to healthcare just writ large that it shouldn't just be a minimal number of wonky nerds like me who don't mind digging into the regulations to figure it all out. Everybody should be able to understand. It should be super, super easy to understand. So I've got hopes that before I retire, we'll find a way to put me out of business.

I'm sure you'll spend about two minutes looking for new work. So don't worry.

FDA Funding, Personnel, and Transparency

Matt, any other thoughts you could give our listeners around the regulatory environment, maybe around whether it's the FDA or other parts of HHS where we haven't discussed?

Yeah, I think that there's learning to be done on the FDA front. I think we're seeing that the folks there... and I'm sure this is true of many agencies, I just happen to have a lot of interaction at FDA... the folks there are real experts in this technology. Many are experts in this technology. And so I think what we saw over the weekend with the FDA reviewers being terminated and then that being walked back is perhaps a recognition that there's some nuance to some of this regulatory environment that does need to be taken into account.

For example, on the FDA review front, most folks don't realize that if you have a drug or a device that you need approved, you have to pay FDA to review it. So it can cost a couple hundred thousand dollars for FDA to review one of your products because there's just not enough people and not enough funds to go around. Maybe that's where some of this extra money will go. So the industry pays those reviewers to review the product. And I think as the sort of MAHA and DOGE personnel start to see that, that seems problematic from a regulatory capture concept kind of place. So I can see that as being a real focus, how is the review process financially covered under the budget?

And then number two, I would say something that we say here in D.C. is policy is personnel. Or personnel is policy. I always get it backwards. Personnel is policy. So when you're trying to... a lot of folks are trying to read the tea leaves right now. As we've seen, it's just kind of something new every day. When you think about who's in the greatest positions of authority and you think about what their personal policies are... RFK, anti-corruption, radical transparency. We just saw the White House issue an executive order today requiring providers and health plans to be transparent in all of their pricing and costs so that patients have a familiarity with that. So you might not predict that if you're kind of looking at what they've done to date. But when you think of RFK, we know he's into radical transparency. We know he's anti-corruption, we know he wants to bring the patient and the provider closer together. Price transparency, that kind of makes sense. So I try to think of it through that lens, too.

Strategic Intent vs. Market Reactions

Yeah, I think that's really interesting insights, particularly how you're talking about following where the money is going and the investment. So in this case, whether it's research, people are paying to get their drugs reviewed in the review process, but also whether that money is going to third parties and that's a source of inefficiency. You know, we had talked about with CMMI that some of these value based healthcare initiatives ended up actually costing more than saving money because there were third party administrators to that. And the policies can be changing so fast in the FDA. Who would have thought that just this week, with removing the shortage on the drugs that are the Ozempic competitors, semaglutide and everything like that, which was pretty much the lifeblood of these compounding pharmacies who are direct to consumer like Hims. You know they saw their share prices plummet this week and the drug companies, Novo Nordisk and what have you, saw their stock prices rise and all these changes. They're happening so fast from this administration. It's very hard to predict the tea leaves as you said. So I would never be able to do your job, Matt.

I will say I do think it's all very strategic though. I think they don't think this is like a haphazard... I hear a lot of people talking about oh, you know, you're bringing an ax to a surgery or something.

It sounds like orthopedic surgery. All right. Convince me, Matt, convince me. I'm dying to hear how it's strategic. Tell me.

So here's an example. The Laboratory developed test rules. So FDA has said for decades we have authority to regulate laboratory developed tests. 23andMe, all those diagnostic tests that my former employer GRAIL, all of those sort of over the counter but require a physician order test requisition test. FDA said we've got authority to regulate that, but we're just not going to do it. And Congress has said over time, we don't think that FDA should exercise its authority. Finally FDA said we're going to exercise the authority and we are going to regulate LDTs. And now they're going to have to be reviewed and approved just like every other medical device. So there's a huge lawsuit right now in the 5th Circuit challenging the constitutionality of this enforcement regime. You might think that the Trump administration would say, "You're right, industry, we're just going to let this case drop. We don't want to own this case anymore. We don't think FDA should be regulating this stuff." What Trump's DOJ did instead, they said, no, FDA does have this authority to regulate laboratory developed tests and we're going to do it. What does that tell me? That tells me that they kind of made... and this is all my speculation... but it's almost as if they want to make sure that the sort of circle of authority that FDA has is clearly defined before they take the next step that really looks at all of those parts. And I'm thinking for my clients... biotech, medtech, diagnostic companies... it's about the review process. But I think there's going to be a huge sea change in how FDA actually regulates these products in a way that will be much more cost efficient. But before we get to that step, they've got to say, wait a second, no, this is our playing field. This is where we are exercising the authority that we have been given under the congressional voice. So that's one example. But I think about the NIH indirect cost example. You know, when you read the actual policy, it's thought through, it's well cited. It's not just a proclamation. It's a very clear elucidation of reasoning. So I think that was another example. I think that there's a lot of sensational headlines and kind of breathless reporters right now. I was talking to a reporter friend of mine about this DOGE website that I've gotten a little bit frankly obsessed with going through because it's just really interesting that these contracts that the government has. It's like, "Oh, wow, we have a contract for this." And the amount of a contract for that is X. That's very surprising. And he said, "Well, wouldn't you want to just be focused on all of those contracts where people are losing their health insurance and their health plans are going away?" And I understand that there's some piece of that for government contractors. But there's a lack of understanding as to what an actual government contract is, that if you're insured by Medicare or Medicaid, for example, you don't have a government contract that can just be terminated overnight. So there's a level of sensationalism right now that I hope kind of evens out a little bit. And you know, a lot of it's reactive. Significant change, people hate change. But it's an exciting time to be in healthcare and thinking about what the future might hold for this industry.

The "Flood the Zone" Political Strategy

It is. And if I could ask one more question about strategy and about how the government thinks about strategy... One thing that I've learned from looking at the previous Trump administration and how this one has started is that they seem to favor an approach of rapid action, of taking so many actions in such a short period of time that their strategy is actually to keep everyone else off balance. And to me, that is antithetical to how strategy functions in any other organization I have any familiarity with. And I'm constantly trying to wrap my head around that, what that means, will it change the way up and coming leaders in the private sector even think about how they should conduct themselves and what it means to be a leader? Are we going to move into this world where it's just about action for action's sake and forget the rest? I don't know. Are people going to say, "You know, Paravati, that old strategy stuff you learned in business school is all irrelevant now? Just do stuff." I mean, I don't know. Matt, what do you think?

The flood the zone strategy you're referring to, Anthony... there's a lot of stuff that's being written about it whether actually is as effective as they thought it would be. Because when you do a lot all at once, you can get a lot accomplished quickly because it's hard for people to catch up. Shock and awe. But ultimately you're gonna get somebody riled up and opposed to it. And so if there's a large amount that you're doing and more and more people can be opposed to it, you may have more pushback sooner as opposed to doing a trickle kind of strategy where like you kind of with one group, they may eventually adapt to it before you get to the next group. Go ahead, Matt.

Yeah, I mean, I'm with you. I mean, it's hard to tell right now where the dust is going to settle. I think you're right. I think that the strategy is a little bit shock and awe. You know, change is disruptive. Let's do it all at once. We've got a huge mission ahead of us. We've got to just be running fast because we only have four years to really change this system, so to speak. I think there's a whole generation of folks who look to that and say, you know, wow, shaking up the system, it's hard, but that's a great way to go. I think that when you look at Congress, for example, and the demographics in Congress, young folks are conservative and the older folks are liberal. And so I think you're going to see the up and coming leaders like you say, a lot of folks valuing this non-traditional, push the boundaries, Silicon Valley type approach. Move fast and break things.

Impact on Foreign Investment and FDA Efficiency

Yeah. And so what I really had in my mind... is I have the sense that if we behave as a government in a way that's very unpredictable and unreliable, that you mentioned foreign clients, foreign customers, European in particular... they may simply say, "All right, we have this great product. It could change the world. This regulatory environment is so complicated and potentially so expensive and full of blind alleys. We'll just stay out for now." And I don't know to the extent you're hearing people describe this kind of feeling.

Yes. However, we won't know how these changes will pan out for a couple of months. So presumably the idea is that we need to make these changes now so that it is easier in a few months. And then I will also note too, drug approvals have sped up since Trump took office despite the FDA changes. Our clients are reporting they're two weeks ahead, which is unheard of. The foreign companies are more interested in the investment and they'll jump through the regulatory hoops. But interestingly, this is the thought of something. As you were talking, I was in a meeting recently with somebody closely connected to the current administration and somebody in the room was talking about the FDA environment. And they said, "Well, of course the FDA is the gold standard in reviewing medical products around the world." And he stopped her. He said, "I gotta disagree with you. It is not the gold standard. That the way FDA reviews products is inefficient, that there's conflicts of interest that aren't resolved," et cetera. So I think that there is a goal and a mindset to make that regulatory environment easy. Push of a button, turnkey, so that we can get more foreign investment, more foreign companies coming here.

The five minute tax return.

The five minute tax return. It would be amazing.

Future Predictions and Final Advice

So final thoughts since we're wrapping up toward the end of the episode. Matt, what would you tell our listeners who are troubled or concerned or excited about all the dynamic changes in this regulatory environment? What do you predict in the next one year, two years?

Oh, man. Okay, three things. First, role of Congress. I say focus on Congress because there's a lot of really great stuff that Congress is working on and can be doing, especially in things like rare disease. There's a lot of bipartisan support on rare disease, on drug price reform, on overdependence on Chinese biotech. So I would say focus on Congress. Number two, this is advice I gave another group earlier today. Don't be swayed by the sensational headlines or the breathless reporters. Everybody's hair is on fire right now, which tells me that people need to either step back and not pay attention, or they need to dive deep and do their own research. So that's the third point, which is when you do hear about changes that have come down the road, don't just read it in the newspaper or the trade press especially, that's got a lens on it. You need to look at some of these underlying things. The NIH policy, for example. If there's an executive order that comes out, read the wording of that. Because sometimes the media, regardless of which media you're looking at, everything's very dramatic right now. And maybe some of it needs to be. Certainly people's jobs are on the line, and that's always a different difficult conversation. But you got to read the original sources.

Well, thank you, Matt, for being our first guest. Hopefully this was...

Thanks for having me. That was super, super fun.

That was awesome. And Anthony, do you want to wrap us up?

Matt, you did an amazing job. It won't be hard, but we'll make a compelling episode out of this and hopefully have great interaction from our listeners and followers.