We have been living in the Era of Technology for 16 years. Tech dominates our economy and our politics, much as oil did in the generation before it, and manufacturing before that. As I wrote recently, tech has switched sides, moving from being given power in 2008 to seizing it in 2024.
It’s time to see what comes next, even if most people are still stuck on today’s headlines.
In the 1980s economists and politicians saw oil dominating the world as far into the future as they could see. That’s why the Bushes went to war for it, twice. They couldn’t see technology creating a new era of abundance and, in time, making energy abundant by harvesting natural energy resources all around us.
At age 70 I likely won’t live until the end of the current era. But I can see it, just beyond my sight.
It’s the Biotech era. It’s a world where the economy, and politics, are defined by life sciences, by what I called in 2019 “DNA as a Programming Language.” (Strange fact. Gemini says an unrelated genetic researcher, Michael Blankenhorn, wrote the same thing at about the same time.)
The problem for biotech, for medicine generally, is that it’s still locked in an economics of scarcity, caused by the high cost of discovery. Getting from a thesis to an approved medication costs billions of dollars and patient risks make the post-approval liability cost even higher. Americans are subsidizing all this, through a system of medical palaces, of patent-induced scarcity, and a byzantine payment system.
But all this is about to change, with the help of Artificial Intelligence.
The Economics of Medical Abundance
Since 2019, the pace of medical discovery has accelerated, thanks to databases like AlphaFold, which won the Nobel Prize in Chemistry last year.
AlphaFold does for proteins what the Human Genome Project did for DNA a generation earlier. It made protein structures, including their shapes, readily available to scientists around the world.
Now add AI. If you’re looking for a Ph.D research project, you can query AlphaFold and come up with a proposal quickly. AI will get you halfway through the grant and paper writing process. All you need to do then is your experiment, and new techniques like Cryogenic Electron Microscopy (Cryo-EM) speed that process along.
The productivity of biochemistry research labs is about to take some giant leaps upward. Work that was previously done by hand will now be machine-assisted. This will bring more competition to the drug industry. We’re already seeing it, just not in pricing. There are multiple patented drugs available for many conditions, with biosimilar makers knocking on regulators’ doors, waiting to get in.
It’s European and Asian companies, assisted by their governments, who are going to transform the economics of all this. American medicine is too bureaucratic and law-bound to allow it, and all our incentives are geared around scarcity, but that’s not true elsewhere. Visit a hospital in Europe sometime. It’s not a palace. It looks like an office building. Price the drugs required in a common formulary there. They’re much lower, because the incentives of the medical system are geared toward lowering costs.
The Value of Life
There are monopolies everywhere in American medicine. They’re all based on the idea that sales and profits are maximized by restricting supply as much as possible, just like the oil industry was 40 years ago. But what if market incentives were different, and were proven to deliver better financial results to all the industry’s players? That’s an economic breakthrough that will drive a fundamental change. It’s coming because AI will make it happen.
One of the things that has most angered me about medicine in the last decade has been drugmakers pricing patented drugs based on the value of human life. The concept is Quality-Adjusted Life Years. It results in what Monty Python called a “complete cashectomy,” removal of all funds from the patient. It needs to go away, and it will once abundance is shown to pay drug makers more.
This is a process that may take 12 years to work out, but it’s bad news for today’s tech giants. AI may accelerate growth in many different directions but imagine growth accelerating in the cost-value of life. At age 70 I probably have another active decade in front of me. My odds of that are as good as my grandparents were at 60. Already we’re seeing people active and working in their 80s and their 90s.
Maybe I will see the next change. Wouldn’t that be something?
