On May 20, Willy hosted our Walker Webcast with his guest, Dr. Margaret (Peggy) Hamburg, the former Commissioner of FDA and current Foreign Secretary at the National Academy of Medicine.
Walker & Dunlop’s CEO, Willy Walker, and Dr. Hamburg discussed numerous topics, including:
Willy Walker is Chairman and Chief Executive Officer of Walker & Dunlop. Under Mr. Walker’s leadership, Walker & Dunlop has grown from a small, family-owned business to become one of the largest commercial real estate finance companies in the United States. With a $32B transaction volume in 2019, Walker & Dunlop is ranked top three with Fannie Mae, Freddie Mac, and HUD.
Dr. Margaret Hamburg is an internationally recognized leader in public health and medicine, and currently serves as foreign secretary of the National Academy of Medicine and chair of the NTI | bio Advisory Group. She is a former Commissioner of the U.S. Food and Drug Administration (FDA), having served for almost six years. As FDA Commissioner she was known for advancing regulatory science, streamlining and modernizing FDA’s regulatory pathways, and globalization of the agency. Before joining FDA, Hamburg was founding vice president and senior scientist at the Nuclear Threat Initiative. Previous government positions include Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services, Health Commissioner for New York City, and Assistant Director of the National Institute of Allergy and Infectious Diseases, National Institutes of Health.
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The Search for a Vaccine with Dr. Peggy Hamburg
Willy Walker (WW): Thank you Susan and thank you everyone for joining us. While the COVID crisis has appeared to pass for many people in America there are thousands of frontline workers who dedicated themselves to fighting this crisis and are sick with the coronavirus today.
I'd start today by, first of all, thanking again those frontline workers for all they did during the surge or peak of this virus and also suggest to everybody on this call that we can't forget their sacrifice and should do all we can to support them medically as well as economically over the coming weeks and months.
After spending the last eight Wednesday's focused on the economy, commercial real estate, leadership, as well as mental health, I am really thrilled to have Dr. Peggy Hamburg, former Commissioner of The Food and Drug Administration, join me today to discuss the pandemic, how we got here and what we can and should be focused on going forward. It's an honor to have Dr. Hamburg with me this morning and I'm extremely grateful to her for her time and also her thoughts.
Before turning to Dr. Hamburg, I have a couple thoughts on the past week.
I sent a message out to all Walker & Dunlop employees last Friday saying it had been a pretty tough week from a news standpoint, there were another three million unemployment claims in the United States, states were arguing about opening and not opening, the California State University system said that they would teach online starting in December and some pretty grim testimony on Capitol Hill about a long dark winter. I started to wonder whether I needed to get a big long sword and one of those animal pelts that they wore in Game of Thrones and get ready for the “White Walkers” to invade Colorado from the North.
But then Monday arrived and with Moderna’s positive news on their phase one clinical trials and their COVID vaccine the stock market rallied over 900 points, Walmart announced incredible earnings on Tuesday, every state in the union is either fully or partially open, Notre Dame announced day before yesterday that students will return in the fall and all of a sudden everyone seems to be kind of moving on.
This entire crisis has been an emotional roller coaster for Americans and for the world and I think it's fair to say, unfortunately, that ride is not over and so a couple thoughts along those lines.
As Peter Linneman and I spoke about last week, we seem to have lost the plot a little bit on why we shut down the economy and as we open the economy back up let's also not forget about the reason we did shut down the economy. This virus is exceedingly virulent and dangerous and as Dr. Hamburg will tell all of us in a moment in much more detail and with much more knowledge about it than I have, we cannot forget that is out there and it is likely to be out there for years if not decades to come. And so as we start to open back up, and whether the summer months slow the virus down and whether we have a second wave, I think it's really important that as much as the positive news makes all of us feel good and the markets go up and we all sort of say we're going to get back to it, we also have to keep in the back of our minds, always, that the virus is still there and it is still going to attack people and it's still going to kill people.
The other thing that I've talked about a number of weeks is the hospital capacity that we drove to create in the United States by shutting down the economy. Back to the point on losing the plot. The plot was in March, shut down the economy, get everyone to shelter in place, build the hospital capacity, build the testing capacity and continue to work on therapeutic and vaccines so that we could effectively fight this virus.
We have built that medical capacity across the United States. The Army Corps of Engineers has built 37 makeshift hospitals in the United States to be able to deal with a surge of cases so that we don't have what happened in New York City. But now all of a sudden that capacity isn't needed, and everyone is sitting there saying now what do we do?
In Washington, D.C. I spoke yesterday to the head of the D.C. Convention Center, my friend Greg O’Dell, who said that there are 400 beds sitting in the D.C. Convention Center today that are not likely going to be used and the question now is how long do we keep that capacity in place? And Greg and I talked about his discussions with the Mayor of Washington, whether that space can be repurposed to actually bring in conventions in Washington over the summer - unlikely that there's another commercial use for it. But will we as a society sit there and say leave the beds in place because we might need them come September, October, November if we have a second wave, and I very much look forward to hearing Dr Hamburg's thoughts on that.
The next one is rules and regulations. As we are seeing across the country both companies as well as governments are establishing rules and regulations to get back to work, to get back to acting like a society.
Jet Blue announced yesterday that they are not going to use any of the middle seats in any of their airplanes. United came out today and said they are still using the middle seats in their airplanes. So you as a consumer have a choice - either go fly United and know that that middle seat might be taken or fly Jet Blue and know that they've blocked off those middle seats and you won't be sitting with somebody in the middle seat.
Those are commercial decisions. There are also decisions that states are making. There are states that are saying you need to wear masks in public spaces, there are others that are saying you do not, and I'm very much looking forward to Doctor Hamburg's view on masks. But I would only say this being in a state that opened up earlier than most - whether masks have great efficacy in fighting against this virus or not, and obviously Doctor Hamburg will give us give her viewpoint on that in a moment; I view it as a courtesy to our fellow citizens to wear a mask. And I fully realize and I've read a lot about Americans across the country feeling like their civil liberties have been infringed upon by governments, whether it's saying that they can't go to work, they can't go to their place of worship, etcetera, and that there are many people who in not wearing a mask are trying to express their civil liberties to not do so.
I view masks similar to the way I view lining up to get on an airplane plane or getting into a concert. When I lived in Latin America for almost a decade, it used to always drive me crazy that there is no culture in Latin America about forming lines. You could be getting on an airplane in Buenos Ares and you're in the line, in the queue, and someone will just dart in front of you, walk right in front of you, get in the line and just act as if there's nothing wrong with doing that. And clearly as an American who grew up here with social norms that said when you get in a queue you respect that the queue is there, that didn't exist in Latin America. And we can have lots of debates on why it doesn't exist in Latin America and it does in the United States. But as I have watched people's reaction to others wearing masks in the state of Colorado, whether out on a hike, going into a Starbucks, or just walking around on a mall, it gives people who are afraid of this a sense of security. And if we as Americans can make each other feel a little bit more secure why wouldn't we go that extra mile to make others feel good about circulating in society and getting everyone back up and going. And at the end of the day if it slows the spread of the virus, if it saves illness and lives, obviously, it's in the best interest of everyone.
The next point is there is reporting this morning that the Republicans in the Senate - we all know that the bill that was passed in the House last Friday as it relates to the extension of the Cares Act which is being called the Heroes Act, was dead on arrival. There was no expectation that the Senate would pick that bill up as it was, and at the same time there is talk this morning that the Republicans are basically saying that they want to wait to see how the economy evolves before they put any other stimulus spending in place.
I would only caution that as Peter Linneman said last week in the webcast, if we re-employed two million Americans a month for the next year, which would be a fabulous take-up in most people's models as it relates to the GDP growth and the economy getting back on track, we would still have more people unemployed in the United States a year from now than we did at the worst point in the Great Financial Crisis.
We are going to need stimulus. We are going to need to have the security that people can continue to eat and live in the coming months as this economy gets back up and going. And so while I greatly understand the concern about over stimulating the economy or spending too much money, I would only say to anybody on this webcast who has relationships with anyone in the United States Senate, please push them to seriously consider some type of stimulus Bill to extend the provisions in the Cares Act, particularly the boost to the unemployment benefits of $600 per week.
The final point that I would make before bringing in Dr. Hamburg, at Walker & Dunlop last week we awarded two investment sales, multifamily investment sales properties to buyers. Now as those people who know Walker & Dunlop know, awarding a $54 million deal and a $42 million deal is in no way news, we do huge volumes of business and I wouldn't even contemplate saying that if it were not the second week of May 2020 in the midst of the COVID crisis. It is clearly headline news. Because if you just dial the clock back one month, a month ago we were very focused on rent collections, forbearance requests, and defaults. One hundred percent defensive measures. Everybody was thinking that the economy was going to melt, that rent collections were going to fall off a cliff, and that there were going to be significant requests for both forbearance as well as foreclosures in portfolios like Walker & Dunlop has.
And so here we are now a month later and we are talking about things such as reemployment numbers on a market by market basis, on rent growth or declines by a MSA by MSA basis, new supply, and we awarded two acquisitions last week. That is an incredible shift in the overall dynamic of the market in only a month's time. And while I would say that it's sort of like saying that the airlines running at twenty percent occupancy or load factors they are actually flying so I guess it's fair to say that the multifamily investments sales business is flying again. But we’ve got a long way to go as it relates to getting the market back to normalization, but it is very encouraging to see that shift in thinking and in focus on data in only a month's time.
So that's my quick monologue as it relates to things we've seen over the last week. It is unbelievable how quickly the sort of storyline has changed and now let's go to the real issue of the day which is health. And so, Dr. Peggy Hamburg, she went to Harvard College and got her MD from Harvard Medical School. She was the 21st Commissioner of the Food and Drug Administration and is currently the Board Chair of the American Association for the Advancement of Sciences or the AAAS. Forbes Magazine has named Doctor Hamburg one of the 100 most powerful women in the world multiple times, and it is really a true pleasure to have her here with me today.
Dr. Hamburg let me dive in first and just say back in 2008 when you were with the Nuclear Threat Initiative, you and Jeffrey Levy at George Washington University co-authored an extensive research report titled “Germs Go Global: Why Emerging Infectious Diseases are a Threat to America.” And your first bullet point in that paper, which is extensive, talked about SARS and the H5N1 Avian flu virus.
You went on to state that newly emerging and re-emerging infectious diseases will continue to kill 170,000 Americans annually. You say newly emerging and re-emerging infectious diseases will pose a rising global health threat and will complicate U.S. and global security over the next 20 years. It only took us 12 years from when you wrote that. And in “Germs Go Global,” you lay out strategies at the local, state, federal and global level to prepare for what we are dealing with today. So, I guess the question would be where did we go wrong or who didn't read your paper?
Peggy Hamburg (PH): Well thank you, first, for inviting me to be here and to speak with you and your viewing audience about a topic that I have been working on now for several decades. That wasn't the first report that I was involved in that warned of the seriousness of global pandemic.
The most recent one that I was involved in was published in November of last year and its title involved the terms crisis and complacency. And I think part of the problem is that over many, many years people have gotten used to the status quo and even when there is an indication of the problem, be it SARS or a serious flu season, or an Ebola outbreak, admittedly in another part of the world, or Zika which threatened here perhaps more seriously than Ebola, but people get worried and they want to do something. And then they forget - other priorities crowd in and people don't think about health security in the same way they think about other kinds of security. We would never be worried if we invested in aircraft carriers or nuclear submarines that went unused, we'd be glad that we had that capability to protect our nation but glad that circumstances didn't require use.
With health, unfortunately though, people have not really been willing to invest in a sustained and committed way necessary to build the infrastructure for preparedness and response that we need. Now things are better than they were when I first started working on these issues several decades ago but they haven't been maintained and practiced in the ways that are necessary and, unfortunately also, I have to be honest and say we did not mobilize as soon and as comprehensively as we could have and should have in this country and other places in the world to reduce the devastating burden that this novel coronavirus has wrought.
WW: You mentioned aircraft carriers and sort of defense policy. Is it not correct that the first real move to putting major funding behind viruses was in 2004 when Congress passed the Project BioShield? Can you talk for a moment about how Project BioShield sort of kicked off some real investment as it relates to both the biological warfare as well as vaccine development against viruses and did that actually get us headed in the right direction and then, if so, why did it falter?
PH: Well I would put our serious commitments and investments a little bit earlier than that, although BioShield was an example. It took the bombing of the World Trade Center in 2001, and then the Anthrax letters, to I think, really put catastrophic threats, including health threats, on the radar screen and people really started to think about it mainly in terms of biological terrorism. The deliberate use of biological agents, pathogens to do harm, but also a growing recognition about our vulnerabilities to emerging pathogens and infectious diseases as serious natural threats.
BioShield was an effort to recognize that we couldn't wait until the crisis happened to start to develop important medical countermeasures to address them and so as a way of trying to stimulate through a form of public-private partnership, government, investment and encouragement to companies to start to create necessary products.
And, in fact, President Clinton spearheaded some important programs that laid the foundation for this work and I was Assistant Secretary for Planning and Evaluation at The Department of Health and Human Services at the time, working on a number of projects, including what was the precursor to the National Stockpile. The Strategic National Stockpile that you've heard a lot of discussion about in recent weeks made the first investments to create smallpox vaccine in case that particular pathogen, which has been eradicated as a naturally occurring disease, might reemerge as a biological terrorism weapon and began to do the cross government, all of government, planning and preparedness exercises thinking predominantly about a flu pandemic but other things.
So, there's been a stepwise effort but really enhanced by that profound impact of 9/11 and the Anthrax letters. Elaborated bit by bit – Ebola, SARS, the threat of pandemic flu H1N1 in 2009, and hopefully this COVID-19 experience will really solidify both the political will and the public and policy commitment to building the infrastructure for preparedness in this country and around the world that we need to be better prepared for what the future will surely bring.
WW: Before I move off that, just one thought. If we are lucky enough to come out of this with some real focus on building our preparedness, one of the numbers that shocked me as it relates to Project BioShield was that when authorized it will call for $5.6 billion of funding over a 10 year period and by 2008, only four years later, that number was down to $102 million authorized by Congress in the 2008 budget.
How can we as citizens - you've been right in the middle of all this as it relates to appropriation bills and getting funding for things like HSS and other things - how can we as citizens, if there is legislation that is passed that calls for this kind of funding, keep the sort of “heat on” if you will and not watch something that was very innovative at the time, to put huge amounts of capital to it, and then all of a sudden only four years later watch the actual funding fall from what was supposed to be $560 million a year down to $102 million a year?
PH: Well this is, unfortunately, the cycles of complacency. When there's a crisis, there's mobilization and there's a lot of rhetoric about commitment and determination to do the right thing but then other priorities crowd in, the world moves on, and if the problem isn't right in front of people they tend to forget about it.
It is absolutely essential that now as we both address the problems we're grappling with day to day responding to COVID-19 and thinking about what's needed for the future that we make sure that we make the right investments in that we commit to sustained investments in these critical areas. And this is an area where the stimulus bill activities, that you were talking about earlier, can marry what's needed from a public health infrastructure perspective and from a biomedical product innovation perspective. We will be better day to day responding to routine problems of public health and medicine if we strengthen our public health capabilities. We will be better off as a nation in terms of the health of people, the health of communities, that health of our healthcare system, and the health of our economy, if we really shore up our investments in life sciences research and biomedical product development. We have taken for granted our leadership in these areas and the importance of these areas to the health of people and the health of economies and we can't afford to do that anymore. But it's a wonderful opportunity to marry what's needed in terms of rebuilding our economy, not just as we found it before, but anticipating where there are opportunities and ensuring improvements in our health and well-being.
WW: You're talking about biomedical development. Can you talk for a moment about BARDA, the Biomedical Advanced Research and Development Authority? I never even knew what BARDA was before this crisis emerged and obviously there's been some intrigue around BARDA and the director of BARDA recently but I don't want to go there. What I want to go to is, from what I can see from outside, BARDA is basically a biotech venture capital firm inside the U.S. government. Is that a fair way to look at BARDA? And as you talk about these investments how important is the role that BARDA has played in partnership with the private sector to at least get us to where we are today?
PH: Well you mentioned BioShield earlier. BioShield kind of morphed in some ways into BARDA but it's part of this desire to be able to really stimulate important product development by incentivizing companies to work in areas where the market forces wouldn't necessarily lead them. Developing drugs or vaccines against either non-existent but potential threats or an outbreak that will be cyclical in nature but isn't irresistible to a drug company when you can be making an anti-ulcer drug or a cholesterol lowering drug that you know there's a market for, you know people will use, and you know that they'll use it every day for the rest of their lives probably.
So, trying to create market incentives where they don't exist is part of the rationale behind BARDA. It also provides a locus in government where you can bring together different expertise and knowledge bases to guide sound decision making about what's needed. To look, drawing on the intelligence community, and the Department of Defense, Agriculture, Health and Human Services, the development agency USAID and others, to sort of look in one direction at what are the unmet critical needs, what are the emerging potential threats that we should be worrying about, and what's the science and technology capabilities that are emerging so that we can build a pipeline of new products. So, it's a very important enterprise, it has been underfunded from the very beginning, but it has been important in terms of supporting work that is now being elaborated as we're responding to this crisis. But it isn't enough, and it also is very U.S. focused and we've seen some similar kinds of enterprises undertaken to help address a set of important global needs.
WW: So last week President Macron called in the CEO of Sanofi and said that he'd heard that Sanofi was going to, if their vaccine got approval and was ready to go, that they would give it to the United States first because of BARDA’s $30 million investment in a trial that Sanofi has been undertaking for this vaccine.
Talk for a moment about the friction between drug distribution and should the French government be able to restrict Sanofi from where they distribute the drug? Do you think it comes to the United States first? You've been right in the middle of all of that. I mean, first of all, from an American standpoint it sounds great that BARDA made an investment to help Sanofi and they say you'll get it first. There's obviously a world out there that is being afflicted by this virus just as much as the United States and you would think that there should be some type of general distribution of this vaccine around the globe. How do you look at all that?
PH: Well it's a very complicated challenge and it brings up some of the tensions that we have been witnessing between what's in the national interest versus the global interest and what is the right balance. And at the end of the day, when you're in the midst of a global pandemic, it is a global problem and the solutions have to be global in my view. And we will only be truly safe in this country if we are also concerned about helping to eliminate the disease and address it in other countries around the world.
One of my great mentors, Dr. Joshua Lederberg, a Nobel Prize winner, once said “A disease in a remote part of the world in the modern era can be in our backyard tomorrow,” and I think that is something we have to always keep in mind. But every country is worried about their ability to access something as critical as vaccines. In the U.S. we're very fortunate that we have a richness of resources, and a mobilization of our scientific and research community, that is moving forward rapidly to develop medical countermeasures that we will need.
But, in fact, this has been a global scientific enterprise and our ability to be where we are in vaccine development was because Chinese scientists posted the genome of this novel coronavirus very early on back in early January when the outbreak at that time was just emerging in China.
So, our ability to both protect ourselves from disease and to advance the science does depend on international scientific collaboration and we shouldn't forget that. But I understand that as leaders every country is going to want to protect their citizens and I think we're going to have to figure out a way to ensure that we can both serve our nation's best interests and not forget that we are part of that global community, in fact, our safety and security does depend on addressing those broader needs. And frankly, the best way to reduce those tensions is to try to advance the science and ensure manufacturing and distribution so that we can get the largest volumes of vaccine developed, produced and distributed so that it doesn't have to be the richest countries trading off against the poorest and other such scenarios.
WW: So I want to turn to that in a moment as it relates to vaccine development and distribution but before we get to that, when the FDA has the responsibility for oversight of more than $2 trillion of medical products, food and other consumer goods that are sold into the American population on an annual basis and there are something like over 200,000 different companies from around the world that all sell that food and cosmetics and medical products into the United States. You were in the seat at the FDA for six years. With such a broad mandate and just such a huge amount of our economy to regulate, parking what we're focused on today as it relates to the virus, where did you spend your time when you were in that seat and what were the hotspots as it relates to either things like we're dealing with today or everything down to the quality of meat, to whether there are pathogens in cosmetics, to all sorts of other things that I'm sure hit your desk during that six year period of time when you had such a broad mandate to protect the United States consumer.
PH: Well the FDA is a remarkable and frankly underappreciated public health agency. It is a very science based, science driven agency with a public health mission that actually affects every single American and people around the world every single day whether they know it or not, because FDA is regulating products that amount for probably some 25 cents of every dollar that consumers spend on products in this country. And a huge range of things from drugs and vaccines for humans and drugs and feed for animals, to the majority of the food supply in this country, to cosmetics and dietary supplements, and medical devices and things that emit radiation. And during my tenure at the FDA we also took on the responsibility for regulating tobacco products, very important from a public health perspective given the burden of disease caused by smoking and now other tobacco products. So, the responsibilities were huge.
When I took on the job, to be honest, I didn't fully understand everything that the FDA did and over the course of the six years probably every day I learned about new responsibilities that we had. But I also thought about it as a domestic agency and as a global public health person I was sort of sorry that I thought I was going to not be able to work on as much global public health. But the truth is that many, many, many of the products that are used in the U.S. are coming in whole or in part from countries all around the globe and often through complex supply chains and that does require engagement with partners around the world, other regulatory authorities, business, and the public to really be able to ensure the quality and safety of those products. So, we spent a lot of time on a set of issues that frankly, again, a lot of people weren't so interested in but have really come into clear focus about why they matter now.
For example, about 80 percent of the active pharmaceutical ingredients in products that are used here are coming from other countries, predominantly China and India. And when you see the dislocations and disruptions in supply chains that then immediately creates potential problems, not just for products that might be needed to respond to COVID-19, we've seen it in medical supplies like personal protective equipment as well, masks and gloves mainly come from China and Asia, but also for products that are needed to deal with routine medical problems.
So, these things really really matter. At the FDA you're in this unique role where you are responsible for trying to manage and oversee the flow of products and the quality and safety of products and you're doing it frankly without both the financial support and often the political support that you really need to do your job and do it effectively. And it is a unique agency, if nobody does it there aren't backstops, there aren't private entities that step in and do the FDA job, although the FDA job of course is a partnership with the private sector and with others to be able to fulfill this mission of promoting and protecting the health of the American people.
WW: You talked previously about vaccine research and development as it relates to viruses. It seems like we've done pretty well on developing any bacterial medication but very poorly on developing any viral medication. Why have we been so good on the bacteria side and so bad on the virus side?
PH: Well it's a question of what are the easier targets for drug development in terms of bacteria versus viruses. Viruses can be very tricky because they get into our cells and they live by actually sort of hijacking the machinery of our own cells, but you don't want drugs that kill off your own cells or make it hard for your own cells to function. So, the antivirals are a more challenging target in many ways but we've seen great progress in critical areas, one area being HIV/AIDS which emerged while I was a medical student as an unknown disease killing otherwise healthy young people for the most part in their prime. And over the course of my medical training it has changed from being an always life-threatening disease to being a chronic disease managed with antiviral and other drugs that treat the complications of HIV/AIDS. But that's been extraordinary, and it gives me great optimism about the power of science to transform disease when we look at where we are with COVID-19.
The other issue goes back to our earlier discussion about BARDA. Antimicrobials, drugs to treat a range of different pathogens, has been an underdeveloped opportunity in terms of both science and medical need because the market isn't as robust. Antimicrobials are drugs that are used intentionally for a limited period of time to treat the infection, whatever the cause and, again, if you're thinking about drug development and you're thinking about what the market looks like - and drug development no matter what you're working on can be a risky, costly, timely process - there are certain markets in the chronic disease domain that are much more attractive for companies to pursue. So, there's been a lot of concern recently that we just simply don't have as many antimicrobial drugs as we would like to have in our armamentarium. And, of course, when you're talking about unusual diseases or unexpected emergence of new diseases the opportunities are, of course, even more limited.
WW: So, it's less a science issue and it's more an economic incentive issue.
PH: It’s of course both but the economic incentives really matter.
WW: Yeah. There was a quote that I read from a molecular biologist at the University of Texas, Austin, Jason McLellan, where he pointed out that of the six human coronavirus’ known before the Wuhan outbreak, the two that caused SARS and MERS killed only a few thousand people combined and the four others cause the common cold and so his quote was, “I'm not sure you can fault companies for not doing a bunch of drug development on coronaviruses.” Is that, I mean I read that and it sort of makes sense in the sense that people weren't investing in something that didn't have a financial outcome to it. But then it scares the heck out of me about what happens after we get through this and future developments. Does the government have to play a role here, Peggy, making sure that we stay on the front foot as it relates to protecting ourselves in the future?
PH: Well I think there is no doubt that some of the kinds of public-private partnerships we've been talking about and some other models that I might touch on, really do make a difference and have proven their value in responding to COVID-19.
There's an organization called CEPI, the Coalition for Epidemic Preparedness and Innovation, which emerged out of the Ebola outbreak with the recognition that we needed to try to get further along in developing medical products against pathogens that may have pandemic potential.
And CEPI in its early days decided to focus on vaccines in particular, and it was begun by a couple of major foundations - the Gates Foundation, the Welcome Trust based in the UK and some countries that stepped up to the plate to make major investments. Importantly, including Norway, which hosted CEPI and provided the Secretariat. And CEPI was already working on MERS vaccines at the time that this novel coronavirus emerged. It quickly pivoted to reorient those projects towards this new coronavirus when the genome was posted. By the third week in January they had three vaccines that were in development and I think now have a portfolio that's nine, plus developing some new platforms. And they've been an important funder in making sure that the early development, including early human clinical studies, goes forward. And Moderna, the first vaccine that went into human studies, was one of the ones that CEPI was helping to support.
So that's I think a model that works that we need to continue to develop. But the ecosystem for medical product development, whether it's a vaccine or a drug is complicated, it's risky, it's time consuming, and it's costly and so we need to have innovative strategies to be able to both ensure the proper funding to get us through the process and also we need to be thinking about all the different strategies that can be put in place to modernize and streamline and make as efficient as possible all of the steps required to end up with products that work, and are safe, and will be beneficial to people in need.
WW: You talked about the Chinese posting the DNA to the virus back in the third week of January and also that Moderna was into trials very soon thereafter. If we look back at HIV/AIDS, and we still don't have a vaccine to HIV/AIDS and that's been decades of research, what has changed in the medical community, in the biotech community, to allow for Moderna to get what the Chinese posted publicly in the third week of January and be into clinical trials; I think you told me previously eight or nine weeks later to be into clinical trials. That seems like, I mean we used to wait decades for companies to start getting into testing and now all of a sudden in a period of nine weeks you went from the technology or the DNA of the molecule being put out there into actual human trials. What's going on there? It seems, as an outsider, it's both reassuring to hear that speed and at the same time I just have no concept to how the technology is working to get us there.
PH: Well, it's a very complicated question. Let me step back just a moment to make sure a couple things are clear. HIV vaccine has long been a goal. It hasn't been achieved because of the complexity of the science and the way that that virus causes disease and what's necessary in a vaccine. We have made huge progress as I said with drugs but it's not for a lack of quality science and real commitment to trying to develop a vaccine, it is a very hard scientific challenge.
The HIV vaccine situation is though, a very powerful reminder about over promising. Back in 1984, Secretary Heckler who led the Department of Health and Human Services, promised there'd be an HIV vaccine in two years. Well, we're in 2020 and we're still waiting. So it does make me nervous now, in the era of COVID-19, to hear some of the promises being made about when we will have a vaccine when we really don't know because we have to let the science drive the decision making. But what is exciting and important is that everything is being done to try to streamline, as I said, that process as much as possible.
And we do have remarkable science now and tools that we didn't have in the early days of HIV/AIDS and we have the opportunity now to not only be developing vaccines using our traditional vaccine models that we know pretty well from the range of vaccines that we've all had as children and other vaccines that are in current use. But also, there are a number of novel vaccine strategies that are now under way and this one that we've been referring to, the Moderna, which is what's called an MRNA vaccine, is a novel vaccine strategy. It holds a lot of promise and there are a lot of reasons why people are optimistic that it will be able to achieve its important goals and be scaled up to make lots and lots of vaccine - probably not enough vaccine for the world - but we also just don't know, we don't know enough.
This week, as you mentioned, have gotten some promising results, but mind you, those are results on a subset of an already small cohort of individuals who got the vaccine as the first phase of a longer vaccine study process to assess safety and help to determine dosing and whether it could elicit an immune response in those who got it. So these are very, very early days, but it is extraordinary how fast things have moved and getting that genome, it was actually I think January 10 or 11th that the genome was posted, enabled rapid mobilization of the scientific community with respect to vaccine development.
WW: So, in 2009 you wrote an article in the New England Journal of Medicine where you said that in the domain of medical products it's been said that the FDA has just two speeds of approval - too fast or too slow. Is there any way we don't go too fast this time?
PH: Well one of the great things about the FDA Commissioner job was that someone was always mad at you because whatever decision you made it wasn't what someone or some group wanted and this question of what's too fast, what's too slow goes to the heart of that.
And with vaccines safety really matters hugely because you're giving vaccine not to treat an existing disease that has put that individual at risk, you're giving it to a healthy person to protect them from becoming infected and all of the complications that can then occur, so you want a vaccine that works, and you want to make sure that it's safe, and there has been a standard process of making those assessments.
Here nobody wants to abandon the criteria for safety and efficacy, but we want to see if we can find ways to move more quickly. Some of that involves applying new science to our approaches. Some of it involves taking more risks from a financial development point of view as well. Normally you do the first phase, which is the safety studies in young, healthy volunteers. You collect all of that information, you analyze it, then you decide whether you're going to go to the next stage of trying it in more people. As you try it in more people, you're going to need more vaccines, so you scale up your manufacturing capability but you're doing all of this in a sort of a stepwise way, not making investments and making more vaccine until you're really sure that you're going to get to the next stage, etcetera. Here people are sort of collapsing down some of those phases in order to move as quickly as possible and it may mean that there will be some big and costly sort of burnouts but I think that companies, governments and the importance of this enterprise for the public good has motivated people to be willing to take on those risks.
WW: Are there any - for instance, the emergency authorization of Remdesivir. There are some, if you will, shortcuts that the FDA can take as it relates to - so we saw that emergency authorization of Remdesivir and whether it can get kind of scaled up and its efficacy - I'd love your thoughts on - but the more I think important question in my mind is as it relates to clinical trials. As you said, the Moderna trial had 45 people in it and the Stat article that came out yesterday that sort of undermined it a little bit was that there were 45 people in the trial but the information they released was actually only on eight people. And so, the real question is, it wasn't on all 45, it was only on eight, so is that a set that gives you the ability to say positive results? And that's why their stock price on Monday shot up 30 percent and yesterday shot back down 30 percent.
The question I have for you is it takes time to put these vaccines into people, to test them, to see them, and people are talking about phase two in the summer months and then into phase three in the fall and then you get the lines building up to develop the vaccine and everyone's kind of trying to look at what's the best case scenario. And keeping in mind that you just said that the former head of the FDA in 1984 said that we'd have an AIDS vaccine in two years and we're still waiting for it.
But talk through are there any shortcuts to be taken or are we without a doubt waiting until early 2021 to actually have a vaccine widely distributed in sort of the best-case scenario?
PH: Well, I don't honestly see any way that we're going to be able to both develop and assess a vaccine in terms of putting it forward into very broad consumption in the marketplace and manufacturing it in order to achieve that goal by the end of this year. It is theoretically possible if absolutely everything went right and there was huge galvanization of all the different partners, but it seems like really wishful thinking to me.
I do think we're going to have a lot more information about not just this one product, the Moderna MRNA vaccine, but other vaccine products as well over the course of the summer, into the fall and we will be beginning to sort of prioritize what are the most promising vaccines and be investing in not only completing the clinical studies but building the manufacturing capability and making sure we have everything that we need in terms of ultimately distributing it to people in this country and around the world.
I am very, very concerned about over promising. Many, many people and companies and institutions are sort of counting on the vaccine to be the gateway to a full reopening and a return to some kind of meaningful “new normal” and we have to recognize that, that is the goal we all share but there are many uncertainties between where we are now and that outcome. We would love to have a vaccine that was fully protective but that may not be the case so there may still be vulnerabilities. We may have a vaccine that will require multiple doses, or at least a boost and so that again adds to the volume of vaccine that needs to be manufactured and the time to get the fuller protection.
So, there is not a clear guide path between where we know we want to be and where we are now and so I think we really do need to be cautious so as not to disappoint people, number one, and also not to create a backlash against vaccines and, for me, I worry about against the scientific enterprise. We live, unfortunately in a world, where there has been a lot of diminishment of the role of experts and expertise and the value of science by leaders and in various components of the media and that's a very dangerous thing. We've seen the ability of the anti-vaccine movement to really penetrate and take hold in communities across the country and elsewhere, and we don't want to add fuel inadvertently by over promising what science can deliver and when, to that movement either. So, there's a lot at stake here, most importantly the health and safety of all of us.
So, I say one step at a time. Let's not abandon scientific rigor but let's do everything we can to move as swiftly and surely as possible. And let's not view this as a competition between companies, a competition between vaccine categories and approaches, or between nations, but a competition against this terrible devastating virus.
WW: I would say it has been heartwarming and impressive to see companies like J&J, Sanofi and then the efforts of the Gates Foundation to actually start building manufacturing lines, as you said, that may go unused but just to try and get ahead of it. And they're investing hundreds of millions of dollars if not billions of dollars in building these lines. And you think about a car manufacturer would go out and start to build some futuristic car without actually having any orders for it and that it might go to zero, it's really quite something.
So, between now and when we do or don't have a vaccine, testing is an area where lots of people have been focused. There are, it seems like every everyone's got a different number on how much testing we need to get out there. The Harvard Global Health Institute says that we need 6 million tests per week. The Safra Center at Harvard calls for 5 million tests per day, increasing to 20 million by July. How, I mean are we going to get ourselves to a point where we can sort of test ourselves to a point where society can get back to functioning at a relatively normal rate?
PH: Well I think that there have been many efforts to sort of model out what is needed and the numbers, as you say, have ranged a lot. I think the one thing that is clear is that we don't have as much testing as we need and the testing we have Is a bit fragmented and, unfortunately, some is underutilized because we don't have the other equipment you need to go with those tests - the reagents, the nasal swabs, etcetera.
So, we do need continued work to rationalize our testing and make sure that we have adequate availability and access. Testing alone doesn't solve the problem either. Testing has to be married to a public health system that can enable us to identify those who are infected, make sure they get the care they need and make sure that they are isolated so they don't continue to spread, and can also do contact tracing to identify those who've been exposed and help to make sure that they aren't infected and won't spread.
So we need a system that exists but is underdeveloped and in the context of COVID-19 we really have to ramp up and the time to do that is now, the time to ramp up has past, we are behind the game and we need to do better. So we have to be working on all of those things and we need testing not just to be able to undertake those tasks, but we also need it to do what's called community surveillance, to be able to monitor where the virus is, how it's penetrated into different communities and where it may be going.
Because I think, especially as we start to see different levels of opening up in different places, we need to be able to identify where a hotspot might be emerging so we can go in and quench it as quickly as possible to contain it so that we don't have continuing cycles of spread and disease and we certainly don't want to be in the position, that we may well be in realistically, where we start to loosen up and then we have to clamp back down because of resurgence.
WW: So, I have one final question for you, and I've got a thousand other questions I could spend a couple more hours talking to you about. but, as we look back on this, given all of the research that you have done as it relates to global health and the numbers of people, millions on an annual basis who die from malaria or from TB, as we look back on this after hopefully we get to the other side, the last six to eight weeks, the lockdown, will we look back on it say that was exactly the right thing to do? Or will we look back on it and say we overreacted to the issue.
PH: I think we need to do a deep dive when this is all over and we need to be starting some of that analysis now about the relative benefits of different interventions. There is no doubt that we did have to flatten the curve. I think we will look back and say that we wished we had addressed that issue earlier, that if we had moved more swiftly we would have been better off and we would have been able to limit the number of cases, the number of deaths, and the extent of spread of this novel virus.
But I think that what we really need now is to recognize that we have most of the same vulnerabilities now that we had earlier on, they haven't gone away. We still have a very large percentage of our population that is completely vulnerable to infection. We don't have immunity. We've been hunkered down in our houses protecting ourselves from getting infected so, in fact, there are a lot of vulnerable people. The virus is not gone, it's going to be with us for a long time. And while the burden on our healthcare systems has been reduced because of this extraordinary mobilization of the public to help flatten the curve by social distancing, as we start to open up we're still at risk of overwhelming our healthcare system in dangerous ways. So, we can't think of this as a sort of all or none where we're social distanced today and we're open tomorrow. This has to be a gradual stepwise process that is driven by data and understanding about where different communities are, what their capacities are for testing and contact tracing for healthcare and we have to be prepared that there are going to be false starts and bumps along the road. You began with an image in your remarks about roller coasters. I would say that we aren't on just a straight smooth cruise down to the finish line now. We're going to have many bumps and some motion sickness.
WW: Hopefully not a loop-to-loop, let's just hope we don't have a loop to loop left in the roller coaster.
WW: Well, Peggy, I want to thank you. We're at the bottom of the hour and, as I said, I could keep on asking you questions for some hours to come. Your perspective has been extremely helpful, enlightening, informed and at this time where everyone is asking and looking for answers it's been a real pleasure to have you with us. Thank you for your time and congratulations to your daughter on her graduation from law school and I look forward to seeing you when I'm back in D.C. next.
To everyone who joined us today, thank you for joining us. On Wednesday, another Walker Webcast. We’ll be back next week with Governor Jared Polis of Colorado. Have a great week and thanks for taking the time to join us.