From the NHS to Early-Stage Pharma Startup

A conversation with Dr. Ross Breckenridge, on the shift from 20 years at the UK's National Health Service to CEO of an early-stage pharma startup.
Kirkpatrick: Dr. Ross Breckenridge is a doctor, he’s a medical researcher who’s focused a lot on cardiology. He’s practiced as a doctor in the UK National Health Service, and rose up to a senior level there running a major hospital in London until last year. He’s also had a foot in the door of entrepreneurialism and healthcare investment for a long time.
Through a chain of events that’s probably not worth going into here, but quite unexpected even to him, I think, he’s now found himself the CEO of Silver Creek Pharmaceuticals, a San Francisco-based, extremely innovative drug development company. What we’re going to talk about here is any of that, but especially what to think about this whole idea of a National Healthcare System versus the US system. Especially at this weird moment of transition, which may or may not be relevant. Maybe I should start by asking you, Ross, “At the macro level, what have you learned about what works in healthcare?”
Breckenridge: Thanks. Yes, that’s a really interesting question. What I’ve learned is how dysfunctional healthcare systems are on both sides of the Atlantic for opposite reasons, and we can talk about that later on. What works, though, is something that Rachel alluded to, empowering patients. What that means is the role of the doctor has really changed in the last 20 years. The patient sees the same stuff that we do, right? The patient can go onto PubMed and look at the clinical trial publications before they go and see the doctor. Part of the job of the doctor is now curating the information that the patient can access on the Internet. A lot of the stuff that patients can access is just either written by mad people or people trying to sell them stuff. It’s almost a fiduciary relationship that we have. I think that this goes quite a long way along the way of thinking what medicine is going to be like in 20 years’ time. The doctor as being a patrician, sapiential authority figure—
Kirkpatrick: What’s the word?
Breckenridge: Sapiential authority—
Kirkpatrick: What the hell does that mean?
Breckenridge: Well, it’s not my word, I’m just parroting what I heard earlier on.
[LAUGHTER]
Breckenridge: The first time I heard it was this morning.
Kirkpatrick: What’s that word again? I’m sorry.
Audience: Sapiential: Knowledge based, or wisdom based.
Kirkpatrick: Nice word. Sorry, I did step out briefly during—
Breckenridge: Yes, it would be nice to claim that for myself, but anyway. That’s changed actually and patients can become a lot more empowered. Of course, a lot of patients aren’t empowered. The elderly, and the people who don’t want to access stuff, they just want to be cured. They have that. Part of the challenge we have now is that the patient-base is very fragmented, even in a place like the UK. It’s very interesting coming here, where a word like Socialism is used as an insult.
In the UK we have this healthcare system that was, at its time a world-leading event. Taking a whole bunch of quite poor health standard people in the UK, after the Second World War, and providing them free healthcare, free at the point of delivery. That was quite revolutionary. Patients in the UK are absolutely wedded to this model. To the extent now that seventy years later, we have the vestiges of a 1940s healthcare system, which is frankly dysfunctional. It’s almost impossible, rationally, for the government to make changes to it. So just as we were hearing that there need to be changes to the way healthcare systems here are delivered to save money, we need to have the same sort of discussions in the UK from the other point of view. We need to do it to enable us to put money into the system in a way that will actually impact healthcare.
Kirkpatrick: What’s most wrong with the system over there?
Breckenridge: Well, the population that it was designed to treat in the 1940s essentially worked up until the age that they retired and then died 18 months later, conveniently.
Kirkpatrick: Prior to its existence, you’re saying?
Breckenridge: No, at the time. That’s what it was designed for. Now we have people, perfectly healthy 90-year-olds that happen to get ill, and when you’re a 90-year-old and you get ill, you suddenly become a 90-year-old, not a well person. That means that you have to have a highly integrated system, not only to do the front-door stuff. You have to have an assistant to look after people, to go to homes, to check that they’re well. We don’t have that sort of infrastructure that works really well. We have hospitals that are clogged up now with patients that should be going home, but they can’t, because there’s nobody at home that can look after them.
Kirkpatrick: And the system has never contemplated creating that ecosystem?
Breckenridge: It hasn’t. Because, serious reform of healthcare is an electoral third-rail in the UK. Parties have been quite disingenuous. Our two dysfunctional political parties that flip in and out of power, where the party that is out of power will accuse the party that is in power that are trying to do something about health as destroying our National Health Service. Then, the roles reverse when they come in to power. Frankly, it’s dishonest.
Kirkpatrick: Because they’re appealing to the desire of everyone to just keep it as it is, because that’s the way it should be.
Breckenridge: Absolutely. The really interesting thing is if you ask people whether their health system is the best in the world, every different nationality thinks their health system is the best in the world. We’re trained from a very early age to have this idea that the way we have healthcare delivered, is the only way it can be delivered.
Kirkpatrick: And yet, at the macro level, aren’t outcomes generally still better over there than here?
Breckenridge: They are. That’s probably because of coverage. There’s 100 percent coverage everybody has access to it. The NHS is actually very good if you’re about to die. If you’re about to perish, we’re actually pretty good for that. If you have something ‘boring’ in inverted commas and long-term, like osteoarthritis in your hips, or complicated diabetes, or mental illness, or dementia, we kind of fall down. But, I’m guessing that the system here, unless you’re very well insured, falls down quite quickly there too. What we have is a discord between the sick-medicine—I think that was the phrase that you used, was it? That’s a really good way of looking at it—and all of the other stuff. We haven’t even thought of all the other stuff, really, in a serious way.
Kirkpatrick: I do want you to talk about Silver Creek. But, before we get to that, what are your observations about what we have, and how it compares?
Breckenridge: Well, the one obvious observation is for the first time, I’ve actually had to write a check for healthcare. I’ve never had to do that before. That’s a big deal in the UK, that everything gets taken out of general taxation. That has a good effect, in that we don’t have medical bankruptcy. People aren’t afraid to get ill. On the other side of the coin, people think that healthcare is free. People don’t attach a monetary value to the sort of services that they require. There have been various ideas mooted about, for example, putting the cost of a drug on the drug packet, to tell people, “Look, the NHS has bought this for you, and this drug costs 5000 pounds a month.” But it was thought that would probably be a bad idea, because we would find that a lot of elderly people who would say, “Well, I’m going to save the NHS money by not taking my drugs, and sending it back,” which is clearly the opposite of what they should do. It is very interesting changing systems, sort of hacking my way through the thicket of American bureaucracy has been a really interesting experience. Just the otherness of a different healthcare system, makes you realize how trained we are to accept the healthcare system that we grew up with.
Kirkpatrick: Forgive me for bringing this up, I hope it’s okay. You have a disabled child.
Breckenridge: Yes.
Kirkpatrick: And you have some enthusiasm about bringing her into this system, as opposed to that one. Explain why.
Breckenridge: Well, it’s the funding of the system. In the UK, special needs education is very much underfunded; whereas in a rich area, like the bay area, it’s needs-based rather than resource-based, what will happen. It’s kind of an experiment to see how Jen, my daughter, copes with a new system. In the UK, we have special needs schools, everybody goes to a special needs school and gets looked after. Here, it’s a lot more inclusive. She will be in a mainstream school with a carer, we’re guessing, and hoping, in a class full of able-bodied kids. It’s a sort of thing when you have a kid like this you can’t tell what’s going to happen until you do it.
Kirkpatrick: Another point you made on the phone is that there’s not really a hard and fast distinction between the medical system and the educational system that we think of. Quickly talk about that, because we’re not loaded with time, but I want you to quickly address how we think about it here.
Breckenridge: In terms of special needs kids?
Kirkpatrick: Yes.
Breckenridge: In the UK, it very much is the idea of you have these schools where they learn as many life skills as they can accrue, and then you have medicine if something goes wrong. Whereas, if you’re designing something from scratch, as we’ve heard before is a nice idea, to be able to design from scratch, you would have something a bit more integrated. Because all of Jen’s friends through the years, they all have very checkered medical pasts, and there’s a doctor you see who recognizes the syndromes that they have, and the horrible operations they’ve had. That’s not really integrated in the day-to-day care of what they have. Whereas, it does kind of define them in some way.
Kirkpatrick: I would assume from what you’re saying that what hasn’t happened in the UK, that has happened here, is this extraordinarily powerful disability rights movement. It really has altered our laws nationwide, and has provided things by legal requirement for all kinds of things. Now, that is not as big of a deal over there.
Breckenridge: It’s not. One of the many disappointments from the last conservative government for parents like me, was that David Cameron had a son who had severe disabilities. We thought, “Finally, a politician who understands.” But, it turned out that wasn’t—
Kirkpatrick: And of course, the thing I’m mentioning is the thing that’s about to be dismantled. Let’s talk about the company, what it does, and why it’s doing it. Because it’s a great example of where technology can take healthcare.
Breckenridge: At the moment, one of the new things that I’m experiencing is raising money, raising capital. The sort of bruising experience of going to bankers and asking them for their hard-earned—well I was going to say, but I guess we can agree to disagree—

[LAUGHTER]

I’ve had lots of interesting conversations through various time zones with people saying, “Oh, you’ve just left here, and you’ve left because it’s an easy move, and you’ve come to the sun, and left a dysfunctional system. Why should I invest in it?” Actually, the opposite is true. I had a very comfortable life in London. I had a permanent job. I was trying to think of different ways that I could’ve gotten sacked from my job, and there aren’t very many. I had a pension, kids in school, etcetera. So actually, quite a lot of activation energy was needed to come here. One of the main reasons to come here was the technology of Silver Creek. I joined the board about a year ago, and was able to look under the hood. My thought was that the company at the time was significantly underselling what it had, and hadn’t really recognized the potential of what we could do. The core technology is: Taking growth factors, secreted molecules in the system, which act as cell survival signals. I mean, these have been known for many years. They’re implicated in lots of diseases, like stroke, and myocardial infarction. They’re very difficult to use as drugs, because they don’t just hit sick tissue, they hit every tissue. Some of the effects they have are actually extremely unhelpful.
Kirkpatrick: If you let them loose in the body?
Breckenridge: Yes, like drugs. You can’t tell drugs to go to a specific place, it will soak through every bit. The other thing is, it has a very short half-life, so the body gets rid of these signals really quickly. The technology at Silver Creek is to—
Kirkpatrick: So you said that growth factors impact is very well understood?
Breckenridge: Absolutely, it’s a differentiation from stem cells. So stem cells may or may not turn out to be a way of helping an organ to regenerate. I happen to be a cynic, because I’ve seen lots of stem cell trials that frankly I didn’t believe in, and I think that’s an important thing. To take a step back, as a physician, before we let a drug come to our patient, there has to be an intellectual barrier that is jumped over before that happens. There has to be clinical trial evidence, that will convince cynical people to allow their patient to be exposed to a potentially noxious drug. So, for me, stem cells hasn’t made that proof yet, it may well do, it’s a relatively young field. Growth factors, on the other hand, have been known about for many years. One of the attractions of this company is that the sharp end of it is actually quite boring. We’re not a unicorn farm, collecting unicorn manure to fertilize the crops. What we’re doing is taking something boring and weaponizing it. We’re making it into a drug that will be tissue-specific, by modifying the protein, attaching it to an addressing molecule, and allowing it to survive in the circulation for long enough to actually be used as a single injection rather than an infusion. We’re going through the process now of figuring out what these molecules can be used for, and looking at various disease molecules, disease models.
Another one of the attractions of my job is: I get to choose the diseases that we go for, and that’s great. The sorts of things that I’ve spent years apologizing to patients for, that we don’t have the drug for, I can now try and do something about. That’s a huge attraction. A big part of medicine, if you are honest to a patient, is saying “We don’t have that particular drug, that doesn’t exist yet.” As you accumulate more years in medicine, you accumulate these difficult conversations with people, and you meet them again and again in your clinic as they gradually circulate downwards towards their inevitable death, looking at each other, you and the patient, without being able to do anything. The idea of coming here and trying to do something positive about that, is actually incredibly powerful.
Kirkpatrick: The drugs you’re working on are the kinds of things that can lead to an awful lot of optimism about what we’re going to be able to do down the road, if we can make the context work better. Let’s go back to the context, and then we’re going to have to wrap. Policy-oriented thinking and reason, is not something you have a lot of confidence as a driving force for change in either system. Talk about that. What do you think is the likelihood that the UK or the US are going to get to a place that they need to go and what is likely to drive them there?
Breckenridge: The pessimist in me, which is gradually being washed away by sunny Californian optimism, makes me think that the UK NHS will only seriously reform when there’s some sort of disaster. We’re teetering on the brink of this every Christmas. We’re only one flu epidemic away from the hospitals not being able to work at all. I think there will need to be, unfortunately, some serious failure of the system that makes all the political parties step back and say, “Okay, let’s have some sort of rational and non-party political discussion about how we organize healthcare. It seems that the amount of money we spend on healthcare, which is about 50 percent of what you spend in this country, is probably going to go down in the UK. We made our questionable political decision earlier this year, which means that we’re not going to have as much money to spend on anything, including healthcare. The future for British healthcare is not rosy—
Kirkpatrick: Because of “Brexit”, you mean?
Breckenridge: Yes. British people used to be slightly cool. Now we’re people that make really bad electoral decisions, but you guys are too, right?
Kirkpatrick: We wanted to give you some company.
Breckenridge: In America, the problem is slightly different. As we’ve heard, the amount of money that’s wasted in the system, but more importantly, the amount of money that’s taken out of the system as profit, is huge. This is one of the things that makes people angry in the red states, is how much money they spend on healthcare. People like Martin Shkreli, who don’t help at all, that’s a really unhelpful thing for the biotech industry, whose job is to compete for capital. The reason we can compete for capital is the hope that innovative drugs will still be reimbursed at a rate that will make risk-adjusted capital come to us, rather than to tech. I think the overall financial cost to the individual in this country probably has to decrease in a sustainable way, somehow.
Obviously, in this country, there are lots of things that are overpaid for. Drug costs here are overpaid for, that’s a whole separate discussion of how we in the UK limit the amount that we pay for medicines whereas Medicare can’t. It seems slightly insane, but it’s the way that goes. Having said that, the proportion of healthcare costs in the US that are spent on drugs is actually lower than the UK, because everything else is so expensive. That’s why things like technology—
Kirkpatrick: We still spend two times, on a per capita basis.
Breckenridge: Absolutely. I think the stuff that we’re hearing today is fantastic, because it really allows us to think about a more integrated, sane, efficient healthcare system. But we need to bring the patients with us. The question that you asked, that I was going to ask, is that a the end of the day, you need patients to come with you. And patients have a fixed view of what a healthcare system and a doctor should be. We did a clinical trial, actually, in our hospital, of getting doctors to wear different clothes to see whether it made a difference to patients. You had somebody wearing a shirt and tie, somebody wearing what a Silicon Valley guy would wear, and somebody wearing even more casual clothes. We found that even if they were giving the same information to patients, if you’re smarter the patients will listen to you more. It’s very interesting.
Kirkpatrick: Regardless of what you’re wearing?
Breckenridge: No, regardless of what you’re saying. It’s what you’re wearing, is what they’ve said. They’ve got fixed ideas—
Kirkpatrick: So which do they prefer?
Breckenridge: Smarter.
Kirkpatrick: Oh, you mean fancier. You’re using a Briticism. I thought you meant smart.
Breckenridge: Sorry, my Americanisms are improving.
Kirkpatrick: You mean, when they wear a suit, they get more credibility.
Breckenridge: Yes. That’s sort of a trivial example, but I think that if you suddenly say to a patient, “Your healthcare is now going to be delivered digitally,” patients are going to be fairly unhappy. There’s a fair amount of education of patients that we all need to do, to adapt them to the different healthcare environment that they’re going to be in. Doctors would be quite happy to do that, I’m sure. I think that’s probably something that needs to be thought of.
Kirkpatrick: Thank you for joining us, and relatively last minute, but I thought we needed this global view or at least transatlantic view. I think it’s interesting to think about what kind of healthcare system may be politically acceptable in the US coming forward. I don’t think we have a clue right now.
Breckenridge: Donald Trump, to finish up, he said in the past that he really admires the NHS, and he was very careful to say that he was going to replace Obamacare with something awesome, and great, and awesome. He was very careful to not say what it was, so it may be more relevant than you think.
Kirkpatrick: It may be. Thank you very much.

[APPLAUSE]

Transcription by RA Fisher Ink