The Innovative Economist
Growing up in western North Dakota, Heidi Williams never met anyone with a doctoral degree. She developed a passion for math in high school but didn’t take calculus because it wasn’t offered. Two decades later, the probing questions the Stanford University economist is asking shine new light on why medical innovation happens—and, perhaps more importantly, why it doesn’t.
Why is it that innovative scientific ideas don’t always end up reaching patients? Why are so many drugs tested to extend the lives of late-stage cancer patients for a few months, but hardly any to prevent cancer from occurring in the first place? Does putting intellectual property protections on genes lead to more medical advances or fewer?
What is so rare about Williams is that she has been able to answer those questions through her research on medical technology. In the face of a global pandemic, the questions she asks, and the answers she is unearthing around the forces behind medical innovation, are more urgent than ever.
Williams, 39, won a MacArthur Foundation “genius grant” award in 2015. Before that she was a Rhodes scholar, and she earned a Ph.D. in economics from Harvard in 2010. Peers call her a rock star in the emerging field of “the economics of innovation,” which Williams applies primarily to medical technology. She was tabbed by The Economist in 2018 as one of the eight best young economists of the decade. She was even featured in Glamour.
Now Williams’ work could help shape the nation’s patent system, not only as it relates to medicine but also to software and other areas of technology innovation.
Before she arrived at Dartmouth from Williston, North Dakota—a Great Plains city of about 14,000 people near the Montana border—Williams hardly thought of an academic career. Told during orientation that the College enrolled students from all 50 states, Williams glanced around, figured she had to be the only kid there from North Dakota, and concluded that’s how she got in. “I didn’t really understand what getting a Ph.D. was, and I definitely didn’t think of myself as somebody who was obviously qualified to go get one,” Williams says in a voice that still carries the inflection of her Great Plains childhood.
Williams started her freshman year with the most basic calculus course offered. Her senior thesis explored a problem related to elliptic curves, and she graduated with honors in math. One key to her mathematical leap, Williams says, was that she never felt prejudged even though she came from a small public high school in a rural state. “It was like, ‘Well, why don’t you go meet the math graduate students and why don’t you go spend time with them?’ ” she says.
In her doctoral thesis Williams revealed that by licensing newly sequenced human genes as intellectual property, the private biotech company Celera actually decreased medical innovation, compared with the publicly financed Human Genome Project, which immediately shared its gene sequencing discoveries in the public domain. Williams’ data was republished in 2013 by the Journal of Political Economy.
For another paper, published in 2015, Williams researched why so many more cancer drugs are approved to treat late stages of disease compared with the relatively few drugs approved to treat more survivable early stages of cancer or to prevent cancer altogether. Williams wanted to know if drug companies have greater economic incentives to invest in late-stage treatment research, even if these drugs tend to extend patients’ lives by only a few months. Her answer: They do.
Williams noted that in the five years preceding that paper, all eight lung cancer drugs approved by the U.S. Food and Drug Administration (FDA) treated only late-stage patients. In contrast, Williams noted, no drug had ever been approved to prevent lung cancer and at that time only six drugs had ever been approved to prevent any type of cancer.
Williams catalogued data on clinical trials as a measure of where firms were investing in their efforts to develop new drugs, and found that the lung cancer example holds much more broadly: Across all cancers, nearly twice as many cancer clinical trials offer enrollment to metastatic cancer patients relative to patients with localized cancer. Part of the issue, Williams surmised, was that because FDA-required clinical trials tend to be longer for early-stage or preventive cancer treatments, the patent-provided exclusivity period for those drugs is significantly shorter. That gives drug companies an incentive to favor research on late-stage cancer treatments, she concluded, over early-stage or preventive therapies that could save countless more lives.
That cancer drug study is one that Williams says she is most proud of, in part because doubt gnawed at her about the durability of its conclusions before the paper was published. The project required her to stitch together many piecemeal sources of evidence. Even though she had thought hard for a long time about the best ways to collect data to answer that question, she agonized about whether the puzzle fit together well enough to support a convincing scientific argument.
It turned out she needn’t have worried.
“In retrospect, that was the paper that was featured in the [MacArthur] fellowship announcement,” she says. “That was the paper that I got the most compliments on when I presented it. Students were coming up and saying to me, ‘Seeing that paper and reading that paper inspired me to want to go study economics.’ I just find it so interesting that we hold these standards for ourselves, like, have I learned enough that this is something I can communicate to others? I felt very close to the margin there.”
The value of Williams’ research on the interplay of innovation and intellectual property was recently affirmed by arguably the nation’s most prominent elected official on intellectual property issues. Sen. Thom Tillis (R-N.C.), who chairs the U.S. Senate Judiciary Committee’s intellectual property subcommittee, in August urged the director of the U.S. Patent and Trademark Office to adopt two significant reforms proposed by Williams and Stanford law professor Lisa Larrimore Ouellette, including a series of steps to make the ownership of patents more transparent.
“As we deal with the global coronavirus pandemic, the importance of investing in innovation is all the more apparent,” Tillis wrote Andrei Iancu, director of the patent office, in an August 10 letter. Tillis was “very encouraged” about the promise of the patent proposals by Ouellette and Williams that would enhance the patent system and optimize incentives for innovators and inventors.
President George Washington signed the bill creating the U.S. patent system in the spring of 1790, just a few months after he took the oath of office. The first American patent was awarded to Samuel Hopkins of Philadelphia for an improvement in “the making of Pot ash and Pearl ash by a new Apparatus and Process.”
A patent, like other forms of intellectual property such as copyright, is essentially a monopoly awarded by the government. But the larger goal is to incentivize inventors and creators for the value of their technological innovation or creative work. The innovations being patented today in gene therapy and artificial intelligence are somewhat more complex than the making of pot ash and pearl ash. There is an element of Wild West lawlessness mixed with robber baron excesses in the current patent landscape, where so-called “patent trolls” clog the federal courts with lawsuits that demand huge license fees for technologies that underlie transformative innovations from smartphones to new drugs.
Better transparency in patent ownership is important because patent assertion entities—the less polarizing name for patent trolls—often create multiple shell companies to obscure who is behind a lawsuit. They are one element of what is called the “patent thicket,” the idea that the tangle of intellectual property complications becomes so impenetrable that it prevents companies from bringing innovations to market.
This is why the research Williams is doing is crucial. Relatively little is known about whether stronger patent laws affect investments in technology research. Through her work on medical technology, Williams is at the forefront of discovering new data sets that better illuminate the interplay between intellectual property protections and innovation. “Part of what makes Heidi’s work so special is the way she works with lawyers and innovators to make sure she understands the practical details of the areas she studies,” says Ouellette. “In addition to doing cutting-edge research herself, Heidi is helping define innovation economics as a field, including by mentoring the next generation of scholars in this area.”
From her days in North Dakota Williams remembers being compelled to investigate questions. Once, during high school, she wanted to know whether the government’s then-new GPS system would provide more accurate location data than a private alternative. She got her father to ferry her around in a golf cart on a local course so she could triangulate measurements. “My dad probably knew this was not a meaningful thing that I was going to shed a lot of light on. But, you know, we just had a lot of fun,” Williams says, smiling at the memory. “My parents were always very supportive of, ‘You seem like you’re learning something and you seem like you’re excited about what you’re learning, and that’s kind of the most important thing.’ That’s definitely something that I feel very strongly about for my students now.”
The questing never stopped. It was cryptography, Williams says, that got her interested in math as an outlet to find answers to the questions that kept popping into her head. She didn’t have access to a university or laboratory, but math, she discovered, didn’t require the type of scientific gear other disciplines did.
Brian Winkel, a mathematician, first got to know Williams when, as a high school student, she submitted a paper to his cryptography journal that qualified as significant academic research. “You’ve got to know that there’s this engine inside that drives her,” he says.
Williams’ paper showed how modern cryptography techniques could be used to break the code of Germany’s World War II Enigma machine. Williams won both prizes that Winkel’s journal offered that year. Winkel, then a professor at the U.S. Military Academy at West Point, says a high school student submitting a paper of that pedagogical caliber was unheard of 20 years ago. It prompted Winkel to connect Williams, then undecided about where to attend college, with a highly respected peer: Dartmouth math professor Dorothy Wallace.
“With Heidi, you knew there was this engine, but there was also this graciousness—this grace—she had,” says Winkel, who remains close to her. “And I thought,” he adds, if Williams could gain some of Wallace’s energy, force of personality, and aggressiveness, “that would be good for her.”
The Wallace connection helped lead Williams to Hanover, and the pair worked closely together. “Heidi is a born curious researcher, near as I can tell, apart from any specific research question,” Wallace says, noting that she still keeps the 2015 email she got from Winkel after Williams won the MacArthur: “Lose a math major, win a Rhodes scholar and MacArthur fellow—reasonable swap!”
Williams, who teaches both graduate and undergraduate economics at Stanford, says teaching is a central element of her academic life. She and Ouellette are designing a new course that will straddle law and economics, probing why important scientific innovations in the biomedical field don’t always reach the patients who need them. “You can find lots of examples where it’s just like everything—everything!—was working,” Williams says, “except the patent was expiring in a year, so nobody wants to give you any financing, so the project goes nowhere.”
The goal is to bring innovators to Stanford who have experienced that plight and who might have ideas on how to develop better public policy. It’s not an area that conforms to the traditional corridors of any one academic discipline, and it may not have come about without the pandemic. “Covid was actually kind of the kick we needed,” Williams says. “It was like, okay, it seems medical innovation is now sufficiently important. We don’t need to feel bad about focusing on that.”
One of the most disarming things about Williams is how transparent she is about her self-doubts, despite her extraordinary accomplishments. Even in her quiet voice, words spill out in a gush of ideas that show the force of her intellect and her passion to make the world better. Williams won the MacArthur genius award while she was at the Massachusetts Institute of Technology. She and her husband, Daniel Fetter—an economic historian at Stanford—had their first of two sons three months earlier. Wiliams felt that she was failing miserably at balancing the demands of parenthood and a young academic career. “I remember feeling like, for sure I’m gonna get fired,” she says. “Every day was harder than the one before.”
Then, one harried afternoon when she had just returned to her office after nursing her infant son at daycare, the phone rang. The MacArthur Foundation was on the line. Oh really? Williams did not know she had been nominated and initially thought it was an elaborate prank. MacArthur fellows receive a no-strings-attached stipend of $625,000 for their “exceptional creativity.”
Five years later, Williams still gets emotional talking about the many people who helped her win the MacArthur, from her optometrist father and social worker mother who always supported her relentless quest for answers to later mentors including Winkel, Wallace, and MIT professor and 2018 MacArthur fellow Amy Finkelstein. “You think, this isn’t my work,” Williams says. “It’s kind of the sum total of these 25 people who made the decision to give me an opportunity at that time or who gave me an ear, listened to me, or gave me support and advice.”
Williams has long felt self-conscious that she has produced fewer research papers than some academics. Maybe the most important thing the MacArthur genius award provided, she says, was the confidence to continue walking what she calls the “question-driven path.”
“When you are doing research it’s pretty easy to write papers if the goal is to write papers. It’s harder to write papers if your goal is to answer questions, because you might not come up with the right data to answer that question,” she says. The fellowship allows her “to keep doing things that might not work out around the questions that you think are the most important and to continue down that path. That’s what I’m happiest doing, and it’s what I feel is the most productive, but it is kind of high-risk.”
Mike Swift, a former John S. Knight fellow at Stanford, is chief global digital risk correspondent for MLex Market Insight.