David Rosenthal: belief

Transcript context

…All right. We're drifting into value creation, value capture here, because we're making societal judgments around, are the economics worth it? Do you want to formally enter that section of the show? Let's do it. Maybe to start, on this segment of the show we talk about for a given company, how much value do they create in the world versus how much they capture? Let's start narrowly with Novo Nordisk itself. What do we think? Value creation versus value capture. Undeniable that over the hundred plus year history of this company, the company, it has created incredible value for diabetics and now for a much broader population than just diabetics. The creation amount is large. It is also undeniable that it is a half trillion dollar market cap company on $30-$40 billion of highly, highly profitable revenue that they have also captured a lot of value. A lot of people talk about, does the pharma sector over earn? This is the way people talk about this. On other episodes that we've done, there's far less of a value judgment. We're like, yeah, companies should go be as profitable as they can be. My God, Visa makes so much money. That's a little bit tongue in cheek. In healthcare, it's different because there's an expectation. You start from a place of public good. When healthcare companies earn too much money, you look at it and you're like, ooh, I don't know if I like that, which is so interesting. It's a very different starting place than I think a lot of people tend to look at businesses. One thing that is true is that these businesses require a tremendous amount of investment. Just merely looking at their margins is stupid. I alluded to that earlier, but of course they have high gross margins. For the things that they actually end up selling rather than killing, they should.…

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