David Rosenthal: evaluation

Transcript context

…Yup. The patents aren't just on the molecules, they also patent delivery mechanisms, so they keep changing delivery mechanisms. You basically have this scenario where doctors don't really want to prescribe the old thing. When you introduce a new novel form of a pen, oftentimes doctors will say, well, that's the thing we need to be prescribing now. There's a brand that gets built around the most current thing that's patented, even if it's not that much better than the old thing. There's a lot of people in pharma that are going to get mad at me for that characterization. But in addition to patenting molecules, delivery mechanisms also provide defensibility. One question I had was, there might be contractual things that entrench relationships too. When you get really big, and this would be a scale economy, are there contractual relationships with formularies that entrench you and make it so that even if someone else comes out with something similar to treat any given condition, and your patent isn't defending you because it's a different molecule, well, sorry, you've locked up a distribution channel with the PBM and getting on the formulary in such a way that like, good luck to anyone else. Yup. I think that falls into scale economies, which for sure also apply here. I think really on three sides on the R&D and research side, because that is incredibly capital intensive. $2.3 billion dollars a drug.…

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