Futch: Orphan drugs preserve pricing power because rare disease costs are negligible to insurers
Clark Futch · Clarke Futch – Healthcare Royalty Partners (First Meeting, EP.20) · Jun 1, 2020 · at 37:46
Clarke Futch of Healthcare Royalty Partners explains how small patient populations insulate orphan drug pricing from payer reimbursement pushback.
0:00 / 0:19exact quote · 19.8s
720p mp4 · rendered on demand · StarZero watermark
“The drugs are very expensive, but it's a very small line item on any insurance plan as opposed to cholesterol or diabetes or things that affect millions and millions of patients. So your pricing power there is better and therefore makes it more attractive and predictable for us.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Clark Futch
Futch: Healthcare royalty diligence eliminates binary risks to focus on commercial risk
“Those three risks, the patents, manufacturing, and regulatory, are really what we view as potential binary risk. So if the product For safety reasons, gets pulled from the market because it's, have some significant side effect. That's a problem for us because …”
Futch says medical device patents can be circumvented, unlike chemical entities
“And device, typically, you can engineer around the patent, you can do it a different way. If you have a patent on the chemical entity, there's really no way to get around that.”
Futch argues dominant commercial marketing can make mediocre pharmaceutical products successful
“And you can also have a product that's maybe okay, maybe not great, maybe it's not high science, but if you have a marketing company that dominates a certain area, they can do very well with those products. We've seen that in the dermatology area, for example.”
Futch: HCR avoids board seats and management changes
“We don't sit on boards. Typically we don't change out management. On a very rare occasion, we've had to step in and be involved, but not very often. It's not what we're set up to do. We're not a loan to own type of investor.”