Healthcare Price Arbitrage

Calley discusses the massive price arbitrage opportunity in healthcare, specifically highlighting how the same medications cost drastically different amounts in the US versus Europe. The core opportunity stems from dysfunctional pricing policies that create a 15x price differential between markets.

Key Points:

• Price Arbitrage Example - Ozempic:

  • Costs $1,800/month in US
  • Same drug is 15x cheaper in Europe and its home country
  • Paid for by US taxpayers through Medicare/Medicaid

• Market Size:

  • Target market is 80% of US adult population
  • Potential annual market size of $2-3 trillion
  • Long-term usage creates recurring revenue stream of 20-30 years per patient

• Systemic Issues Creating Opportunity:

  • Rigged policies create artificial price inflation in US
  • Government funding locked in through Medicare/Medicaid
  • Individual rebates offered while maintaining high system-wide prices

• Market Dynamics:

  • Most profitable market is US, not Europe
  • Company (Novo Nordisk) became 12th most valuable globally
  • Majority of profit expectations come from US market, not home continent

The opportunity lies in the massive, government-supported price differential between identical medications in different markets, suggesting potential for arbitrage or market correction.