At the Barclays Global Healthcare Conference 2014 last month, Christopher Anzalone, president and CEO of Arrowhead Research (NASDAQ:ARWR) put up a slide suggesting that its hepatitis B drug would treat a $1 trillion market "even under conservative pricing assumptions."

But as Fool contributor Brian Orelli and health care bureau chief Max Macaluso discuss in the video below, those conservative pricing assumptions aren't nearly conservative enough. Pricing in China, at less than a third of the price in the U.S., would still result in over $800 billion to treat the 93 million people that are chronically infected with the virus. There's just no way the government or private payers could afford that much to cover one disease.

As a comparison, consider Gilead Sciences (NASDAQ:GILD), which offered Egypt a 99% discount for its hepatitis C drug Sovaldi. That's about where Arrowhead should expect to price its hepatitis B drug if it gets approved.

Brian Orelli has no position in any stocks mentioned. Max Macaluso owns shares of Gilead Sciences. The Motley Fool recommends Gilead Sciences. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.