Analysts refer to the looming expirations, due around 2011 and 2012, as the "patent cliff." That changes the entire nature of investing in pharmaceuticals.
"It's going to be a stock-picker's game," Arnold told CNBC. "It's not going to be a sector bet."
So what looks good right now?
There's Schering-Plough, which is due to present new research data for its popular cholesterol drug Vytorin over the weekend.
"Schering-Plough is at a gift level right now," she said. "Long-term, this is a name you want to own, and in a year from now, investors are going to be thinking about where they want to be positioned around the patent cliff. Schering doesn't have a patent cliff until 2014."
Then there's Schering-Plough's partner in the development and marketing of Vytorin, Merck.
"I think Merck is more interesting, not quite at the gift level, but certainly has a chance to repair its valuation on the back of recovery of the Vytorin situation," she said.
Watch the entire interview (4 mins, 2 secs)
And in addition to Schering-Plough which companies are best positioned along the patent cliff?
"We think Wyeth and Lilly are actually better positioned on the cliff than the market generally appreciates at this point," Arnold said.
Arnold does not personally own shares of Wyeth, Lilly, Schering-Plough or Merck; but the companies are investment banking clients of Credit Suisse, which has also received compensation from the companies for services other than investment banking.