Episode 494

Six Tensions of Pharmaceutical Drug Pricing, With Sarah Emond of ICER

Dec 4, 2025

39:59

Episode Description

If a drug keeps a patient out of the hospital — and hospital spend is 50% of most plan sponsors' total costs — why do we design benefits that make patients less able to afford that drug? That's the martini-fueled question Stacey Richter started with, and it threads through this entire conversation about why pharmaceutical pricing in America is so persistently broken.

In this episode, Stacey Richter speaks with Sarah Emond, CEO of ICER (the Institute for Clinical and Economic Review), the only financially independent nonprofit in the US conducting rigorous health technology assessment, about the six core tensions that prevent drug prices from reflecting drug value — and what it would actually take to fix that.

WHAT YOU'LL LEARN
✅ Why list prices are, in Sarah Emond's words, a lie — and how the rebate system creates a dynamic where formulary placement is driven by discount size rather than clinical value, leaving patients on the wrong drug for the wrong reason

✅ How coinsurance based on list price rather than net price means a patient can face unaffordable cost sharing even after their payer negotiated a steep discount — and why that directly undermines adherence to high-value medications

✅ Why GLP-1s like Wegovy and Zepbound are wildly cost effective by ICER's analysis — meaning society is paying a reasonable amount per unit of health gain over a patient lifetime — but still threaten to bankrupt plans due to the sheer size of the eligible population

✅ How 70 to 75% of ICER drug reviews find that pharma has overreached on price, and why a decade of tolerating that overreach has left purchasers with sticker shock that causes them to block access even to fairly priced cell and gene therapies

✅ Why value-based pricing would eliminate the logic for most prior authorization and most cost sharing — and what Dupixent's launch for atopic dermatitis and Eisai's Leqembi for Alzheimer's Disease show about what it looks like when manufacturers actually price within the ICER range

✅ Why siloed pharmacy and medical data make it nearly impossible for self-insured employers to see whether a drug reduced hospitalizations — and how that analytic gap makes draconian cost containment look rational even when it isn't

WHY THIS MATTERS
The mother of all tensions here, as Stacey frames it, is that without value-based pricing there is almost no mechanism connecting net drug price to patient affordability and access. ICER's framework — measuring how much better patients feel and how much longer they live, then comparing that to what the drug costs including net downstream savings — exists to fill that gap. But without more unconflicted entities doing this work, and without pharma and PBMs willing to use it, plan sponsors are left managing drug spend with blunt instruments that shift costs onto the sickest patients.

=== LINKS ===
🔗 Show Notes with all mentioned links:
https://cc-lnk.com/EP494

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter:
https://relentlesshealthvalue.com/join-the-relentless-tribe

🫙 Support the podcast with a small donation to the Tip Jar:
https://relentlesshealthvalue.com/join-the-relentless-tribe

🎤 Listen on Apple Podcasts https://podcasts.apple.com/us/podcast/feed/id892082003?ls=1

🎤 Listen on Spotify https://open.spotify.com/show/6UjgzI7bScDrWvZEk2f46b

📺 Subscribe to our YouTube channel https://www.youtube.com/@RelentlessHealthValue

=== CONNECT WITH THE RHV TEAM ===
✭ LinkedIn https://www.linkedin.com/company/relentless-health-value/
✭ Threads https://www.threads.net/@relentlesshealthvalue/
✭ Bluesky https://bsky.app/profile/relentleshealth.bsky.social
✭ X https://twitter.com/relentleshealth/

08:18 Why list prices are a lie.

10:59 How does the rebate model sometimes get in the way of paying for value?

12:50 Bonus clip with Sarah Emond.

13:14 EP491 with Elizabeth Mitchell.

13:20 EP490 and EP492 with Shane Cerone and Sam Flanders, MD.