EP278: Will COVID-19 Result in a New Normal for Value-based Pharmaceutical Pricing? With Maura Calsyn From the Center for American Progress

In this Episode 278, Stacey Richter talks with Maura Calsyn, managing director of health policy at the Center for American Progress, about whether COVID-19 will result in a new normal for value-based pharmaceutical pricing.

WHAT YOU'LL LEARN

✅ Why lowering a drug's price can sometimes backfire when physicians are paid a percentage of that price to administer it

✅ How the "Netflix Model" and "Australian Model" of drug payment differ from true value-based pricing

✅ Why a transparent, replicable process matters more than any single pricing formula

✅ How cost shifting complicates efforts to make drug pricing reflect actual clinical value

✅ Why there needs to be a way to keep funding drug development even as pricing models change

WHY THIS MATTERS

Maura Calsyn unpacks why value-based pharmaceutical pricing is harder to pin down than it sounds — some of the tools marketed as "value-based" are really just proxies that don't fully capture value, and pricing based on what the market will bear has historically meant setting prices as high as possible rather than as accessible as possible. With COVID-19 exposing just how much financial pain the system can absorb before something breaks, Calsyn argues this may be the moment value-based pricing models like the Netflix or Australian approaches get real traction, provided any new framework preserves the incentive to keep developing new drugs in the first place.

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

🔗 Healthcare Industry Acronyms and Terms

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00:00 Introduction.

03:48 The value of pharmaceutical products.

06:58 "We're dealing with what might seem like an infinite amount of resources, but it's really not."

07:03 The "Netflix" or "Australian" payment models vs value-based pricing.

09:35 "You need a transparent and really replicable process."

10:41 Considerations of equity and affordability.

11:10 "Everybody wants people to get the drugs that they need … I think the question really is just, 'Who is paying for it?'"

11:44 What value-based pricing really means in the pharma industry.

13:22 "We're confusing what is actually a value-based price with some of the tools that are used to try to get closer to that."

14:03 Why extracting prices by future impact holds implications for the health industry on the whole.

15:44 "Value-based pricing is a tool to be able to lower health care prices across the board."

16:15 The problem with shifting costs.

17:20 Generic pricing and the patent system.

18:30 Leveraging fear.

20:40 "There's the ability for extraordinary amounts of money to be made here in a way that really does not advance the health of the country."

21:33 Next steps for value-based pricing in Pharma.

23:08 "How are you going to justify those prices?"

23:28 "If you keep pressing and pressing and pressing, there's going to become a breaking point."

24:42 "We need to preserve a way to make sure that those products are developed."

26:26 "Are there other ways that we need to finance and bring to market drugs?"

27:43 The call to action for value-based pricing in Pharma.