In this episode of the Vital Health Podcast, host Duane Schulthess speaks with Melanie Whittington, Managing Director and Head of the Leerink Center for Pharmacoeconomics and Senior Fellow at the Center for the Evaluation of Value and Risk in Health at Tufts Medical Center. They examine how health economic modeling can more accurately reflect real-world market dynamics, the rising pressure behind IRA and MFN drug pricing, the risks to oncology innovation, the limits of conventional cost-effectiveness frameworks, plus the role of transparency and clearer communication of long-term value in sustaining a healthy innovation ecosystem. Key Topics Market Modeling: Hypothetical models versus real-world pricing dynamics, patent cliffs. Pricing Policy: IRA, MFN, market-based pricing scrutiny, communicating why prices are &quot;worth it&quot;. Innovation Incentives: Private capital risk, oncology small molecules, policy-driven pipeline shifts. Value Framework Limits: QALY concerns, rule-versus-tool debates, GRACE, broader treatment impacts. Transparency and Outlook: Net price opacity, PBM negotiations, generics and biosimilars, the next innovation cycle. Opinions expressed are those of the speakers. The Leerink Center for Pharmacoeconomics is a division of MEDACorp. See omnystudio.com/listener for privacy information.

Melanie Whittington: Why Are Drugs So Expensive?

Vital Health Podcast

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**Podcast:** Vital Health Podcast

## Transcript

Welcome to this Vital Health Podcast. I'm Duane Schulthess, the CEO of Vital Transformation. My guest today is Melanie Whittington, Managing Director and Head of the Lyric Center for Pharmacoeconomics. She is also a Senior Fellow in the Center for the Evaluation of Value and Risk in Health at Tufts Medical Center. Mel, it's always great to see you. How are you doing? Melanie Whittington, Managing Director and Head of the Lyric Center for Pharmacoeconomics. We've always had a good conversation and I'm looking forward to our chat today. So you lead the Lyric Center for Pharmacoeconomics. One of your many roles is to develop a

cost-effective analysis, both in the development and approval of medicines. And from a societal perspective, can you explain what exactly that means, please? Yeah. So first, kind of what is the Lyric Center for Pharmacoeconomics? The Lyric Center for Pharmacoeconomics is a division of Metacorp. So Metacorp has existed for 30 years and it's kind of like a think tank intended to provide information on the strategic direction and perspective on the evolution of healthcare.

This is not new news to you, this is not new news to you, Duane. Prices and price scrutiny we're continuing to see evolve in the U.S. landscape. And so that's what the Center for Pharmacoeconomics is supposed to do. It's more of a think tank that is affiliated with Lyric Partners, but is not part of Lyric Partners.

It is to bring some health economic principles into drug development, healthcare investing, but also to bring information about the incentives for innovation. What do we need to keep getting more drugs out into the world?

So what is it that we do? This is where I think it gets kind of exciting. I use health economic modeling to talk about the impacts of innovation. You know, a lot of the conversations that are happening in drug development and even in commercialized drugs is about profits or potential profits. And that's very important. You know, this is a business that requires those things.

But the ultimate buyer of drugs that happen to get commercialized, they don't really care about profits or potential profits. They care about impacts. Their returns are not measured in profits. They're measured in, hey, if we're paying for this drug, what are we getting for our health and for cost efficiency in the health system and in society?

What we are trying to do is talk about the impacts of innovation. We're trying to broaden the application of cost effectiveness analysis and say, listen, you can use this as a storytelling tool and look at, hey, here's my potential phase three outcome.

What does this actually mean for patients, for the health system, for society? And can investors use health economic modeling to say, you know, this is the market-based price that I'm expecting based on market analogs. Is the public going to think that this price is worth it or are they going to thi...

Melanie Whittington: Why Are Drugs So Expensive?

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Melanie Whittington: Why Are Drugs So Expensive?

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.