Preheat the oven to 400 degrees F and brush a baking sheet with olive oil. Pulse the pepperoni in a food processor until ground; transfer to a medium bowl (no need to rinse out the food processor). Add the beef, panko, egg, paprika, 1/2 teaspoon salt and a few grinds of pepper to the bowl; mix with your hands until combined. Form into 20 golf ball-size meatballs and arrange on the prepared baking sheet. Bake, turning halfway through, until browned, about 12 minutes.
Meanwhile, add the roasted red peppers and tomato paste to the food processor and puree until smooth. Transfer to a large skillet along with the chicken broth and bring to a simmer over medium-high heat. Cook until slightly thickened, about 5 minutes; season with salt and pepper.
Transfer the meatballs to the sauce and continue to cook, gently stirring to coat, until the meatballs are tender, about 10 more minutes. Divide the meatballs and sauce among bowls.