Moderna is boosting the price of its COVID-19 shot because it faces “increased complexity and risk” as the pandemic stabilizes and the lifesaving vaccine pivots from a government-funded to a commercial product, CEO Stephane Bancel said at a Senate hearing Wednesday on what taxpayers are owed after they supported critical medicine.
Mr. Bancel said the National Institutes of Health and Operation Warp Speed let Moderna develop a vaccine faster in 2020 than it would have been able to on its own, but he rejected accusations of greed. He said his Massachusetts company developed its messenger RNA platform through years of private investment and faces a daunting task once the government stops buying millions of doses.
As the U.S. plans yearly booster campaigns, Mr. Bancel said, Moderna will have to handle logistics, doctor networks and the switch from a 10-dose vial to single-vial doses on its own while accepting the cost of wasted shots. Increased rejections of boosters after the early vaccination push will result in a massive drop in demand.
“We are losing economies of scale. We must deal with supply chain complexity, and we must assume the wastage risk and cost that the U.S. government used to assume,” Mr. Bancel told the Senate Health, Education, Labor and Pensions Committee.
Committee Chairman Bernard Sanders, an independent and democratic socialist from Vermont, hauled Mr. Bancel to Capitol Hill after the drugmaker said it planned to more than quadruple the price of its vaccine this year. The government paid about $26 for each of the latest boosters, but the price will rise to up to $130 per dose.
Mr. Sanders, a hero to the left, congratulated the company for rapidly developing a vaccine. He swiftly pivoted to a scolding, saying Moderna got a major boost from taxpayer-funded research to develop the vaccine.
Mr. Sanders urged Moderna not to raise the price at all because it costs less than $3 to make each dose.
“We are looking at an unprecedented amount of corporate greed, and that is certainly true with Moderna,” Mr. Sanders said. “While Moderna may wish to rewrite history, it is widely acknowledged that both Moderna and the NIH created this vaccine together.”
COVID-19 vaccines will likely transition to the regular market this fall when regulators look to authorize reformulated boosters to combat circulating strains of the virus. Insurers must absorb the increased cost, which could raise premiums.
“Have you finished all of your calculations? Because just by pricing it at that level, our country is going to see millions of people unable to afford it. And if they can afford it, it’s only because insurance premiums are going to be going up for them and for Americans across the country,” said Sen. Edward J. Markey, Massachusetts Democrat.
Mr. Sanders, reminding Mr. Bancel that he became a billionaire through the success of the COVID-19 vaccine, pressed the Moderna CEO to find a cheaper price for government programs such as Medicaid or Medicare and not to charge a higher price for doses in the U.S. than vaccines in other countries.
Mr. Bancel said he could not make those guarantees. He said his teams are working with each government insurance program to ensure fair prices.
“With different customers, there are going to be discussions,” Mr. Bancel said. “We have no idea of the volume we will need this year. We have very increased complexity.”
He said the U.S. will continue to receive a great benefit in terms of reduced health care spending for COVID-19 and that some forms of the flu shot cost up to $95, so his pricing isn’t that unusual.
“We looked at it very carefully,” he said, adding that no one should have to pay anything out of pocket for the shots.
Moderna has pledged to help the uninsured with patient assistance programs so they won’t have to pay for the vaccines, but lawmakers want to know more about how those programs will work.
Mr. Bancel said Moderna will partner with community hospitals and homeless shelters to offer the vaccine free of charge and will make sure the company doesn’t replicate the mistakes of drugmakers who make patient assistance programs too complex.
Moderna became a household name early in the pandemic as its vaccine turned into the dominant tool to fight the coronavirus alongside shots from Pfizer and its German partner, BioNTech.
More than 250 million doses of the Moderna vaccine have been administered in the U.S. alone.
The vaccines use messenger RNA, which injects a snippet of genetic code encased in a bubble of fat to instruct the body to recognize and combat the virus. Scientists credit the shots with saving millions of lives.
Yet Pfizer landed on Congress’ radar in October when the drugmaker told investors that a potential U.S. list price of $110 to $130 per single dose vial “reflects the value of the vaccine and as well the thresholds for what would be considered a highly cost-effective vaccine.”
Moderna then floated a similar price increase, inviting scrutiny from Congress.
Moderna this year made a $400 million “catch-up payment” to the National Institute of Allergy and Infectious Diseases that will be shared with two academic institutions for royalty rights related to a molecular technique it borrowed from the agency while developing the vaccine.
Senate Democrats said Wednesday that Moderna still has a special responsibility to keep its shots affordable because the company received about $10 billion in government support to boost manufacturing capacity, execute large-scale clinical trials and secure doses.
Mr. Bancel told the committee that Moderna developed the fundamentals of the vaccine over the past decade.
“We made these investments before most people had heard about mRNA,” he said.
He said Moderna discounted the cost of its doses in the early stages to pay back the government for its support.
Sen. Bill Cassidy, Louisiana Republican, pointed to the vast return on investment that the U.S. received from the rapid development of the vaccine. He said he worries that the committee is sending a hostile signal to future government partners in the drug industry.
“This is more like a show trial and a public shaming than a fact-finding mission,” he said.
The hearing toggled at times between Democratic concerns about pricing and Republican praise for the U.S. as a beacon of free enterprise and scientific development.
“This country helped change the course of this pandemic through a public-private partnership,” Mr. Bancel said.
Others focused on the vaccine itself or the ramifications of teaming with the government.
Sen. Rand Paul, Kentucky Republican, said he wanted Mr. Bancel to acknowledge the risk of myocarditis, or inflammation of the heart muscle, from the vaccine. He also wondered aloud whether it was a conflict of interest for some in the government to hold patents on the vaccine while federal officials dictate how often the vaccine should be taken.
“This is for the government to decide,” Mr. Bancel said.
Others wanted to know whether Moderna had any connection whatsoever with the Wuhan Institute of Virology, the laboratory in central China that has been pinpointed as the potential source of the virus.
Mr. Bancel assured lawmakers that his company had no ties to the lab.
For more information, visit The Washington Times COVID-19 resource page.
• Tom Howell Jr. can be reached at firstname.lastname@example.org.
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