The CEO of drugmaker Moderna came under fire from lawmakers Wednesday at a Senate hearing focused on the company’s plans to quadruple the price of its Covid-19 vaccine.
Moderna’s Covid booster costs about $26 per dose under a 2022 deal with the government, but the company plans to raise the price to about $130 per dose once the public health emergency ends, which is expected to happen in May. Moderna has promised that its shots will continue to be free for most Americans, but lawmakers worry about how patient assistance programs might be structured. Also, the prices charged to insurers could still be passed along to patients and boost overall health care spending.
The Senate’s Health, Education, Labor, and Pensions committee, led by Sen. Bernie Sanders (I-VT), titled Wednesday’s session “Taxpayers Paid Billions For It: So Why Would Moderna Consider Quadrupling the Price of the Covid Vaccine?” And Sanders wasted no time in laying into the drug company.
“In the pharmaceutical industry today we are looking at an unprecedented level of corporate greed – and that is certainly true with Moderna,” he said.
Sanders ripped the industry, saying that it is generating huge profits — more than $100 billion in 2021 — while more than a third of Americans say they can’t afford the prescription drugs they have been prescribed. “In other words, all over this country, in Vermont and in every state represented here, people are getting sicker and in some cases dying because they cannot afford the outrageous cost of prescription drugs, while these companies make huge profits and their executives become billionaires.”
Sanders asked Moderna CEO Stéphane Bancel to reconsider the vaccine pricing and ensure that Americans can continue to get the shot for free without complicated paperwork or processes. He argued that the U.S. government spent $12 billion on the research, development and procurement of the Moderna vaccine. He said the company has made $21 billion in profits off the vaccine and that Bancel became a billionaire, now worth nearly $5 billion.
Moderna and the government had been locked in a dispute over patent rights to the vaccine and other aspects of the drug’s development. The National Institutes of Health says three of its scientists are “co-inventors” of the vaccine. Moderna recently dropped disputed patent applications and last month disclosed that it had paid $400 million to the NIH and two universities for use of another technique in creating the Covid vaccine.
While some Republicans defended the company along with capitalism and free enterprise, a number joined with Democrats in questioning the planned vaccine pricing. “Why do you need this much money?” Sen. Mike Braun (R-IN) asked, calling for more transparency from the company. “A 400% price increase is preposterous, especially when you’ve been given all this government largesse.”
The company’s counterargument: Bancel defended his company and its pricing. He said the company had recognized the government’s investment and had thus provided a “discount” in pricing despite having “no obligation” to do so. “While the government provided $1.7 billion in grant funding, Moderna returned $2.9 billion,” he said.
He said the company’s Covid-19 booster is different than the original shots, and the vaccine will be more expensive as we transition to the virus being endemic because of the logistical and market challenges involved in making the shots available to 10,000 customers rather than just to the U.S. government. “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,” he said, noting that the company expects a 90% drop in demand.
Bancel also would not pledge that the U.S. would pay less than other countries for the vaccine. “The price will depend on the value in each country. The cost of health care is different in each country,” he said.
Moderna last month projected at least $5 billion in Covid vaccine revenue, down from $18.4 billion in 2022 and $17.7 billion in 2021.
One proposed fix: “Rather than focus solely on Moderna, the government should concentrate on making this episode the last time it invests in drug and vaccine development only to see pharmaceutical companies raise health-care costs with high prices,” writes science journalist Amy Maxmen at The Washington Post. “To make treatments more accessible to Americans who underwrite them in the first place, federal research funders need to add pricing or patenting conditions to their drug-development contracts.”