“We tried to think very reasonably about the price of this, and I think we’ve landed on a price that is consistent with value,” Moderna President Stephen Hoge told federal lawmakers at a Wednesday hearing of the Senate Health, Education, Labor and Pensions Committee.
He added that the price could change depending on circumstances, and that the company was open to financing programs for uninsured patients to afford the jab.
That hearing was called by committee chair US Sen. Bernie Sanders (I-VT), who denounced Moderna’s planned price hike as “an unprecedented level of corporate greed.”
“As soon as Moderna started to receive billions of dollars from the federal government, Mr. Bancel literally became a billionaire overnight and is now worth over $4 billion. He was also able to secure a golden parachute for himself worth another $926 million after he leaves the company. But let’s be clear: Mr. Bancel is not alone,” Sanders said at the hearing, referring to Moderna CEO Steve Bancel.
“None of these four individuals were billionaires before the taxpayers of our country funded the Covid-19 vaccine,” he said, adding that Moderna was “thanking the taxpayers of the US by proposing to quadruple the price of the Covid vaccine to as much as $130 once the government stockpile runs out.”
Via partnerships with the National Institutes of Health and other federal agencies, vaccine makers Moderna, Pfizer and Johnson & Johnson received a total of $12 billion in taxpayer money for research, development, and procurement of vaccines against SARS-CoV-2, the virus that causes COVID-19. In all, the federal government has spent more than $30 billion, including the purchasing contracts.
Bancel defended the price hike at the hearing, telling lawmakers, “we feel we have honored the support we got and then paid it back and then some.”
“After losing money for 10 years, Moderna created a vaccine that helped end the pandemic. We were able to move quickly because of a decade of private investment in our mRNA platform and because of a decision in 2016 to build a manufacturing plant in Massachusetts,” Bancel said.
Until now, the three companies have made shots under a series of massive contracts with the US government and the governments of several other nations who sought to inoculate their entire populations against the virus. In those contracts, Moderna charged the US between $15 and $26 per vaccine dose, with full inoculation being a two-dose series. Later, the US bought several rounds of booster shots as well.
When the price hike was announced in January, Sanders sent Bancel a letter urging him to lower the price. After Sanders used his power as Senate health committee chief to call on Bancel to testify last month, Moderna announced that the vaccine would remain available “at no cost” to patients regardless of insured status.
“Everyone in the United States will have access to Moderna’s COVID-19 vaccine regardless of their ability to pay,” the company said.
At the time, many assumed this was a reversal of their price hike, but at the Wednesday hearing it became clear that the February statement was in fact simply a reference to the shot being covered by health insurance plans and Moderna offering a “patient assistance program” for uninsured recipients.
'Significant Opportunity' for Profit
Indeed, as early as March 2021, as mass vaccination was just getting underway in the United States, all three companies were boasting to their investors about their plans to dramatically raise vaccine prices once the federal government contracts ended.
“As we move from a pandemic state, from a pandemic situation to an endemic situation, normal market forces, normal market conditions will start to kick in,” Pfizer Chief Financial Officer (CFO) Frank D’Amelio told investors at the Barclays Global Healthcare Conference on a March 11, 2021.
“And factors like efficacy, booster ability, clinical utility will basically become very important, and we view that as, quite frankly, a significant opportunity for our vaccine from a demand perspective, from a pricing perspective, given the clinical profile of our vaccine.”
A month prior, D’Amelio had given investors a target price of $150 to $175 per shot.
Hoge, the Moderna president, had similar words at the Barclays conference, telling investors that “post-pandemic, as we get into those what I will call seasonal epidemics that you would expect to happen with a SARS-CoV-2 virus, we would expect more normal pricing based on value.”
While the World Health Organization (WHO) defines whether or not a pandemic exists, the Biden administration has signaled that its declaration of a Public Health Emergency will be allowed to expire in May 2023.