WASHINGTON — Moderna CEO Stéphane Bancel and Senate health committee Chair Bernie Sanders shook hands amicably before Wednesday’s hearing examining the company’s vaccine pricing strategy began.
That’s about where the goodwill ended between the two.
Sanders, a Vermont Independent, promptly highlighted the $12 billion the federal government spent on research, development, and procurement of Moderna’s Covid-19 vaccine.
“And here is the thank you the taxpayers of this country received from Moderna for that huge investment: They are thanking the taxpayers of America by proposing to quadruple the price,” Sanders quipped.
Moderna is planning to price its vaccines at about $130 per dose, after selling the products for significantly less to the federal government. The company charged $26.36 per dose in a government contract signed in July 2022.
Bancel said the price hike is justified because in the post-pandemic market, the company will have to expand its warehouse space, take financial responsibility for wasted doses, and change the size of its vials.
“This is not the same product,” Bancel countered.
Bancel also refused to commit to offering the United States a lower price than other countries receive. However, Bancel said the company is having conversations with government agencies to determine how much different programs will actually pay.
Bancel painted Moderna’s rise as a sweeping success. After 10 years of losing money, studies conducted at unprecedented speed proved its vaccine worked. Moderna, which seven years ago had ambitions to bring 100 drugs to clinical trials in a decade, has had only one product approved — but that one product has earned the company about $40 billion over the past two years.
But Bancel, as Sanders pointed out, didn’t mention the National Institutes of Health once in his testimony, and instead emphasized the private funding the company received before the pandemic.
“While Moderna may wish to rewrite history, it is widely acknowledged that both Moderna and the NIH created this vaccine together,” Sanders said.
The company spent years squabbling with government scientists over a chemical technique integral to mRNA vaccines, a process that concluded in December when Moderna finally agreed to make a $400 million “catch-up payment” to the NIH.
“We disagree,” Bancel said when Sanders asked him whether Moderna considers NIH a co-author of the vaccine.
Bancel also said Moderna voluntarily provided the federal government a $2.9 billion discount on its Covid-19 vaccine, but it’s unclear what the full, undiscounted price actually was, or whether the United States received more favorable treatment than other countries throughout the purchasing process that didn’t invest such large sums in the development process. By August 2021, Moderna was charging the European Union $25.50 per dose, which is actually cheaper than the rate offered to the United States government a month earlier.
Christopher Morten, an associate clinical professor of law at Columbia University who was an expert witness at the hearing, called the idea that the price Moderna offered to the federal government was discounted “revisionist history,” as the price was similar to the price Pfizer charged the federal government, and also because Moderna offered similar prices to other countries.
Bancel also contended that the price hike wasn’t motivated by a desire to boost the company’s flagging revenue.
“The price is not linked to the company’s performance, the price is linked to the value of the product,” Bancel said.
Bancel got a warmer reception from the committee’s top Republican, Sen. Bill Cassidy (R-La.), who warned against being too aggressive in attacking a company that dropped everything to help develop a vaccine that helped mitigate the damage caused by the Covid-19 pandemic.
“We should not hate the thought of a person or company making a profit [so much] that we lose sight of the ideas and accomplishments their profit is rewarding,” Cassidy said.
Craig Garthwaite, a research professor at Northwestern University, also said that if the government wanted to regulate Moderna’s prices in the commercial market, the terms of that agreement should have been worked out as terms of the initial funding contract.
Sen. Mitt Romney (R-Utah), who made his fortune at the investment firm Bain Capital before running for office, echoed the sentiment, offering up Moderna as an example of capitalism at its best.
However, Sen. Mike Braun (R-Ind.) called Moderna’s price increase “preposterous,” and questioned whether Moderna truly needed to set up its own distribution system.
Several senators raised questions about whether patients will truly be able to access Moderna’s proposed patient assistance program. The company has promised to ensure the vaccines are available for free to patients with or without insurance, but Moderna has released virtually no details about how it will actually work.
“We want to learn from what is not working from current programs,” Bancel said.
Sen. Tina Smith (D-Minn.) pressed further in noting that patients will still be paying the higher prices in the forms of insurance premiums, and Bancel said that the cost savings from people being hospitalized from Covid-19 outweigh even higher prices for vaccines.
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