Compared with other countries, the US is again seeing exorbitant prices for a medicine—even one it helped develop.
In the current COVID-19 booster campaign, the Centers for Disease Control and Prevention is paying around $82 for each dose of Moderna’s 2023–2024 updated mRNA COVID-19 vaccine for its program to provide vaccine for the uninsured. That price is a little over three times the $26 per dose the federal government paid for the last updated booster, which was exclusively distributed by the government.
The price hike marks the vaccine’s move from federal distribution to the commercial market. Moderna and rival manufacturer Pfizer raised the US list price of their COVID-19 vaccines by roughly 400 percent. (Moderna’s is listed at $128 and Pfizer’s is $115).
The price hike is particularly remarkable from Moderna, which developed its COVID-19 vaccine with substantial assistance from the federal government. It developed the vaccine in partnership with the National Institutes of Health and got $1.7 billion in federal grant money for its clinical development.
In a March Congressional hearing on the vaccine’s pricing, Moderna’s CEO Stéphane Bancel—who became a billionaire during the pandemic—unabashedly defended quadrupling the price. Specifically, Bancel downplayed the US government’s contribution and suggested the earlier pricing was actually a discount.
“We were under no obligation to do so, but, recognizing the US government’s investments, our company decided to provide the government with a discount,” Bancel said of the $26 per dose pricing.
Sen. Bernie Sanders (I-Vt.), who chaired the hearing, fired back, saying: “This vaccine would not exist without NIH’s partnership and expertise, and the substantial investment of the taxpayers of this country. And here is the ‘thank you’ that the taxpayers of this country received from Moderna for that huge investment: They are thanking the taxpayers of the United States by proposing to quadruple the price of the COVID vaccine.”
Now, adding insult to injury, the European Union may end up paying three times less than the US for the same vaccine. According to a report by the Financial Times, EU health authorities are in the process of negotiating a vaccine supply deal with Moderna—and, so far, the discussed price per dose is just 25 euros, or about $26, which Bancel had suggested previously was a discounted price for the US government. Though the EU’s price is not final, the discussed price in the negotiation is substantially lower than what the US is already forking over for the update shots.
The news, while perhaps enraging, is not surprising. During March’s Congressional hearing, Bancel hinted that the US would not get a good deal on the shots. Sanders asked him the question directly.
“The United States—the people in our country—pay the highest prices in the world for prescription drugs in general… will you at least tell us today that the price you are charging for the vaccine will be lower than what other countries around the world are paying?” Sanders implored.
Bancel eventually replied: “I cannot say the price will be lower than other countries.”
The US by no means paid for the Moderna vaccine. They provided money to push it through clinical trials, but they didn’t fund the development.
Significantly more than that. About 99% of the development was paid for by the US government.
https://www.usatoday.com/story/news/factcheck/2020/11/24/fact-check-donations-research-grants-helped-fund-moderna-vaccine/6398486002/
Yeah, the information in the article is basically meaningless. It doesn’t matter how much the government gave Moderna if there’s no mention of the total development costs (which I have been unable to find the actual numbers for).
The article also confirms that the claim is wrong, but they take a super roundabout way of getting there. The claim was that $2.5b was the total cost of development, the truth is that the $2.5b was for both development and to purchase vaccines
Pretty much every drug developed in the US has some amount of government spending behind it, but that certainly doesn’t mean that the government pays for all of it or that the pharma companies don’t deserve to make a profit on their products.
From what I recall reading a year or two ago, funding was pretty much 1:1 with their development costs for mRNA research over the past decade. And even if it is not 1:1, it is a hell of a lot different then the government only throwing them the $80 million or so it costs to get through trials. The $2.5 billion was not part of the purchase agreements with the US government. That agreement gave the US government the right to purchase vaccines at $16 per dose which was not too different from the EU’s price of $19 per dose.
Yes, most drugs being developed have some government funding. Moderna’s vaccine is different because it was overwhelmingly funded by the government. Pfizer charged similar rates for their vaccine but refused government funding for it. Any drug that receives government funding should be severely limited on the profit they can make on it especially if it was largely paid for by the government.