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The US government has now paid Moderna $6b for vaccine effort

The Cambridge biotech will receive up to $236 million in new funding to offset costs associated with its ongoing trial involving 30,000 volunteers.

Vials of Moderna's COVID-19 vaccine were discarded after the doses were dispensed at a vaccination site in Paris.Nathan Laine/Bloomberg

The federal government has now invested about $6 billion in the COVID-19 vaccine from Moderna, the Cambridge biotech that few outside the scientific and investment worlds had heard of a couple of years ago.

Moderna said in a filing with the Securities and Exchange Commission on Wednesday that under a change in its government contract on April 18, it will receive as much as $236 million in additional reimbursement for costs associated with its late-stage vaccine trial on about 30,000 volunteers, including safety monitoring.

The additional money is on top of the $5.75 billion that the government already poured into Moderna to help it develop, test, and manufacture the messenger RNA vaccine ― as well as to secure 300 million doses.


Moderna spokesman Ray Jordan said taxpayers got a good deal, considering that the $6 billion will pay for 150 million people in the US to receive the two-dose vaccine.

“From my point of view, the company sold a lot of effective vaccine at $20 a dose,” he said.

Mani Foroohar, an analyst in Boston with SVB Leerink, said it was hardly unprecedented for the government to subsidize the development of pharmaceutical products for a public health emergency.

In 2016, Moderna received $8 million with the potential for up to $125 million from the Biomedical Advanced Research and Development Authority, a component of the US Department of Health and Human Services, to accelerate development of an mRNA vaccine for Zika. (The company is still working on that project.)

What makes the bankrolling of Moderna’s COVID-19 vaccine so extraordinary, Foroohar said, was the scale, which “reflects how unusual the pandemic is and the fact that this is very literally a once-in-a-lifetime event.”

Moderna’s COVID-19 vaccine was the second one cleared in December by the Food and Drug Administration for emergency use. A week before, the FDA did the same for another mRNA vaccine, made by New York-based Pfizer and its German partner, BioNTech.


Pfizer also has received $6 billion from the federal government, which has purchased 300 million doses for use in the US. The difference is that Pfizer didn’t accept federal funding to help develop, test, and manufacture the vaccine. Pfizer’s chief executive, Albert Bourla, said he didn’t want any government interference. His company signed an advance-purchase agreement, meaning it would not get paid until it delivered the vaccine doses.

“Pfizer’s COVID-19 vaccine development and manufacturing costs have been entirely self-funded,” the company said Wednesday. “We invested about $2 billion at risk and are prepared to continue bearing the costs of all development and manufacturing, in an effort to help find a solution to this pandemic. We decided to self-fund our efforts so we could move as fast as possible.”

In exchange for assuming the risk of developing the vaccine, Pfizer charged the government more for each dose in its initial contract, about $19.50, compared with $15 a dose charged by Moderna.

Moderna’s vaccine also has had a far bigger impact on the biotech than Pfizer’s vaccine has had on the pharmaceutical giant. Moderna, an 11-year-old company, had never gotten a product to market before the FDA cleared the vaccine. In contrast, the 172-year-old Pfizer is one of the world’s biggest drugmakers, with dozens of products on the market.

The government’s investment in Moderna and the firm’s remarkable success with its COVID-19 vaccine has made fortunes for the company’s earliest investors. Moderna’s share price has increased almost sixfold since March 1 of last year.


Among those who have become billionaires is chief executive Stéphane Bancel, who is now worth more than $5.5 billion. On Wednesday, the Massachusetts Biotechnology Council announced he will receive an innovative leadership award named for the late Henri Termeer, the one-time head of Genzyme and a towering figure in biotechnology. The award will be presented to Bancel at MassBio’s State of Possible Conference on May 19.

Johnson & Johnson’s vaccine was the third cleared for emergency use in the US, in February. That company also received financial help from the federal government.

The government has paid the New Brunswick, N.J.-based health care giant $2 billion for development and clinical trials and orders of 200 million doses of the one-shot vaccine, at a cost of about $10 a dose. The company has said it doesn’t intend to make a profit from its use during the pandemic.

This week, US Senators Elizabeth Warren and Edward J. Markey of Massachusetts, along with three Democratic colleagues, sent letters to all three drug makers asking how they plan to expand vaccine access internationally, particularly in India, where more than 350,000 new infections were reported in a single day this week. Neither Moderna, Pfizer, nor Johnson & Johnson have deals to sell vaccines to India.

“Increasing COVID-19 vaccinations in India is urgently needed to reduce human suffering and prevent unnecessary deaths,” the senators wrote. “It could also help halt the spread of coronavirus variants that could prolong the pandemic across the globe.”


As vaccination access lags in many poorer countries, the senators wrote, the rapidly spreading and evolving virus could develop a variant resistant to vaccines. They suggested that drugmakers waive patent protections and share technology, including vaccine formulas and production methods, and join WHO’s Technology Access Pool to foster cooperation.

The letters were also signed by Senators Chris Murphy of Connecticut, Tammy Baldwin of Wisconsin, and Jeff Merkley of Oregon.

Jonathan Saltzman can be reached at jonathan.saltzman@globe.com.