Moderna chief executive Stéphane Bancel was criticized by lawmakers during a US Senate hearing on Wednesday over the Cambridge company’s plans to raise the price of its COVID-19 vaccine to about $130 — more than four times what it charged the federal government for updated booster shots.
For nearly three hours, the Senate Committee on Health, Education, Labor and Pensions urged Bancel to reconsider Moderna’s decision to increase the price of its vaccine and repeatedly cited the National Institute of Health’s role in designing, testing, and funding the vaccines.
“This vaccine would not exist without NIH’s partnership and expertise and the substantial investment of the taxpayers of this country,” Senator Bernie Sanders of Vermont said. Moderna is “thanking the taxpayers of the United States by proposing to quadruple the price of the COVID vaccine,” he added.
Moderna has previously said it will make its COVID shots freely available to anyone without insurance, but senators were skeptical about how that would work. They also worried that the price hike will cost taxpayers billions of dollars through higher Medicare and Medicaid premiums.
“We want to make sure that cost and out-of-pocket cash is not a barrier to access to vaccine,” Bancel said. He later added Moderna wants to partner with local community hospitals, and potentially homeless shelters, to make it easier for uninsured patients to get the vaccine for free.
Some senators were concerned that Moderna’s price hike would cause more people to eschew future booster shots, thus causing more disease and death from the virus. But booster shots, which were first updated last fall, have proven unpopular among Americans. Only 16.4 percent of the population has received the latest shot, according to the Centers for Disease Control and Prevention.
Questions frequently veered into diatribes against the problems of unrestrained capitalism. Senators asked why Bancel and his company should reap billions in profits for a product that, in their eyes, taxpayers funded. “We are looking at an unprecedented level of corporate greed,” Sanders said.
The senator also singled out Bancel and three other Moderna founders for making billions as Moderna’s stock soared during the pandemic: Flagship Pioneering chief executive Noubar Afeyan, Harvard scientist Timothy Springer, and MIT scientist Robert Langer.
Bancel ignored comments about his personal wealth ― the vaccine’s success has made him a billionaire ― and countered that his company’s mRNA technology was based on more than a decade of research that was largely supported by $3.8 billion from private investors. He said that Moderna is spending more than $4.5 billion in research and development of new vaccines and medicines this year alone and declared that the company is an “American success story.”
“After losing money for 10 years, Moderna created a vaccine that helped end the pandemic,” Bancel said. “We were able to move quickly because of a decade of private investment in our mRNA platform.”
Moderna earned more than $36 billion from sales of its COVID vaccine in 2021 and 2022, raking in more than $20 billion in profits. The cost of its vaccine has varied throughout the pandemic, depending on what country was ordering the shots and when, but the firm’s latest booster shots cost about $26. Even with that price hike, the firm expects sales to plummet this year.
“We expect a 90 percent reduction in demand,” Bancel said. “We’re losing economies of scale. We must deal with supply chain complexity. And we must assume the wastage risk and cost that the US government used to assume.”
Sanders noted that the government spent $12 billion on developing Moderna’s vaccine, although Bancel contended that only $1.7 billion was used to actually develop and test the vaccine; the rest was used to purchase doses delivered around the country.
Moderna and the NIH have sparred over who should credit and profit from development of the vaccine. Before the pandemic, NIH scientists discovered a way to engineer coronavirus proteins that trigger better immune responses. Those researchers were focused on a different coronavirus than the one that causes COVID-19, but the strategy was quickly applied to SARS-CoV-2 when the new virus emerged in early 2020.
Last month, Moderna told investors that it had settled on a $400 million “catch-up payment” to the NIH for using the agency’s patented technology in its vaccine. At the Senate hearing, Bancel said that the company has decided to “abandon” its patent in the dispute. “We are moving on because we cannot agree on what happened,” he said.
Republican Senator Bill Cassidy of Louisiana acknowledged that “Americans pay too much for prescriptions drugs” but took issue with the title of the hearing — ‘Taxpayers Paid Billions For It: So Why Would Moderna Consider Quadrupling the Price of the COVID Vaccine?’ — which he thought inappropriately “presumed guilt.”
“This is more like a show trial and a public shaming than a fact-finding mission,” Cassidy said, before questioning Sanders’ rhetoric. “The chair speaks of corporate greed in the context of over 1 million Americans who tragically died during the pandemic. I don’t see the link. I just don’t. The vaccine was available. As soon as it was available, it was implemented and lives began to be saved.”
When asked pointedly why he was raising the price of its vaccine, Bancel said that as Moderna shifts to single-dose vials of the shot, it will have to absorb more of the costs of producing, packaging, and distributing the vaccine than before, including vaccines that expire before they’re used.
Senators seemed unconvinced by Bancel’s argument and expressed frustration at the opaque pricing of pharmaceutical products in general and with COVID vaccines in particular. “We have no transparency in pricing. It is a totally insane situation. Everybody pays a different price,” Sanders said. He asked if Bancel was prepared to charge the US government “substantially” less than other countries.
Bancel would not commit to selling the vaccine for a lower price in the United States or promise to lower the new price of the shot. He said that Moderna doesn’t know exactly how much vaccine it will make this year and has “very increased complexity.”
“You have complexity, but you have money for stock buybacks by the billions and you guys became billionaires,” Sanders said. “That doesn’t seem too complex to me.”