The price points for investigational vaccine products are becoming more transparent as although none are done, hints as to pricing emerge. Recently, NPR reported on Moderna, Pfizer, and others on vaccine pricing and related topics. It has emerged that Moderna’s mRNA-1273, one of the leading candidates, will cost between $32 and $37 per dose for the investigational product, shaking up some consumer advocates, suggesting the company has received nearly $900 million from the U.S. taxpayer. Based on this pricing, 100 million Americans, and the assumption that two doses are required would generate $6.4 billion on the low end of the pricing spectrum.
‘Smaller Volume Agreements’
However, CEO Stéphen Bancel recently reported during an investor conference call that these price points are associated with “smaller volume agreements.” He emphasized the price could come down for larger volume deals.
Will the Taxpayers Pay Twice?
Zain Rizvi, law and policy researcher with Public Citizen, expressed concern that Moderna is getting subsidized by “Operation Warp Speed,” the federal government’s marshaling of federal resources and dollars to develop a vaccine, then the company “wants to turn around and charge those very same taxpayers the highest public price for a potential COVID-19 . That’s outrageous.” Importantly, Moderna hasn’t announced any price points, and the company is on the record that pricing will be fair and that the company is “committed to responsible pricing.”
Emerging Market Price Points
According to NPR, emerging price points of Operation Warp Speed-financed vaccines are emerging between the $4 and $20 per dose range.
Pfizer’s deal with the deferral government is the most “lucrative to date,” reports NPR, as the government procured 100 million doses of BNT162 (Pfizer/BioNTech) vaccine which comes out to $20 per dose. It should be noted that Pfizer and BioNTech formed their own initiative called “Project Lightspeed” and didn’t take federal taxpayer monies. Hence it’s not under the same pressure as the other biopharma companies that did take federal dollars.
Capitol Hill Interactions
Sydney Lupkin from NPR reported that during a hearing with the House Committee on Energy and Commerce, U.S. Rep. Jan Schakowsky, D-Ill., asked if the vaccine makers would commit to distributing “at cost,” and the response from Moderna president Stephen Hoge: “we will not sell it at cost.” Upon a request to clarify, Hoge continued, “No, ma’am” not at cost.
NPR’s Lupkin reports that Merck also declined to make such a pledge while AstraZeneca declared the existing deal won’t generate a profit, and Johnson & Johnson commits to sell at non-profit for the duration of the pandemic.
Is the Government Under Trump Not doing Good Deals?
President Trump was elected in part due to the perception by enough of the voting population that he would bring a businessman’s touch to Washington. An outsider who knows how to “do deals” would not let corporations conduct sharp-dealing. But under Operation Warp Speed, with a lack of transparency, reports NPR, there is a growing concern that a two-tiered pricing framework “highlights the U.S. government’s misstep in failing to add reasonable pricing clauses to its deals with pharma,” reports Kathryn Ardizzone, an attorney with Knowledge Ecology International, a non-profit working on intellectual property issues. Ms. Ardizzone suggests, “The U.S. government has put up a billion dollars towards the development of the vaccine, and in doing so, should have realized that it has significant leverage” and negotiated better terms.
While Adam Mossoff, a law professor at George Mason University, retorts that trying to artificially depress biopharma prices during the pandemic could materially hurt drug development innovation.
Lack of Transparency
The reality is that it’s not clear how much of the vaccine development bill is being subsidized by taxpayers. The BARDA and Moderna contract requires regular disclosure of funding from the federal government, but Public Citizen and Knowledge Ecology report that isn’t happening. Note the TrialSite will be providing a summary of transparency and governance issues with Operation Warp Speed.