On May 11, the U.S. public health emergency (PHE) for COVID-19 will end. And with it, many Americans will no longer have access to free, government-sponsored COVID vaccines.
Under the Public Health Service (PHS) Act, the U.S. government purchased and distributed COVID-19 vaccines for free to its populace, regardless of insurance or citizenship status. The U.S. has spent more than $23.5 billion on purchasing 1.2 billion vaccine doses from Moderna and Pfizer (at a weighted average of $20.69 per dose) since they were deployed. This is on top of the initial government investment (through taxpayer dollars) for the development of the COVID vaccines of between $18 and $23 billion. Although the U.S. will continue to give out its substantial stockpile of vaccines for free to the uninsured until supply runs out (sometime in 2024, according to estimates from the Kaiser Family Foundation), COVID-19 vaccines and treatments will transition to being provided by commercial or public insurance entities. Therefore, the vaccine price point set by companies in the private sector will matter.
Moderna raised eyebrows last week — including from Congress — when it announced plans to increase the price of its COVID-19 mRNA vaccine by more than 400% from $26 to $130. Although Moderna has promised a patient assistance program to provide its vaccine for free for approximately 30 million uninsured Americans, the details on this program are scant and paperwork for such initiatives can be prohibitive.
While Pfizer announced a similar price hike to between $110-$130 per dose last October, the public and government uproar was significantly lower than that greeting Moderna’s announcement. This discrepancy was likely because Moderna received significantly more federal funding than Pfizer for vaccine development. However, a recent analysis in The BMJ showed that Pfizer more than made up for this discrepancy since the U.S. government purchased more vaccine doses from Pfizer.
So, what else may be playing into the outrage? One key difference between Moderna and Pfizer vaccines is that NIH scientists helped develop the Moderna COVID-19 vaccines, leading to NIH vaccine scientists such as Barney Graham, MD, and Kizzmekia Corbett, PhD, being hailed as TIME Magazine’s 2021 “Heroes of the Year.” As part of an ongoing dispute over intellectual property of the Moderna COVID vaccine, the company paid the NIH $400 million in February 2023.
Now, Moderna is being raked over the coals for what many see as unethical price gouging of the American taxpayers who directly funded research and development of the vaccines. They demand a “just” price for something that costs less than $3 a dose to manufacture. In addition to receiving significant federal investments, Moderna had 2022 earnings of nearly $19 billion from COVID vaccine sales. Although demand for COVID vaccines has dropped significantly in light of currently high rates of population immunity from both the vaccine and infection, the World Health Organization is recommending booster shots for those still at high risk (older, immunocompromised) for severe disease on an ongoing basis, as well as certain vulnerable populations, meaning demand will persist among certain groups.
Before Congress, Moderna CEO Stéphane Bancel said the increased price was necessary to account for 1) the cost of distributing the vaccine, which does fall on the company since the federal government will no longer do it, 2) “supply chain issues,” which were not specified, and 3) reduced demand for the vaccine. Let’s be clear, these are all legitimate market forces in a capitalistic society such as the U.S. that a company does have to account for when selling any product.
Perhaps many are disappointed in Moderna because they expected a more altruistic pricing approach. After all, we have seen pharmaceutical company altruism in response to certain epidemics, such as HIV, given the prolonged history of low antiretroviral (HIV medication) access for the majority of those living with HIV in low-and middle-income countries. But altruism is rarely Big Pharma’s M.O. A look at the cost of other important vaccines — from Shingrix ($185 per dose for a two-dose regimen) to the HPV vaccine (around $300 per dose, on average) — provides a more realistic picture of their often steep price point. So, despite global inequities in COVID vaccine distribution and significant investment from the U.S. government, these companies appear to again be throwing altruism out the window. The least we can do is learn a few lessons: the U.S. should strongly consider the following strategies to prepare for a potential future COVID surge or future pandemics.
Negotiate Harder
For Sen. Bernie Sanders (I.-Vt.) and others to expect Moderna to act honorably is likely not realistic. In 2021, the Trump administration chose to not stipulate a special pricing program in its Operation Warp Speed contract with Moderna perhaps because it wanted the company to generate a safe and effective vaccine as quickly as possible. Lesson learned. We must negotiate harder next time and balance speed with long-term access.
Introduce a Little Competition
While the advent of mRNA vaccine technology saved countless lives and has many future applications, where does that leave us in the current moment of the pandemic?
We still have many unanswered questions about the effectiveness of our current vaccine strategy. Is variant chasing an effective strategy for updating the vaccines? While there is talk of approving a second round of bivalent vaccines, is this appropriate given how far the current XBB family of subvariants have mutated from the BA.4/5 variants in the currently available bivalent Moderna vaccine?
If Moderna wants to apply free-market strategy to its pricing, then we should be actively looking to fund companies that are developing pan-coronavirus, variant-resistant, or whole virus vaccines (like Covaxin). Or perhaps nasal vaccines that may produce sterilizing immunity.
Nothing like introducing a little competition to drive a price down.
Stronger Public-Private Partnerships
The federal government would be wise to partner with COVID vaccine technology programs that are offering their vaccine at a low-price off-patent. For example, Texas Children’s Hospital and its patent-free COVID vaccine technology, led by Peter Hotez, MD, PhD, has provided 100 million doses to low- and middle-income countries at approximately $2-3 per dose. And contrary to Pfizer and Moderna, they made their development process publicly available in open access literature.
Advocacy
During the HIV movement, pharmaceutical companies were eventually shamed into lowering their prices for prescription antiretroviral medications — or accepting that the medications would be made off-patent in countries such as India and Brazil, given that HIV medications were not accessible to most of the planet. Advocacy by physicians, community members, patients, and science reporters could go a long way to drive COVID vaccine prices down in light of significant U.S. investment and inequities.
In conclusion, regardless of whether Moderna’s pricing decision is more a product or corporate greed or our capitalist system, we can take this moment to focus on advocacy for fair pricing and brainstorm other ways to drive prices down. Future pandemics will rely on the rapid development of vaccines — we need to take lessons from this one to apply to the next.
Michael Daignault, MD, is an emergency physician at Providence Saint Joseph Medical Center in Burbank, California. Monica Gandhi, MD, MPH, is a professor of medicine in the school of medicine at University of California San Francisco.