Moderna CEO Stéphane Bancel defended his company’s plans to raise the price of its COVID-19 vaccine at a Senate hearing Wednesday, saying the increase is justified by the loss of lucrative government contracts that have to date shaped distribution in the U.S.
Bancel’s arguments were repeatedly challenged by Democratic lawmakers, however, in a public and at-times tense confrontation over the appropriate price for a vaccine that was supported by federal funding.
Similar to Pfizer, Moderna plans to charge $130 a dose for its shot in the commercial market, much higher than the $25 to $30 a dose the U.S. government paid during the pandemic emergency. The planned price hike drew scrutiny from the Senate Committee on Health, Education, Labor and Pensions, which titled Wednesday’s hearing, “Taxpayers Paid Billions For It: So Why Would Moderna Consider Quadrupling the Price of the COVID Vaccine?”
The answer, Bancel claimed, is the added complexity of private market sales, and the risks of uncertain demand. Moderna will now be selling two product types — single-dose vials and prefilled syringes — to 10,000 customers who will use them at around 60,000 locations, Bancel said. The company was previously delivering vaccines to three warehouses managed by the Centers for Disease Control and Prevention.
“The true cost to the U.S. taxpayer was way above $26 because [taxpayers] paid for doses that ended up going to waste, and also this does not include the cost of distribution, which now we're going to have to bear,” Bancel said. Of the 160 million doses the U.S. government bought in the fall of 2022, only 50 million were administered, giving a cost of around $80 per administered dose, he said.
The committee’s chair, Democratic Senator Bernie Sanders of Vermont, several times pressured Bancel to reconsider the price, citing the U.S. government’s contribution of $1.7 billion toward the research and development of the company’s vaccine and the billions more it made from federal contracts.
Bancel said the company paid back the R&D grants through the discounts it gave in the government contracts. While $130 is the list price Moderna has set, the actual price paid will depend on the type of product, vial or syringe, and the outcome of discussions with insurers and government payers like Medicare, he said.
His argument drew a rebuttal from Sanders, who engaged the CEO in a contentious back-and-forth.
“We have no transparency in pricing. It is a totally insane situation. Everybody has a different price,” Sanders said. “The United States government helped you develop that vaccine, it is a huge consumer. Are you prepared to substantially charge less for the vaccine to the United States government and our agencies?”
“Given the situation at hand, Mr. Chairman, we have no idea of the volume that we need this year,” Bancel replied. “We have very increased complexity.”
“You have complexity, but you have money for stock buybacks by the billions and you guys became billionaires. That doesn't seem too complex,” Sanders said.
Bancel made $398 million last year, according to a report last week by Stat News, which accounted for the actual realized gains of stock the CEO sold, in addition to his salary and bonus. The biotechnology company repurchased $3.3 billion worth of its shares last year, according to a regulatory filing.
Moderna last month promised it would ensure the vaccine is available “at no cost” to people through an access program. Bancel repeated that commitment, saying Moderna wants a simple program without a lot of paperwork, and with outreach so it is not confusing. “Whether you’re insured or uninsured, there will be no co-pay,” he said.
Operational details of how that pledge would be carried out were less clear, however.