Facing Senators, Moderna CEO Defends Quadrupling Cost of COVID Vaccine

A vial labeled "Moderna COVID-19 Vaccine" on Jan. 16, 2022. (Dado Ruvic/Illustration/Reuters)

Moderna CEO Stéphane Bancel defended his company’s decision to drastically increase the cost of the COVID-19 vaccine in a hearing before the Senate Committee on Health, Education, Labor, and Pensions on March 22.

Committee Chairman Bernie Sanders (I-Vt.), and Ranking Member Bill Cassidy (R-La.) both thanked Bancel for his company’s work to push out a vaccine at the request of the U.S. government during the COVID-19 pandemic.

Moderna has proposed that when the government stops its involvement with the procurement and delivery of the vaccine, the price will increase to $130 per dose, which is roughly four times the price at which it was sold to the government during the pandemic.

Sanders’s remarks, however, focused on the massive profits the company has brought in, and will likely continue to bring in, because of the use of Moderna’s COVID-19 vaccine. Sanders accused the pharmaceutical industry of an “unprecedented level of corporate greed.”

“Today, while 37 percent of the American people could not afford the prescription drugs their doctors prescribe, 10 major pharmaceutical companies made over $100 billion in profits in 2021—a 137 percent increase from the previous year,” Sanders said.

“In these corporations, the 50 top executives made over $1.9 billion in total compensation in 2021 and are in line to receive billions more in golden parachutes once they leave their companies. In other words, Americans die because they cannot afford the outrageous cost of prescription drugs, while the drug companies make huge profits.”

Sanders also asserted that Moderna benefited from the aid of the National Institutes of Health (NIH) and other federal agencies that worked with Moderna to research, develop, and distribute the vaccine.

Bancel objected to the NIH’s characterization that they are co-authors of the Moderna COVID-19 vaccine. Although the NIH worked with Moderna, the CEO seemed confident that their work was redundant and that Moderna alone was responsible for the vaccine.

Republicans’ Defense of Decision

Cassidy, Sen. Mitt Romney (R-Utah), Sen. Tommy Tuberville (R-Ala.), and others were more supportive of the CEO’s decision to increase the price of the vaccine.

Several Republicans on the committee gave Bancel a chance to elaborate on what his company was doing to further expand the use of mRNA in medical research, including research into cures and mitigation for several types of cancer and heart disease.

Romney allowing the CEO to speak about how he made his money, which wasn’t via a salary, but rather by retaining stock in the company, which saw massive increases when it was announced they would be partnering with the government to create the vaccine.

During his exchange with Sen. Patty Murray (D-Wash.), Bancel clarified some of the details of the government investment in vaccine research.

He said the U.S. government invested $1.7 billion in Moderna’s vaccine development. When the product was being sold back to the government in September 2020, Moderna proposed a discount on the product to return the capital investment.

The CEO asserted that the government received roughly $2.9 billion in discounts on the Moderna vaccine, pointing to the end of that discount as part of the reason for the price increase. Bancel also pointed to potential gains, claiming that the vaccine kept Americans out of the hospital during the pandemic.

In addition to the end of the government discount once the product is sold in the private sector, the pharmaceutical executive pointed out that Moderna will now have to assume the risk of loss.

Bancel also noted that when the government was distributing the vaccine, the company was delivering multi-dose vials to just three locations nationwide. When it starts selling in the private sector, it will have to change its packages and deliver to individual hospitals and pharmacies.

There is also the possibility of loss, as was experienced by the government. Bancel said he believed that about two-thirds of the 160 million doses of their vaccine that were bought by the government went unused. Only roughly 50 million doses “got into arms,” he said.

The CEO’s statistics point to the actual cost per used dose being about $80. Moving into the private sector, Moderna will now take responsibility for that potential loss in the future.

Call to Moral Obligation

Sen. Bob Casey (D-Pa.) made an appeal to the witness’s religious beliefs. Casey referenced the extended version of Bancel’s testimony provided to the senators.

Casey noted Bancel’s assertion that “the continuous pursuit of excellence, service of the greater good, and social responsibility” have shaped his leadership at Moderna. Given those values, the lawmaker asked if it was the company’s obligation to make its product inexpensive and accessible.

In his response, Bancel pointed to the price of other vaccines, saying the price of the flu vaccine is about $95 and that there are many more people hospitalized because of COVID-19 than the flu. He said it was “important” that the vaccines move into the market at a price based on value.

“A lot will change for our company as we step into the shoes of the U.S. government to ensure that everyone who wants a vaccine has access in a convenient location,” Bancel stated in his written testimony. “One thing that will not change is our commitment to delivering the greatest possible impact to people through our mRNA medicines.

“We are committed to ensuring anyone who wants a vaccine can get one, without price posing a barrier. Our vaccine will continue to be available at no out-of-pocket cost to insured people. For the uninsured (or underinsured), our free drug program will ensure access by providing COVID-19 vaccines at no cost.”