Moderna CEO Stéphane Bancel attempted on Wednesday to win over lawmakers irate about the company’s planned COVID-19 vaccine price increase, weathering a barrage of criticism from Democrats angry at the company’s profits from its groundbreaking mRNA vaccine.
In a voluntary appearance before the Senate Health, Education, Labor and Pensions Committee and its firebrand chairman, Vermont independent Bernie Sanders, Bancel defended the company, whose vaccine sped to market in record time, helped end worldwide shutdowns and turned Moderna’s top executives into billionaires.
Moderna plans to hike the price of its COVID-19 shot from $26 to between $110 and $130 as vaccine purchases transition from the federal government to commercial payers. Bancel said the company was also in discussions over prices for Medicare, Medicaid and other government payers.
“You can come up with all the great drugs in the world — we appreciate that — but if people can’t access them,” Sanders said, “or they go broke or go bankrupt having to buy them, it doesn’t mean anything to those people.”
Ranking member Bill Cassidy, R-La., said he shared Sanders’ concerns about drug prices, but dismissed the tone of the hearing as a “show trial and public shaming.” He trumpeted the millions of lives saved by the vaccines, in addition to preventing billions of dollars in costs to the global economy by ending shutdowns.
“We got a bargain here,” Cassidy said.
Democrats drilled Bancel on the details of the company’s plan to continue offering free shots to the uninsured. Bancel said he was working to make the program simple and easy to access, including by partnering with community hospitals and homeless shelters. He also told Cassidy they would examine covering administration fees from doctors and pharmacists.
“We have heard loud and clear that the systems set up by big companies are too complicated,” he said of other similar programs. “Too much paperwork, takes too much time.”
He also defended the price increase, noting that the vaccine is Moderna’s first product and the company now has to establish all the necessary sales and distribution channels. Sales have also plummeted as fewer people either need or want additional shots.
“The volume we had during the pandemic gave us economies of scale we won’t have anymore,” Bancel said. “That is why it’s different.”
He said the company repaid the federal government’s $1.7 billion Operation Warp Speed grant through a discounted price on the initial purchase. The $16 price per dose amounted to a $2.9 billion total discount.
“When you think about what happens in any other industry, when you get a very large volume, you get a very large discount,” he said. “That’s actually what we did.”
The argument did not win over everyone, and the criticism at times strayed onto the Republican side of the dais. Indiana Republican Mike Braun called the 400 percent planned price increase “preposterous.”
“You cannot — as well as the rest of the industry, including hospitals — have the best of both worlds where you want government to be in there helping you when it’s tough,” he said.
Moderna has a fractured relationship with the federal government.
The company has leaned heavily on taxpayer-funded research since its 2010 inception, before the pandemic and Operation Warp Speed. Bancel said the company also invested $3.8 billion of private investments in research and development before the vaccine launched.
The public sector entanglements led to patent disputes with the National Institutes of Health and other academic institutions. Moderna recently abandoned the dispute with NIH, striking a deal to pay the agency $400 million for a molecular stabilization technique and to pay “low single-digit royalties” to NIH on future vaccine sales.
The company is also locked in patent disputes with fellow COVID-19 vaccine developer Pfizer and other pharmaceutical companies.
Bancel made nearly $19.4 million in 2022, and is due to receive another $393 million from the sale of stock options later this summer. He has pledged to donate the $176 million in after-tax proceeds from that sale to charity.
Total taxpayer investment on the Moderna vaccines reached $12 billion, Sanders said, and Moderna has made $21 billion in profits. The mRNA platform has also opened a trove of additional opportunities for the company, which is now exploring products in a number of areas like cancer.
Moderna is planning to launch a phase III study on a melanoma vaccine after initial trial results showed a 44 percent decrease in disease recurrence and death among study participants when used in combination with Merck’s Keytruda drug.
Bancel said the prospect of reinventing drug delivery is why he joined the startup in 2011.
“If it was going to work, it was going to be a new platform,” he said. “It was going to be a new way to make medicine. And that’s why I took that risk with my career.”
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