Source : 'The Pink Sheet'
Reports that Moderna, Inc. is planning to price its COVID-19 vaccine at $50 to $60 per course is raising concern that the US may not get a fair return on the nearly $1bn invested by American taxpayers in the product, which is being co-developed with the US National Institute of Allergy and Infectious Diseases.
The price being floated for Moderna’s mRNA-1273 is higher than the $39 per course that the US will pay for initial doses of Pfizer Inc.’s COVID-19 vaccine, and Pfizer is not taking any upfront government support for its product. ("Pfizers GoItAlone Approach Nets 195bn COVID Vaccine Order From US Government" "Pink Sheet" )
Trump administration officials have repeatedly said that they expect to pay less on a per vaccine basis when the government has invested in the product’s research, development or manufacturing. ("Manufacturing Pace Is Key For COVID-19 Vaccine Candidates Hoping To Jump To Warp Speed" "Pink Sheet" )
Government leaders also said they expect the US will get a better deal on the vaccine than other countries if Americans provided taxpayer funding.
“When we are doing contracting for acquisitions, we seek consideration to the US government for our previous investment, and it’s more than just a dollar-per-dollar investment, it is also the cost of capital because the US government took the risk to make that investment,” Acting Biomedical Advanced Research and Development Authority Director Gary Disbrow told Congress in early July.
Lower drug pricing advocates plan to try and hold government officials to these claims. “If we land at $50-60 per course for mRNA-1273 and that is the same for the US and other high income countries, either Disbrow was not being truthful, or the US government attempt at seeking consideration for its investment was a failure,” said Steve Knievel of Public Citizen’s Access to Medicines program.
Even if the administration can push Moderna’s pricing down for direct government purchases, it likely doesn’t have any leverage to do this for other purchasers in the country, pricing experts say, and there’s a good chance the private market will be responsible for some portion of COVID-19 purchases and distribution given the number of doses the entire country will require.
“We don’t have a precedent for government purchasing setting prices in the private market, and I don’t expect us to create the mechanism for that to happen in the timeframe of a vaccine deployment. Absent a legislative change, current pharmaceutical market dynamics, where [pharmacy benefit managers] may attempt to negotiate lower prices by pitting vaccine manufacturers against each, are likely to prevail, said Sean Dickinson, the director of health policy at West Health Policy Center.
This means in some cases even government payers like Medicare may be forced to reimburse pharmacies and physicians at a higher price than what the government pays for direct purchases, Dickinson said. He said this highlights the need for pricing reforms like government negotiations of prices for Medicare or domestic reference pricing, which would cap drug launch prices in line with historical analogues.
Some financial analysts believe Moderna will be forced to lower the price point, however.
A 28 July analyst note from BMO Capital Markerts modeled $44 per treatment course of mRNA-1273, despite the media reports of a potential $50-$60 price. A 29 July note from SVP Leerkink said they expect pricing to be similar to Pfizer’s $39 per course.
Moderna would not confirm the media reports. It said the company is “having discussions with a number of governments and governmental entities about potential supply of mRNA-1273. These discussions are private and as such we cannot comment, given the confidential nature of the discussions and contracts.”
HHS also refused to say whether the government will try and get Moderna down to a lower price than Pfizer.
“Each private sector partner involved with Operation Warp Speed has negotiated the terms of their own agreement, and at this time, vaccine pricing has not been determined,” a senior administration official said.
Both Moderna and Pfizer have said they expect to profit off their COVID-19 vaccines in contrast to some companies who have committed to non-profit pricing, at least during the height of the global pandemic. ("Pfizer Lays Out Multi-Phase COVID-19 Vaccine Commercial Strategy" "Scrip" )
That’s left them particularly vulnerable to criticism from advocates for lower drug pricing.
“It’s brazen and disgraceful that Moderna plans to take advantage of a tragedy. Moderna priced its vaccine to reap huge profits on a drug Americans helped develop and desperately need,” said Ben Wakana, the executive director of Patients For Affordable Drugs. “The last few weeks reveal a pattern of drug corporations outpricing one another in a race to maximize profits off a pandemic.”
By Sarah Karlin-Smith