Moderna CEO Stephane Bancel defended the company’s plans on Wednesday to raise the price of its COVID-19 vaccine fivefold once it shifts into the hands of the private market after the COVID-19 public health emergency ends, telling lawmakers that the increased price comes as they expect to see a reduction in demand for the vaccines.
Bancel justified the price hike by noting that the company expects to see a 90% reduction in demand for the COVID-19 vaccine when it moves to the commercial market, along with increased costs to provide single-dose vials, compared to the 10-dose vials the company has provided for the government.
“On top of all this, we’re expecting a 90% reduction in demand,” Bancel said. “As you can see, we’re losing economies of scale.”
Moderna has indicated it plans to price its COVID-19 vaccines between $110 to $130 per dose, significantly more than the roughly $26 per dose the company has charged the government since last July per the latest contract.
Bancel noted that the company will have to expand its warehouse capabilities and absorb the costs of wasted doses, among other costs, when the COVID-19 vaccine is offloaded to the commercial market. In February, Moderna estimated that it will make roughly $5 billion in sales from COVID-19 vaccines, lower than the $18.4 billion in sales the company made last year from the vaccines.
The comments drew ire from Senate Health, Education, Labor and Pensions Committee Chairman Bernie Sanders (I-VT), who argued that any price increase would make the vaccine unaffordable for millions of people. Sanders highlighted the federal government’s $12 billion investment for Moderna to research, develop, and procure the COVID-19 vaccine during the pandemic.
“And here is the ‘thank you’ the taxpayers of this country received from Moderna for that huge investment: They are thanking the taxpayers of America by proposing to quadruple the price of the COVID vaccine,” said Sanders. “As soon as Moderna started to receive billions of dollars from the federal government, Mr. Bancel literally became a billionaire overnight and is now worth $4.7 billion.”
Top Republicans on the committee railed against Sanders’s attacks on Moderna, noting the company’s work to produce a vaccine quickly during the COVID-19 pandemic.
“It sends a hostile signal to future and prospective partners that Moderna is now being singled out for its decision to work more closely with the government,” Sen. Bill Cassidy (R-LA) said. “Sen. Sanders, I want to work with you. But not if the purpose of the hearing is to simply demonize capitalism. We should not hate the thought of a person or company making a profit, that we lose sight of the ideas and accomplishments their profit is rewarding.”
The company has promised to make vaccines available to people for free for those with or without insurance through a patient assistance program, though it’s unclear how it would work. Senators on the committee argued that the program needed to be easy to access.
The Biden administration has said it plans to let the COVID-19 public health emergency expire in May, which will set into motion the transition of the COVID-19 response to the private sector. The development of vaccines, testing, and treatments will shift out of the direct hands of the federal government as a result for the first time since the beginning of the pandemic.
Adults without health insurance will likely have to pay out-of-pocket for vaccines. Uninsured children will still be able to access COVID-19 vaccines for free through the Vaccines for Children program.
Roughly 81% of people in the United States have received at least one dose of a COVID-19 vaccine, according to the Centers for Disease Control and Prevention.