Narrated by Zain Rizvi, Research Director at Public Citizen
Millions of Americans have benefitted from a revolutionary breakthrough in modern medicine — the so-called Moderna COVID vaccine.
But that vaccine is also the perfect encapsulation of our dysfunctional health care system — and what we can do to fix it. Let me explain.
Moderna has announced plans to jack up the price of the COVID vaccine from $26 to $130, an increase of over 400%, selling it for many, many times the cost of production. Each dose costs about $2.85 to make. The company was already expecting to bring in $18 billion in revenue from the vaccine in 2022. But Moderna CEO Stephane Bancel, who became a COVID billionaire, wants to raise prices again.
Now you might say, Moderna’s entitled to charge whatever it wants : after all, a scrappy start-up that nobody had heard of delivered a lifesaving vaccine that changed the course of the pandemic. That’s certainly Moderna’s argument.
But what if Moderna isn’t telling you the full story?
The truth is the vaccine was never just the Moderna vaccine.
When COVID-19 hit, the US government sprang into action. The National Institutes of Health worked hand-in-hand with Moderna to create the vaccine, calling it from the start what it really is: the “NIH-Moderna vaccine.” Taxpayers spent more than a billion dollars advancing the development of the vaccine.
Now, the pharmaceutical company is raising the price of this NIH-Moderna vaccine to enrich already wealthy executives.
How do they get away with using publicly-funded innovation to fuel corporate greed?
It’s a “common sense” idea that the government doesn’t innovate and the private sector moves fast and innovates.
But the National Institutes of Health alone spends more than $40 billion a year advancing biomedical research and development that sets the foundation for new technology. Moderna is a great example of this. The major breakthroughs behind the NIH-Moderna coronavirus vaccine–from the invention of the stabilized spike protein to the underlying mRNA vaccine technology–were all heavily funded by the US government.
From its earliest days, Moderna has benefited immensely from the public sector, receiving funding from the federal government reportedly since it only had 3 employees.
But the private sector often succeeds at profiting astronomically off of publicly funded innovation because the public sector gives away technology and funding without asking anything in return. The federal government just hands this stuff out. They’re the most one-sided contracts I’ve ever seen.
And what have the results of exclusive corporate control been? To start, Moderna wildly overcharged countries for the vaccine and initially sold doses almost exclusively to rich countries, frustrating the Biden administration and hurting efforts to stop the global pandemic. Moderna also refused to share the vaccine recipe with South African scientists working to scale up production. And now Moderna is raising prices.
Former head of the CDC, Dr. Tom Frieden, said it best: “They are behaving as if they have absolutely no responsibility beyond maximizing the return on investment.”
To add insult to injury, Moderna barely even acknowledges the role of the federal government in its success–you may have noticed Moderna is not calling it the “NIH-Moderna vaccine.” In fact, Moderna does not even have permission to use one of the key government-owned technologies behind the vaccine. This gives the government on-going leverage to demand better behavior.
The Biden administration should use it. The administration should say enough is enough, and use all the leverage it has to limit price-gouging. Moving forward, the Biden administration can require that companies that benefit from public dollars act in the public interest. This should include requirements to set reasonable prices, and promote equitable global access. Public dollars should mean public goods.
It would be better for everyone — well, except maybe a handful of Moderna executives — if your tax dollars funded reliable healthcare, not corporate greed.