Biden administration plans to shift COVID-19 vaccine, treatment costs to insurers, patients

Consumers and insurers will pay for COVID-19 vaccinations and treatments under a policy change from the Biden administration.

Shifting to the commercial market is expected to take months, a spokesman for the U.S. Department of Health and Human Services says. The agency plans to meet on Aug. 30 with representatives from drugmakers, pharmacies and state health departments to discuss the transition.

“We’ve known at some point we’d need to move over into the commercial market, and we’re approaching that time now,” says Dawn O’Connell, assistant HHS secretary for preparedness and response. “We don’t want to do it by fiat.”

The change presents several challenges, such as how to make shots and treatments available to the roughly 30 million people without insurance coverage. The federal government has been purchasing vaccines and treatments and making them available at no cost during the pandemic.

“There are issues of reimbursement, equitable access to vaccines and treatment, and distribution that need to be resolved,” says Anne McDonald Pritchett, senior vice president of PhRMA.

The change represents billions of dollars in potential profits for pharmaceutical companies such as Moderna, Pfizer and its partner, BioNTech SE. Pfizer reported $8.1 billion in global sales during the second quarter for its COVID-19 treatment, Paxlovid. As of February, companies including Pfizer and Moderna had reported at least $79 billion in combined global sales of COVID-19 vaccines and treatments for 2021, according to a Wall Street Journal review of earnings reports.

The administration had requested as much as $30 billion from Congress for antivirals, testing and shots against future variants, among other measures. Republicans say no new money should be allocated until existing relief funding was spent. As of mid-February, no money was left in the HHS’s public-health and social-services emergency fund for health care providers. The administration in August stopped supplying monoclonal antibody treatments. Eli Lilly & Co. has shifted to commercial sales of its COVID-19 monoclonal antibody treatment to states, hospitals and other health care providers. The administration already has signed purchase agreements for updated vaccine doses for the fall.

Switching vaccine purchasing to the commercial market would mean that each insurer and pharmacy benefit manager would negotiate with drug manufacturers, and prices likely would be higher than what the federal government has paid, says Larry Levitt, executive vice president for health policy for the Kaiser Family Foundation.

Related: Employees hospitalized with COVID cost employers $30,000+ over 6 months

Insurers would have to start paying for the vaccines, he says, likely raising premiums. “Without the government purchasing vaccine doses in advance, the U.S. may fall behind other countries in getting quick access to boosters and new variant-specific vaccines,” Leavitt says.

Other challenges include the timetable for which drug or vaccine manufacturers move into the commercial market. Also, Medicare and Medicaid, don’t cover antivirals, because they are approved only under an emergency-use authorization. “We want to make sure everyone who needs access gets access,” O’Connell says.