Moderna to price its COVID vaccine at $130, as cost shifts to private sector
At a Senate hearing, Moderna CEO defended the price hike as the company anticipates added costs from shifting to a 10-dose vial to single doses as requested by pharmacies and doctors.
Demand for COVID-19 vaccines has dropped significantly as the public health emergency is set to end on May 11. Insurers and employers can expect sticker shock as the cost shifts from the federal government to the private sector.
The cost of the Moderna vaccine is expected to quadruple to $130 a dose when it enters the commercial market later this year. The federal government paid $26 per dose for the same vaccine during the pandemic. Rival manufacturer Pfizer has indicated that it also plans to sell its vaccine for the same price on the open market.
Moderna CEO Stéphane Bancel defended the steep price increase in testimony before the Senate Committee on Health, Education, Labor and Pensions on Wednesday. The company anticipates increased costs as it takes over distribution from the government.
Moderna also expects added costs from shifting from a 10-dose vial to single doses or pre-filled syringes, as requested by pharmacies and doctors.
Related: The U.S. health care system, post-COVID emergency: 4 key changes
In addition, the company expects a 90% decrease in demand with an uncertain forecast for doses in the fall, compared to the millions of doses ordered by the government that helped guarantee revenue. It also will incur costs for unused or expired doses, which is currently borne by the government.
Committee Chair Sen. Bernie Sanders, I-Vt., was skeptical. “Some of us have a hard time understanding how a company that made $21 billion in profit now comes before the public and says, ‘Oh by the way, we want to quadruple prices,’” he said.
The list price of the vaccine is only the starting point for negotiations, said Richard Hughes, a partner in the law firm Epstein Becker Green and the former Vice President, Public Policy at Moderna.
“No American who is not a health insurance company is going to see a $130 price tag for this vaccine,” he said. “The government will continue to receive a very low price, and companies do negotiate with payers.”
Moderna has said it is still in negotiations and is waiting for the U.S. Food and Drug Administration to determine which formula will be used for the fall booster season. That will be what the company focuses on producing through the summer and predicting how much to make.
Demand for vaccines has declined sharply this year because of built-up product inventories around the world and increased population immunity from high rates of vaccination and previous infections.