In Congressional testimony Wednesday, Moderna CEO Stéphane Bancel unabashedly defended the company's plans to raise the US list price of its COVID-19 vaccines by more than 400 percent—despite creating the vaccine in partnership with the National Institutes of Health, receiving $1.7 billion in federal grant money for clinical development, and making roughly $36 billion from worldwide sales.

Bancel appeared this morning before the Senate's Health, Education, Labor, and Pensions committee, chaired by Sen. Bernie Sanders (I-Vt.), who has long railed at the pharmaceutical price gouging in the US and pushed from policy reforms. After thanking Bancel for agreeing to testify, Sanders didn't pull any punches. He accused Moderna of "profiteering" and sharing in the "unprecedented level of corporate greed" seen in the pharmaceutical industry generally.

Sanders contrasted a recent survey finding that 37 percent of Americans can't afford their prescription drugs to the billions of dollars in profits reaped by drug companies. He noted several times that Bancel became a billionaire overnight amid the pandemic. Bancel is now estimated to be worth over $4 billion, Sanders added.

Discount

But mainly, Sanders aimed to convince Bancel to reconsider quadrupling the price of the company's life-saving vaccine, which costs about $3 per dose to make. Amid the pandemic, the federal government spent around $10 billion procuring doses that were freely provided to Americans. Early doses were priced between $15 to $16, while the government paid a little over $26 for the updated booster shots. When federal supplies run out later this year and the vaccines move to the commercial market, Moderna will set the list price of its vaccine at $130.

"This vaccine would not exist without NIH's partnership and expertise, and the substantial investment of the taxpayers of this country," Sanders summarized. "And here is the thank you that the taxpayers of this country received from Moderna for that huge investment: They are thanking the taxpayers of the United States by proposing to quadruple the price of the COVID vaccine."

Sanders' criticisms and entreaties did not appear to move Bancel, who made no concessions and certainly no apologies for the planned price increase. Over the course of the two-hour hearing, Bancel dismissed the role that NIH scientists played in developing the vaccine while emphasizing that the company built up its platform before the pandemic with $3.8 billion in private investments.

When it came to the price Moderna charged the US government per dose, Bancel argued that the US government received a $2.9 billion discount on the vaccine's price.

"We were under no obligation to do so, but, recognizing the US government's investments, our company decided to provide the government with a discount," Bancel said.

While it's unclear what Moderna thought the actual price of the vaccines should have been, the US's "discount" doesn't appear to have been a long-term bargain for the country. While the US paid a little over $26 per dose for the updated boosters, the EU paid $25.50, despite not investing billions in early development and procurement.

“Totally insane”

As for the quadrupling of the US's discount price, Bancel argued that the simple bulk orders for the government were wholly different in nature than the messiness of the commercial market—and that messiness costs extra. During the pandemic, Moderna dealt with one customer (the government) that committed to paying for a set number of doses regardless of whether they made it into arms. And the company delivered those doses to a limited number of federal warehouses. Now, it will have thousands of customers, requiring the company to deal with complex distribution logistics, and to take on the financial risk of manufacturing more doses than are purchased. Moderna will also switch from selling multi-dose vials to single-dose vials, which it sees as more suited for the commercial market. "This is not the same product," Bancel argued, and the quadrupled price reflects that, he suggested.

The committee also needled Bancel about the company's financial assistance programs—which the company boasted would ensure that no American, insured or uninsured, would pay out of pocket for Moderna COVID vaccines going forward. While the company's announcement of this plan generated glowing headlines, the details of how it will work are nonexistent. Bancel acknowledged to the committee that the company has not worked out how the assistance programs will work in practice for uninsured people or how the company will negotiate prices with private insurers and other payers.

"We have no transparency in pricing; it is a totally insane situation," Sanders lamented.

With no ground gained, Sanders turned to one final plea in the hearing:

"The United States—the people in our country—pay the highest prices in the world for prescription drugs in general… will you at least tell us today that the price you are charging for the vaccine will be lower than what other countries around the world are paying? Or are, once again, we going to pay the highest prices?"

Bancel started to respond by noting that health care costs are different in each country before Sanders interrupted and directed him to provide a straight answer, to which Bancel replied: "I cannot say the price will be lower than other countries."