The US government spent $30bn developing the Covid vaccine. So how can Moderna plan to charge $110 a jab?

Vaccines were built in part on government research and funding, but treatment won’t be free to Americans much longer

The era of free Covid vaccines in the US may be coming to an end, and pharmaceutical companies like Moderna are considering a price of $110 to $130 per jab, the Wall Street Journal reports. That’s more than four times the cost the government was paying for the treatments under federal contracts.

Throughout the pandemic, the federal government has spent more than $30bn incentivising the development, then securing the purchase and distribution, of coronavirus vaccines, effectively making them temporarily free at the point of treatment, according to a Kaiser Family Foundation (KFF) analysis.

However, Congress has not agreed on new funding to buy and distribute more vaccines, meaning treatment could shift to the commercial medical distribution system as soon as this fall, ABC News reports, especially if the Biden administration allows its recently renewed Covid public health emergency declaration to end.

The shift to commercial drug distribution, where only those with insurance would have easy access to the vaccine, has outraged critics, who argue the change is a gut-punch to US public health priorities.

“I find your decision particularly offensive given the fact that the vaccine was jointly developed in partnership with scientists from the National Institutes of Health (NIH), a US government agency that is funded by US taxpayers,” US senator Bernie Sanders wrote in a letter to the CEO of Moderna on Tuesday, noting the $1.7bln in research and development funding the company got from the federal government.

“In other words, you propose to make the vaccine unaffordable for the residents of this country who made the production of the vaccine possible,” he continued. “That is not acceptable.”

It may be unacceptable to some, but it’s legal under federal law.

Under a 1980 law, the Bayh-Dole Act, federal contractors are allowed to retain the intellectual property rights for inventions they develop with the help of federal funding, according to Scientific American.

The law allows the federal government “march-in rights” to exercise partial control of those inventions, which some have argued could be a way to create price controls on the vaccines, but Joe Biden said in 2020 he doesn’t embrace the use of march-in rights.

Instead, as John Douglass of the University of California Berkeley Center for Studies in Higher Education noted in a 2021 analysis, the Biden administration has opted for other ways to try and guarantee vaccine access, from mass federal contracts, to invoking the Defense Production Act to speed up the manufacturing of more doses. Mr Biden has previously said he doesn’t support the use of march-in rights, and called for legislation that allows the Department of Health and Human Services to set drug prices for innovations based on federally funded research, which so far hasn’t come to pass.

Taken together, the end of the federal vaccine buying regime and inaction from Congress will lead to a commercial system that “could be a cost barrier for the uninsured and underinsured, who have no guaranteed mechanism for receiving COVID-19 (or any) vaccines once federal supplies are depleted,” according to KFF.

“This leaves the nation stuck in a cycle of panic and neglect,” the Washington Post editorial board argued last week.

Noubar Afeyan, co-founder and board chair of Moderna, defended the ongoing shift to commercialisation.

"We agree vaccines ought to be free. Governments ought to purchase them to prevent disease. That’s very different than [the idea that] people ought to innovate and come up with more effective, more programmable approaches, and essentially give them away," he told Yahoo Finance on Tuesday.

"I think it’s a hard argument to make in value-based pricing to say that vaccines ought to be priced at 10 cents ... That, I think, comes not from the economic argument, that comes from the public health argument," he added.