Moderna CEO Bancel holds the line on COVID shot pricing at Senate hearing

Facing a flurry of lawmakers’ questions, Moderna CEO Stéphane Bancel refused to buckle under pressure at a contentious hearing of the Senate Committee on Health, Education, Labor and Pensions on Wednesday.

Instead, he defended his company’s proposed price hike on its mRNA-based COVID shot from around $20 to $130.

As for the reasons that the quadrupled price tag is merited, Bancel spoke to the increased risk and complexity of the private market and the uncertainty of seasonal vaccine businesses. Plus, he said that Moderna has already returned some $2.9 billion to the U.S. by discounting its shot when the government procured pandemic supplies.

In further justifying his company’s planned pricing move, Bancel pointed to the changes Moderna’s business will have to endure in the coming months.

“In the pandemic market, we had one customer: the U.S. government,” he said. “In the endemic market, we’re going to have 10,000.”

Moderna expects to see a whopping 90% reduction in demand for the shot once the market transitions to a private model later this year, he added.

And while the government took the risk for wasted doses, in the endemic market, “Moderna will have to take that risk and that cost," the CEO said.

Bancel’s comments came at a hearing of the Senate HELP Committee titled “Taxpayers paid billions for it: Why would Moderna consider quadrupling the price of the COVID vaccine.”

Senator Bernie Sanders opened the hearing by suggesting Moderna’s price hike could put the shot out of reach for many people living in the U.S. To that point, Moderna has promised it will make sure people in the U.S. retain access to the company’s COVID-19 vaccines “regardless of ability to pay.” In fact, Moderna made its access pledge in February on the same day Sanders invited Bancel to testify. 

While Republicans largely came to Bancel’s defense at the hearing, lawmakers across party lines questioned why such a steep markup was necessary.

Another major issue at play during the hearing was the provenance of Moderna’s vaccine—and whether the National Institutes of Health deserves a co-credit.

“While Moderna may wish to rewrite history, it is widely acknowledged that both Moderna and the NIH created this vaccine together,” Sen. Bernie Sanders said.

This view was echoed by an expert witness during the panel’s second hearing, as well. Christopher J. Morten, Ph.D., J.D., an associate clinical professor of law at Columbia Law School, argued that Moderna repeatedly exaggerated its own contributions to the vaccine—and downplayed those of the NIH. He contended that if Moderna were allowed to go through with its price hike, it would set a dangerous precedent.

Still, many Republican senators, including Louisiana’s Bill Cassidy, warned against the potential of the hearing to send a “hostile signal” to other prospective companies who might enter future public-private partnerships with the U.S. government.

“This is more like a show trial in a public shaming than a fact-finding mission, and it should be the goal of this committee to first fact find before we attempt to hold someone guilty,” he said. 

Analysts have long figured that 2023 would be a challenging year for pandemic players like Moderna as COVID revenues slump alongside earnings. In fact, fellow mRNA player BioNTech last year suggested it would move away from proving sales guidance on its COVID-19 vaccine thanks to the inherent uncertainty around the endemic market shift. 

Ultimately, the exact timing of that commercial evolution—which could come as early as this summer—depends on myriad factors, such as the federal governments' remaining supply of vaccines or concerns over public interest in further shots.