In the years before the pandemic, pharmaceutical companies had been abandoning vaccine development. It requires large research, testing, and manufacturing costs, and the market may be limited.
For Covid-19, however, the vaccine market spans the globe, and much of the manufacturing and development costs are subsidized by the government.
Operation Warp Speed last week invested $ 1.6 billion in a candidate Novavax vaccine. She said the United States “will own the 100 million doses of investigational vaccine” produced by the investigation. The Department of Health and Human Services also made it clear that if the vaccine were to be safe and effective, those 100 million doses would be provided “at no cost” to Americans.
That’s the first, and so far only, government guarantee of prices and dosages, even though it’s the sixth vaccine to receive funding from the U.S.
Representative Rosa DeLauro (D-Conn.), Chair of the House of Representatives appropriations health subcommittee, said she hopes “Congress will have to provide more supplemental credits to buy hundreds of millions of doses of vaccine once it is released. have developed. ” House appropriators are contacting HHS to determine how many doses are guaranteed under current contracts with vaccine manufacturers, she added.
An HHS spokesman offered some reassurance about the eventual costs, saying “one of the considerations in the price of the dose is any federal funding that was provided to develop the vaccine.” And he noted, as seen with Novavax, that “when the federal government pays for all the development and manufacture of a product, the federal government owns the manufactured doses with tax dollars.”
But she said the money that BARDA had previously invested in boosting vaccine manufacturing capacity did not include buying doses.
AstraZeneca and Johnson & Johnson, which together have received more than $ 1.5 billion from the United States government, said last month that they would develop their respective nonprofit vaccine candidates during the pandemic.
“Like everyone else, we will make it non-profit,” said AstraZeneca CEO Pascal Soriot. “This is what a successful and healthy pharmaceutical industry can do.”
But the companies’ warning that the vaccines would be offered nonprofit “during the pandemic” potentially sets a stage where if the outbreak is declared, companies could charge more, even if people need boosters or annual vaccinations to keep the virus. cornered.
When POLITICO was contacted, none of the companies was willing to offer more details on what they specifically mean by “non-profit.” That lack of detail leaves many wondering what to expect, if anything, especially given Pfizer’s stance.
Pfizer initially said at an industry press conference in late May that the price of its vaccine would be aligned with Johnson & Johnson and AstraZeneca. Pfizer CEO Albert Bourla said financial returns were not driving the vaccine’s work.
But then Bourla said at a Goldman Sachs conference in June that the vaccine would be priced in line with injections on the market for other conditions. Later that month, she said at a Milken Institute event that it would be manufactured and produced for profit.
Pfizer’s existing vaccines have contributed more than $ 20 billion since 2015.
The general lack of transparency about the initial contracts of the United States government with vaccine developers means that even Congress does not know if the doses of those vaccines are assured. Lawmakers also don’t know what the companies’ nonprofit promises mean, said a Hill staff member. That is important since the government will be a major buyer.
Senator Maggie Hassan (DN.H.) sent an email to POLITICO saying that the administration has been “remarkably silent about the actual terms of these deals and at what price the federal government would insure the doses.”
Even if vaccines are developed without profit, that doesn’t mean there is no cost. In fact, the costs could carry over to higher insurance premiums or deductibles, indirectly affecting consumers.
Advocates who have been pushing for lower drug prices fear that nonprofit pledges sound empty due to the billions of taxpayer dollars that have been invested in vaccine projects and the lack of transparency about what that developers are spending on their research, development, and manufacturing operations.
David Mitchell, a cancer patient who founded and directs nonprofit patients Patients for affordable medications, called the nonprofit promise “part of the allure offensive to rescue us from the coronavirus, but billions go from taxpayers to these companies. ” He predicted that American taxpayers will be forced to buy back the effective doses.
Kate Elder, vaccine policy adviser at Medecins Sans Frontieres, echoed Mitchell’s concerns, noting that what the US gets from the vaccines developed in these BARDA transactions may be unrelated to what is paid. in advance. She also said that the agreements between BARDA and the vaccine developers are confidential, so “no one knows if certain vaccine prices are included in them.”
Peter Maybarduk, director of Public Citizen, a nonprofit organization, questioned the promises: “What is a nonprofit price when the investment is covered by taxpayers and the invention is based on public funds?”
The non-governmental organization Knowledge Ecology International obtained redacted versions of some of the BARDA vaccine contracts in early July. In one version of J & J’s contract, at least, the government has limited its ability to intervene even if a vaccine developer charges an unreasonable price.
It is unclear how the government could intervene if a vaccine were overpriced. At a recent Senate hearing, NIH Director Francis Collins was questioned about the KEI documents, but said the Bayh-Dole Act is not intended to address unacceptable prices. That 1980 law includes a provision that allows the government to break a patent and bring cheaper alternatives to the market if it has invested significantly in developing a drug. But the provision has never been used.
