Moderna CEO: 400% price hike on Covid vaccine “consistent with the value” | Hacker News Reader

Moderna CEO: 400% price hike on Covid vaccine “consistent with the value”

arstechnica.com

60 pointsBender51 comments

This is why vaccine development and pharmaceuticals in general should be a public good, owned by the public sector, priced as a public good.

This will greatly decrease R+D spending on disruptive new pharmaceutical drugs.

The Covid vaccines were developed and deployed by private industry.

Oxford/AstraZeneca Covid vaccine research ‘was 97% publicly funded’ - https://www.theguardian.com/science/2021/apr/15/oxfordastraz...

It would be nice to see a similar analysis for Moderna's vaccine, but of course the companies like to keep their cards close to their chest.

There's a difference between funding research and funding development and manufacturing. No company would develop and manufacture a drug if they wouldn't make profit of it, no matter how much related research was or wasn't done using public funding.

> There's a difference between funding research and funding development and manufacturing.

The 97% figure from the study is for research and development. As for manufacturing, they would recoup that from selling the vaccine at/slightly above manufacturing cost. As the article I linked states, they didn't like that deal.

And the next time they come out with some drug or vaccine, will we also just assume most of the funds were private, until proven otherwise? Why not assume the opposite, and let them prove they're not fleecing us? Are they so trustworthy and benevolent?

Then the company receiving public finds for R&D should grand licenses royality free for anyone in that country/union to manufacture the vaccine.

You're a Chinese company that wants to produce vaccines? Estabilsh a factory in the country of origin, obtain a license from the original manufacturer and start producing.

Somehow, I doubt a bunch of incredibly motivated pharmaceutical researchers are going to be turned out into the streets, and stop doing research because a bunch of yield farmers don't have an instant IWIN moneyprinter anymore.

lol what? the Covid vaccines were funded by the US goverment (and others).

As customers of the vaccine to deliver to their citizenry. You might as well say Microsoft is funded by the US government (and others) because they buy Windows and Office licenses: technically true and also misleading because it’s revenue for a product they sold them for a profit. Those profits fund further R&D into new products, some of which will be sold on the private market and some of which will be sold to governments.

Your analogy doesn't hold up. Initial R&D of Covid vaccines was largely funded by taxpayers in addition to advance purchase guarantees and limitation of legal liability to eliminate any risk whatsoever. After the public assumed any and all risk, profits are now going in private pockets. Your analogy is misleading and dishonest.

> Since 2006, Congress has appropriated hundreds of millions of dollars that BARDA used to develop the scientific infrastructure to produce vaccines in response to the threat of pandemic flu. Thus, the basic research undergirding the COVID-19 vaccines was largely publicly supported.

> Recent estimates indicate that the government spent more than $900 million dollars supporting non-clinical studies and research to accelerate movement of candidate vaccines into clinical trials at companies such as Johnson and Johnson, Sanofi, Merck, and Moderna.

> Johnson and Johnson, Moderna, Sanofi, and AstraZeneca together are estimated to have received more than $2.7 billion from the federal government to cover expenses related to human trials. The bulk of money was directed at Phase III trials, which compare new treatments against standard care and where most human test costs are incurred.

https://www.healthaffairs.org/do/10.1377/forefront.20210512....

https://www.fiercepharma.com/pharma/after-nearly-1b-research...

The risk that you’re talking about is the “risk” of these products not being developed and working when we needed them. We probably would have been in lockdown mode for another year if we hadn’t.

Yes, they received grants. Yes also that they developed the finished products which were then purchased at a discounted rate and they received Emergency Use Audits and accelerated review processes to put them out there. Pretty much anyone that’s wanted to get their COVID vaccines and boosters has gotten them and they didn’t have to pay out of pocket at the time of injection. J&J, Moderna, Sanofi and AstraZeneca are now free to pursue other opportunities. Why shouldn’t they make a profit?

Why should they be allowed to profiteer off of life-saving vaccines in the middle of a pandemic? If any other business price gouged essential supplies to the degree these pharmaceutical companies are doing, they would likely end up in prison.

If there is a credible risk of vaccines not being developed, as you say, perhaps it's time to think about either: a) nationalizing the key players in pharmaceutical industry, or b) introducing laws (if none already exist) that allow governments to compel these companies to allocate resources to work on specific projects.

Vaccines are not a luxury item sold on a free market and we shouldn't have to rely on profit-seeking companies to develop and appropriately distribute them in the most beneficial way, it's simply incompatible with what's best for humanity during a pandemic. We've seen this play out, US & EU countries created massive stockpiles of vaccines because they had dozens of billions of taxpayer money to pay for extortionate prices while poorer countries still had 1% vaccination rates.

This has lead to hundreds of millions (!) of doses of Covid vaccines expiring and being wasted. The side effect of this is increased likelihood of mutations that has the potential to harm everyone.

> Why should they be allowed to profiteer off of life-saving vaccines in the middle of a pandemic? If any other business price gouged essential supplies to the degree these pharmaceutical companies are doing, they would likely end up in prison.

Endemic. Pandemic implies an end. They also make money off flu vaccines and measles vaccines. What’s the difference? That they can make money at all doing it is why they continue to do so and why governments don’t have to try and figure out supply and demand themselves.

> If there is a credible risk of vaccines not being developed, as you say, perhaps it's time to think about either: a) nationalizing the key players in pharmaceutical industry, or b) introducing laws (if none already exist) that allow governments to compel these companies to allocate resources to work on specific projects.

It’s not just about developing vaccines in the middle of pandemics; it’s about having an incentive to develop every type of vaccine we could possibly need, eventually, finding new applications for vaccine technology and improving the development and manufacturing processes. You need smart people, smart people want money and not just the thanks of their neighbors, ergo profits. Sure the government is a cushy job, but private sector pays more and as long as there’s profits, the “key players” as you call them aren’t limited to the ones that exist today.

> Vaccines are not a luxury item sold on a free market

I don’t know about “luxury” but they are sold on a free market.

> and we shouldn't have to rely on profit-seeking companies to develop and appropriately distribute them in the most beneficial way, it's simply incompatible with what's best for humanity during a pandemic.

The COVID vaccines set a record for research, development and dispersal and those profit seeking corporations pulled that off both because they could and they had an incentive to.

> We've seen this play out, US & EU countries created massive stockpiles of vaccines because they had dozens of billions of taxpayer money to pay for extortionate prices while poorer countries still had 1% vaccination rates.

Would you feel better about the US, UK, EU, and Israel putting themselves at the front of the line as long as they had nationalized their pharmaceuticals companies first?

Only because it was underwritten by government balance sheet.

When was the last time USPS wowed you with their innovations and speed?

USPS seemed fine before the last administration's Postmaster General took power and started systemic obstruction. I had cheap and easy priority mail access for whatever I needed and it went anywhere in the US within about 3 days. First Class Letters almost always arrived in the stated window. There were improvements to visibility with a daily email announcing what would be arriving for the day. Since DeJoy took over, I rarely use USPS for personal package sending because I cannot trust that the packages will arrive in the stated time period. I pay roughly 1.5x to 2x with USPS Priority costs for other services, but I don't worry that my mail will simply disappear into the void.

when was the last time the USPS didn't have to pre-fund their pension

They did a great job distributing rapid tests. Easy website and everything.

Coming from a European country the USPS reliability and speed of delivery is impressive, you have no idea how good you have it for a country of this size. Teller service at the USPS now that is pretty terrible true, but if there is no innovation it’s because congress won’t let it. Why isn’t the USPS offering banking services for example like other postal services do?

It varies wildly with region. Sometimes delivery is not even attempted and a 90 minute counter service wait is literally the only way to get tour package (Harlem).

Banking and payment monopolies are very important for the US political system. As a last resort, banks want to be able to de-bank grass roots political opposition and giving all citizens a post office bank account would make this impossible without violating the first amendment. Thats why the US doesn't have this while western countries with stricter political speech codes do.

Because a post office’s core competence is mail delivery and not banking. If you want bank services go to a bank. In the US at least it feels like there are too many bank branches with more being built each year.

Yeah. Or Ma Bell

Just today!

Very consistently, one of the few delivery services that can consistently deliver packages to me. And also at a great price!

Amazon is a close second, but they're vertically integrated so that's not really a good comparison.

FedEx and DHL are consistently terrible experiences.

The vaccines are worth some multiple of the new price. Like it would be a good idea for the government to keep buying them for everybody, it would be a good deal.

And of course, it's at least possible that their costs to keep vaccines available are higher when people aren't really getting them (US booster uptake is pretty middling, even among older people that get even more benefit out of them).

Can we say the same thing about social media companies ?

I would also suggest that 'owned by public sector' does not mean 'public good'.

Even when a private corporation influenced/directed/controlled by federal authorities -- it is problematic.

I do not know of a political system that can effectively check federal government so that it stays for public good.

Money-sponsored or various threatened-by-force election models are not effective at checking that premise.

> Can we say the same thing about social media companies?

Gotta be "good" to be a "public good."

In my country, many of the state-controlled public services (e.g., electricity, water and sewage) are very expensive due to mismanagement. Others, like public healthcare are mediocre (don't scale well), albeit costly. Many of these entities suffer from being exposed to political influence.

This being the crux of the problem. Obtaining the benefit of state owned/controlled operations for such things without allowing them to be ruined by constant political interference in sync with the routine electoral cycles. A public health system or sewage or electricity is a multi decade resource of benefit to several generations of citizens… but politicians tend to think about the next election not their old age and future generations needs. It really requires and active and engaged citizenry to make proper operation a priority over the normal sort of political pandering.

Depends on the state, sort of like the quality of private companies vary and if you’ve ever lived in a part of you’re own country where the grocery stores are crap and later you move and their very competitive and a comparative delight. However, one has to experience the difference themselves to understand this fact I believe. There are a huge multitude of factors at play.

Many of us (me included for most of my life, hell maybe I’m doing it now), tend to over extrapolate how much our own experience is the experience everywhere and that what we see must be fitting some logical rule or trend. Reality is annoyingly more complex than we like.

> 'owned by public sector' does not mean 'public good' What does mean public good then?

I believe you're misreading GP's comment and playing on words. "owned by public sector" doesn't have to mean "being run by people elected through general elections". You seem to refer to federal government so probably you're referring to US government and how your opinion is that it is inherently bad. That's another debate i don't have anything to say on (not US myself) and i believe you have a bigger problem if you don't trust your government. Now tons of "public sector" enterprises can well enough be run in relatively closed loop. The solution is quite easy: have dedicated taxes for dedicated such enterprises, instead of all the taxes going into a general budget at the hand of general politics. This is how public healthcare, pension or stuff like water used to work in eg france, before it started to get teared into pieces. They are self-funded basically by people paying for the service, but since we have realized basically everyone needs it, paying is mandatory, and the amount you pay is proportional to your salary: the so-called salary-contributions and company-contributions.

>Can we say the same thing about social media companies ?

Good god no. One of the benefits of the Twitter-Musk saga is that it proved that the feds really were meddling quite a bit with social media companies requesting censorship. You want to give them the keys entirely?

Why don’t any governments get in that business then? They could distribute it locally but sell the vaccines and pharmaceuticals they develop to foreign countries and make a bunch of profit.

Lol. Because there's hardly any socialist government out there. Basically the same kind of guys that are running these corps are editing all these globalization and privatization international treaties.

Vaccine and pharmaceuticals research are already mostly publicly funded. But the profits are privatized.

* Oxford/AstraZeneca Covid vaccine research ‘was 97% publicly funded’: https://www.theguardian.com/science/2021/apr/15/oxfordastraz...

* (US Specific) Most New Molecular Entities (NME) approved by the FDA are derived from public research (I dont know exact numbers)

I guess pharmaceutical prices and “value” are inversely related to utility, then. At $26 per dose, two doses prevented well over 90% of Covid cases. At the new higher price, even the bivalent vaccine seems to prevent rather fewer cases [0].

Maybe Moderna can sell $1000 doses of saline solution!

[0] https://www.medrxiv.org/content/10.1101/2022.12.17.22283625v... gives about 30% effectiveness for the bivalent vaccine (read it for what this means). https://www.cdc.gov/mmwr/volumes/71/wr/pdfs/mm7148e1-H.pdf gives IMO really quite embarrassingly poor results for vaccination of any sort.

edit: at least the relative vaccine effectiveness table towards the end of the MMWR report consists of entirely positive numbers.

Reminder that these vaccines were large majority tax-payer funded, and both Moderna and Pfizer have legal immunity to any ill effects caused by the vaccine [1]

They are legally immune to being sued due to damages caused by the vaccine. In developing the vaccine, they also somehow got vaccinated against our legal system.

This should have come with strict pricing rules and other strings in order to receive its benefits. Instead, if you are working on problems relating to certain contagions, you too can be liability immune — but just until 2024 after Moderna and Pfizer have both made absurd amounts of money and paid back the politicians who made it happen. It is laughable policy only a very short sighted population and leadership would think is smart.

That price will keep hiking and now we have super-powered organizations highly incentivized for plagues only they can cure. I’m sure they will leave billions / trillions on the table and be benevolent about this.

[1] https://aspr.hhs.gov/legal/PREPact/Pages/default.aspx

Everyone acts like all these wonders arise from private innovation. They discount the decades of public investment that brought us to the point that a company could develop a specific mRNA vaccine. From the public roads and public education to the trillions spent over the past 50 years to bring computer and bio technologies to their current point, it’s public investment that makes it all possible.

Our capitalist system works by private investors capturing most of the value of public investment. The dreaded Chomsky points out that the US socializes the risk and privatizes the profit.

But, here I am, talking trash about pirates in a barroom on the Barbary Coast! Let me stop before I lose a limb…

What value do you place on a delivered dose of vaccine?

Because the recipient profits the amount you get if you subtract the price of purchase and administration from that value.

So like say the value is $100. When the vaccine was $26, the recipient and government got about $74 of value for each shot delivered and Moderna got $26 minus the cost of developing and producing the vaccine. Who's getting most of the value there?

If you don't think the vaccine provides $100 of value, then the controversy here is that they've priced it outside of the range where it will do any good. Of course sensible parties like insurance companies know the value is much more than $100 and will pay for it.

In terms of how much benefit a company provides, Moderna and Pfizer vaccines literally provided trillions of dollars of benefit as it saved a bunch of lives and enabled economies to restart.

I want these types of companies to make obscene amounts of money. I want entrepreneurs and venture capitalists to fund these companies thinking they can make obscene amounts of money from them. I want bright young people to dream of developing the next vaccine and becoming a billionaire instead of dreaming of writing the next chat app and becoming a billionaire.

Then when the next pandemic breaks out, we can do even more amazing things to save lives and bring it under control.

Wait, did pfizer really develop the vaccine? Iirc, it was BioNTech, and Pfizer is just the exculsive distributor in the US.

There is a lot that goes into distribution.

It’s not just scping your git repository to some machines on AWS. It’s developing the infrastructure, processes, tooling, etc. to create and package hundreds of millions of doses of a highly specialized and advanced drug with extraordinarily high reliability. If something does wrong, people will be harmed.

It’s also about conducting clinical trials properly and working with regulators to get approval for your drug. Probably a lot more happening behind the scenes I haven’t mentioned. All of this effort takes hundreds of thousands of person-hours w/ highly specialized expertise.

https://www.pfizer.com/news/press-release/press-release-deta...

Disclaimer: I have a family member who works at Pfizer (but none of this info is from them).

It was BioNTech who developed it (as a German I'm annoyed to hear this name so little), but Pfizer has played a big role in getting it produced and distributed.

Don’t I pay for pandemic prevention with my taxes? Where’s that money going?

Being prepared, at the capitalist-society level, for a future possible pandemic wasn't profitable, so it wasn't done.

It will continue to be like this until laws change.

Purely out of my righteous indignation, I hereby BOYCOTT the Moderna vaccine—Nay not just their vaccine but ALL vaccines! This, because of their outrageous corporate price gouging practices. Yep that’s the reason.

I bet that we have reached close to maximum saturation of folks getting boosted. Less and less people will be getting these shots, but since they have a taste for the money that was pouring in, they can jack up the price to make up for lack of sales.

>400% price hike on Covid vaccine

That's already up to 0.1 on the Shkreli scale, and rising.

It seems to me he raising the price because he knows our current president will pay it. I’m sure Trump would have pounced at the opportunity to deny any government subsidies “because the price is too high”.

I wonder what Dolly Parton thinks?

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