COVID-19 Vaccine Pricing: Are the Manufacturers Signaling their Intent?

The Wall Street Journal is reporting that vaccine manufacturers are signaling the price for coronavirus vaccines, with prices ranging from as low as $4 per dose to greater than $70 for a regimen.  In their Q2 review Wednesday morning, Moderna says its vaccine is commanding a relatively high price, with small supply deals being struck at a rate of $32 to $37 per dose. Larger volume deals will come at a discount to that. That would put the high-end price at up to $32 billion to $37 billion per billion doses, with a world clamoring for billions of doses to quell the pandemic.

Moderna rationalized its price with an internal cost-effectiveness model using a $50,000 per QALY willingness-to-pay threshold. The Institute for Clinical and Economic Review (ICER) has a different view, stating that cost-effectiveness isn’t necessarily the “correct” framework for thinking about the price of a COVID-19 vaccine, particularly one that was largely funded by the government. ICER has outlined multiple approaches to pricing in a pandemic in their July White Paper and in a series of webinars.

In other news, Moderna has failed to comply with disclosure requirements and publicly report development costs of a vaccine that is being funded by the Biomedical Advanced Research and Development Authority (BARDA), who awarded the company $955 million to develop a vaccine based on its mRNA technology and jointly invented with the National Institutes of Health. Moderna’s approach may spur rebuke from critics who point out that Moderna has been heavily subsidized by the US government.

Moderna CEO Stéphane Bancel noted that their vaccine “will be priced well below value, given the pandemic.” And he added that the price is in line with what any company would charge for an “innovative vaccine.” Bancel said that after the current outbreak has subsided, they will reprice their vaccine with more traditional pricing strategies suggesting that the company will increase the price.

J&J has outlined a deal with the US government to produce 100 million doses of their vaccine at around $10/dose, and state that this is their “not-for-profit” pricing.

Pfizer, in contrast, is getting $19.50 a dose, or $39 for a full course, in their US contract for 100 million doses. And that would be the base price Pfizer expects to charge in all of its contracts.

(Sources:  Carroll J, Endpoint News, August 5, 2020;  The Motley Fool, August 5, 2020;  Silverman E, STAT Pharmalot, August 4, 2020;  ICER, July 2, 2020; Loftus P, WSJ, August 5, 2020)