Taxpayer dollars is primarily why we have successful vaccines for fighting COVID-19. The government assumed the financial risk of development which allowed us to get the vaccines so quickly. The public is paying a huge chunk for research, development (R&D), and manufacturing. Congress appropriated nearly ten billion dollars to support development and manufacturing of COVID-19 diagnostics, treatments and vaccines.
Moderna was heavily funded by the U.S. government and private donations. They were given $2.5 billion for the development of the company’s vaccine and to purchase doses once approved. The industry directly builds on knowledge funded by the taxpayer.
Pfizer says they didn’t take any money to develop the vaccine, but their partner, Biontec, took $446 million dollars from the German government. Both Pfizer and Moderna used the National Institutes of Health (NIH) patented messenger RNA technology to create their vaccines. The U.S. committed to buying hundreds of millions of Pfizer-Biontec vaccines in advance with a price tag of $1.9 billion. Pfizer is being paid handsomely to produce the vaccine, and, it’s been estimated to have made over $900 million in profit in just the first quarter of 2021. And, even greater profit in the second quarter.
The U.S. invested $20 billion dollars in pharmaceutical companies to quickly move forward on clinical trials, development and production capabilities. Moderna had never produced an approved drug, so the government paid for it’s production capability and virtually “de-risked” the enterprise for making the vaccines by committing to buy their vaccines when brought to market.
NIH investment contributed to “every drug” that was developed in the U.S. from 2010-2019. By investing in the basic science and development, NIH encourages innovation for private pharmaceutical companies. The NIH is the single largest medical research agency in the world. Once developed and ready for commercialization, the NIH turns the intellectual property (IP) over to the drug companies with seemingly no strings attached. The pharmaceutical company can determine any price they want. Corporations price to maximize revenue, not according to R&D costs. NIH research is extremely productive and should be expanded so that health, rather than profit, guides our medical research priorities.
Americans got the vaccine for free initially because the government not only paid for development, but paid for the vaccine.
Our government did negotiate the price of the vaccine with Pfizer and Moderna. The first two doses of Pfizer vaccine cost $19.50 each and Moderna $15 each. Both were considered to be “pandemic pricing”. Post-pandemic, even though many of us may need a “booster” shot in the future, the prices will go up. Pfizer recently told their shareholders that they want to raise the price of a dose from $19.50 to $150-175/dose. Without the government negotiating prices, the sky’s the limit.
Our government has given pharmaceutical companies unilateral ability to charge whatever they want for drugs. They can do the same thing for vaccines.
That’s how our laws work. Our current policies benefit drugmakers, not the people who need those medications to remain healthy.
Every industrialized country in the world’s government negotiates prices with drug companies, using national review boards. These boards negotiate prices and analyze whether a new drug is more effective than it’s previous form. Germany, Canada, and other civilized countries, only allow new drugs if they can show that they’re better than existing ones. Outside of the Veterans Administration (VA), the U.S. doesn’t negotiate prices with pharmaceutical companies. The pandemic was a temporary exception.
The drug industry has been involved in over 3 decades of writing and creating national policy and laws (i.e. the Affordable Care Act) that are designed to benefit them, not you and me. It’s time to reform those laws.
Bill HR 3 passed by the House of Representatives in 2019, ignored by the Senate, would allow Medicare to negotiate for all drug prices, it would allow the prices to be extended to the private sector, it would put a cap on drug price increases annually at no more than the rate of inflation (about 2%, verses the current 9% over inflation). And, it would direct an amount of the savings to NIH to ensure new and innovative drug development. The Congressional Budget Office estimates that HR 3 would account for about $456 billion in savings over a 10-year period.
It’s an uphill battle because the pharmaceutical industry is one of the wealthiest and most powerful lobbies in the country. This has allowed them unlimited resources to fight policy change. When they need more money for campaign contributions and lobbyists, they raise the prices of their drugs to pay for it.
President Biden recently said, “Capitalism without competition isn’t capitalism; it’s exploitation.” The pharmaceutical industry has been exploiting Americans for too many decades with the price of drugs, including life-saving drugs. It is not capitalism when the largest group, our government, is not allowed to negotiate drug prices.
Pharmaceutical development is high risk, but why should we socialize the risk but privatize the profits? Ask your Senator to start hearings on bill HR 3 in the Senate. That’s how we negotiate for drugs prices we can afford and still maintain fair capitalism and true competitiveness.
Jan Phillips
Durango, CO