Big pharma players like Moderna (MRNA) and Pfizer (PFE) became the heroes of the pandemic thanks to their life saving covid vaccines, but as the memory of the pandemic wanes and the reality of business sets in, their status as the "good guys" is being reevaluated in Washington.
Moderna stock rose this week after CEO Stephane Bancel told the Wall Street Journal that the drug maker is considering a major price hike for its covid vaccine.
Moderna is considering raising the price of the drug to between $110-$130 per dose, as rival Pfizer has done. The plan is that once the U.S. government contracts run out, prices will switch to the commercial (pricier) distribution of the shots.
In the current federal supply contract, vaccines cost about $26 per dose, signed in July 2022. Earlier supply contracts pegged the cost of the vaccine at about $15 to $16 per dose, according to the Journal.
"As we evolve from a pandemic setting to an endemic setting, the real focus for us is on ensuring that our vaccines are priced based on the value that they provide to the healthcare system," Arpa Garay, Moderna's chief commercial officer, said during the company's last earnings call.
But Sen. Bernie Sanders (I-VT) has no interest in looking out for Moderna's bottom line, and the incoming chair of the Senate's health committee, sent a letter to Moderna letting the company know just that.
Bernie Takes on Big Pharma
Bernie Sanders built his political career on being a Washington outsider who is not afraid to take on big money interests.
Sanders has "very deep concerns" about what the price increase will do to the federal budgets of Medicaid, Medicare, and other government programs which will continue covering the vaccine.
He called the proposed price increase "outrageous," saying that the move could result thousands of Americans dying from Covid due to lack of access to the vaccine.
"Mr Bancel: In the last two years, Moderna made over $19 billion in profits and used those profits to provide incredibly extravagant compensation packages to you and other top officials at your company. It is reported that you, yourself, became a multi-billionaire as a direct result of Moderna's Covid vaccine," Sanders wrote.
"Lets be clear. The purpose of the recent taxpayer investment in Moderna was to protect the health and lives of the American people, not to turn a handful of corporate executives and investors into multi-billionaires."
Sanders also noted that the vaccine the company is currently trying to profit from (even more than it already has) was developed in partnership with the National Institutes of Health, a government agency funded by U.S. tax payers.
Moderna's Wild Ride
Moderna and Pfizer have benefited immensely from the success of their vaccines.
Moderna's stock, while well off of its September 2021 all-time high near $450 per share, has more than doubled from its 2020 levels.
The company reported annual revenue of just $60 million in 2019, $803 million in 2020, $18.47 billion in 2020, according to Macrotrends, and the company originally forecast revenue of $21.39 billion in 2022.
But during its quarterly earnings call the company lowered revenue expectations to between $18 billion and $19 billion for the year, leading to a huge stock drop.
