Moderna CEO Stephane Bancel on Wednesday defended the company’s plans to hike the price of its Covid shots fivefold, deflecting pressure at a Senate hearing to abandon the increase while taking barbs over his compensation.
Moderna plans to raise the list price of its vaccine 400% to $130 when the shots are sold on the private market as early as this fall. The company has been charging the U.S. government about $26 per dose.
Vermont’s independent Sen. Bernie Sanders, chairman of the Senate health committee, pressed Bancel during the hearing to agree not to increase the vaccine’s list price by that much.
“Quadrupling the price is huge,” Sanders told Bancel. “I would hope very much you would reconsider that decision. It’s going to cost taxpayers of this country billions of dollars. Is that something you can do?”
Chairman Bernie Sanders, I-Vt., questions Stephane Bancel, CEO of Moderna, during the Senate Health, Education, Labor and Pensions Committee hearing titled Taxpayers Paid Billions For It: So Why Would Moderna Consider Quadrupling the Price of the COVID Vaccine? in Hart Building on Wednesday, March 22, 2023.
Tom Williams | Cq-roll Call, Inc. | Getty Images
Bancel declined to make such a commitment. He told the committee that the Covid vaccine market is changing substantially as the U.S. government stops buying and distributing the shots for the entire country.
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Moderna expects demand for the vaccine to fall by 90%, leaving the company be on the hook for any wasted doses, Bancel said. During the pandemic, the federal government picked up those costs.
“To protect people, we need to make more than we think is going to be needed. We are going to have to pay for it,” Bancel said.
Moderna developed the vaccine in partnership with the National Institutes of Health. The U.S. government spent $12 billion on research, development and procurement of the shots.
The Covid vaccine remains Moderna’s only product on the market at the moment. The company has made $21 billion in profits since the shot first rolled out in the U.S. in December 2020.
Sanders accused Bancel of “profiteering” and “excessive CEO compensation” during his opening remarks. The senator later told Bancel the public doesn’t understand why Moderna is quadrupling the price of the vaccine when the company and its executives have made so much money.
Bancel cashed out more than $390 million in stock options in 2022, according to financial disclosures. He had a 7.3% stake in Moderna as of March 8 valued at $4.3 billion based on the stock’s Tuesday closing price of $152.10 a share.
Moderna’s board of directors approved a golden parachute for Bancel that soared to $926 million at the end of 2021 as the company’s stock price surged. The value of that package had decreased substantially by the end of 2022 to about $472 million as Moderna’s shares fell in value, according to financial disclosures.
Sen. Mitt Romney, R-Utah, came to Moderna’s defense. Romney said Bancel has become a billionaire because the stock he owns is now valuable due to the success of the company’s technology. Romney said people who invest large sums of money in risky, unproven drugs and treatments need a substantial return.
“I don’t know how much money is the right amount of money,” Romney said. “But the idea that somehow corporate greed has just been invented in America is absurd. It’s been there since the beginning of free enterprise — individuals investing, hoping that if it succed they’ll do very well financially.”
Bancel said the U.S. vaccination program has provided $5 trillion in economic value and prevented 18 million hospitalizations and 3 million deaths.
Correction: Moderna developed the vaccine in partnership with the National Institutes of Health. An earlier version misstated the name of the U.S. agency.