Next week, Moderna CEO Stéphane Bancel will testify before the Senate Health, Education, Labor, and Pensions Committee on the price of his company’s COVID-19 vaccine.
He’ll face an unfriendly audience. Committee Chairman Sen. Bernie Sanders, I-Vt., claims that companies like Moderna profited off COVID at Americans’ expense. He’s eager to “rein in the greed of these pharmaceutical pandemic profiteers.”
His arguments are ignorant of basic economics. Incentives matter. The possibility of future profit is what draws investors and companies into pharmaceutical research in the first place. If lawmakers effectively criminalize profit, then biomedical research and development will grind to a halt—and society won’t have innovative medicines for Sen. Sanders to demagogue about.
The math behind drug development is brutal. It takes about $2.6 billion to bring a new drug from the lab through clinical trials and regulatory approval to market. Fewer than 12% of possible drugs make it from Phase I clinical trials to final approval from the Food and Drug Administration.
The few drugs that successfully make it to patients need to cover not just their own development costs but the costs of those that failed. Profits from one successful drug must pay for the nine that never made it.
Consider the history of research into potential therapies for COVID. To date, there have been 49 failed COVID vaccines, 202 failed COVID treatments, and 153 failed COVID antivirals. Just two vaccines, one treatment, and one antiviral have received full approval.
Moderna had been struggling for years to develop a successful product pre-COVID. Founded in 2010, the company aimed to develop mRNA that induces the body to build therapeutic proteins on its own. Their project nearly failed.
In 2013, the British pharmaceutical company AstraZeneca signed a risky $240 million partnership with Moderna, gambling on the company’s success testing mRNA on mice—and hoping for financial gains down the road.
By 2016, the company had 11 drug candidates and more than 90 preclinical projects in the pipeline. But by 2020, when the pandemic hit, it still had never developed an FDA-approved product.
When Moderna’s COVID vaccine received full approval from the FDA in 2022, it was the first time the company had successfully run the regulatory gauntlet.
The promise of future profits is what kept investors backing a company that took a decade to get a product to market.
Sen. Sanders seems to ignore that history—and focus on the relatively recent accumulation of wealth by those who had the patience to back the company for years.
But even a billion-dollar payday pales in comparison to the value that the COVID vaccines have delivered to society. In their first two years in existence, the vaccines prevented more than 3 million deaths, more than 18 million hospitalizations, and almost 120 million additional COVID infections, according to the Commonwealth Fund.
Commonwealth’s research also estimated that the U.S. vaccination program saved the country $1.15 trillion “in medical costs that would otherwise have been incurred.”
Add to that the economic and social benefits. A January 2022 study estimated that the vaccines delivered $5 trillion in economic value in the United States “from avoided COVID-19 infections and resuming unrestricted social and economic activity more quickly.”
The drug-development ecosystem that Sen. Sanders plans to attack next Wednesday is the reason we have multiple effective COVID vaccines and therapies. Banning the profit motive in medicine is a recipe for less investment in medicine. That’s not something the patients of today—or tomorrow—should welcome.
Source: https://www.forbes.com/sites/sallypipes/2023/03/16/bernie-doesnt-get-healthcare-innovation/