Moderna CEO Stephane Bancel defends 5-fold Covid vaccine worth hike throughout Senate barbecue

Modern CEO Stephane Bancel on Wednesday defended the company’s plans to quintuple the price of its Covid shots, deflecting pressure at a Senate hearing to abandon the increase while taking barbs over its compensation.

Moderna plans to increase the list price of its vaccine by 400% to $130 when the shots go on sale in the private market as early as this fall. The company has billed the US government about $26 per dose.

Independent Vermont Senator Bernie Sanders, chair of the Senate Health Committee, urged Bancel during the hearing to agree not to increase the vaccine’s list price by as much.

“Quadurupling the price is huge,” Sanders told Bancel. “I really hope that you will reconsider this decision. It will cost this country’s taxpayers billions of dollars. Can you do that?”

Chairman Bernie Sanders, I-Vt., questions Moderna CEO Stephane Bancel during the Senate Committee on Health, Education, Labor and Pensions hearing entitled Taxpayers Paid Billions For It: So why should Moderna consider paying the price of the Quadruple COVID vaccine? at the 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 significantly as the US government stops buying and distributing the vaccine across the country.

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Moderna expects demand for the vaccine to fall by 90%, leaving the company on the hook for wasted doses, Bancel said. During the pandemic, the federal government covered these costs.

“To protect people, we have to do more than we think is necessary. We’re going to have to pay for that,” Bancel said.

Moderna developed the vaccine in partnership with the National Institutes of Health. The US government spent $12 billion on research, development, and procurement of the shots.

The Covid vaccine remains Moderna’s only product on the market right now. The company has generated $21 billion in profits since the shot first launched in the United States in December 2020.

In his opening speech, Sanders accused Bancel of “usury” and “excessive CEO remuneration”. 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.

According to financials, Bancel paid out more than $390 million in stock options in 2022. He owned a 7.3% stake in Moderna as of March 8, valued at $4.3 billion, based on the stock’s closing price on Tuesday of $152.10 per share.

Moderna’s board of directors approved Bancel for a gold parachute, which rose to $926 million in late 2021 as the company’s stock price soared. The value of that package had dropped significantly to about $472 million by the end of 2022, according to financials, as Moderna’s stock fell in value.

Sen. Mitt Romney, R-Utah, came to Moderna’s defense. Romney said Bancel became a billionaire because the stocks he owns are 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 significant return.

“I don’t know how much money is the right amount of money,” Romney said. “But the idea that corporate greed was invented in America is absurd. It has existed since the early days of free enterprise – individuals invest in the hope that if they succeed, they will do very well financially.”

Bancel said the US immunization program has provided $5 trillion in economic value and prevented 18 million hospital admissions and 3 million deaths.

Correction: Moderna developed the vaccine in partnership with the National Institutes of Health. In an earlier version, the name of the US agency was incorrect.

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