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A Washington, D.C. stalemate could push Covid-19 vaccines into the commercial markets in the U.S. earlier than expected, limiting access for the uninsured and throwing
Moderna
into private market competition for the first time in its history.
White House officials have issued increasingly dire warnings in recent days that the U.S. hasn’t bought enough vaccine doses for another booster round, and that Congress must authorize more spending in order to supply additional doses.
In early March, House Democratic leaders removed roughly $15 billion in Covid-19 funds from a large spending bill due to objections from some Democrats. The spending has yet to be replaced.
On Friday, a report from the Kaiser Family Foundation confirmed the White House claims, concluding that if the Food and Drug Administration were to authorize a fourth dose of the messenger RNA-based Covid-19 vaccines from
Pfizer
(ticker: PFE) and
Moderna
(MRNA), the federal government would not have enough doses on hand under most scenarios to cover even 70% of the population.
Demand for fourth doses, however, seems to be on its way. Both Moderna and
Pfizer
have requested fourth dose authorization; the FDA is convening its advisory committee on April 6. Meanwhile, the Omicron subvariant known as BA.2 is expected to cause a rise in Covid-19 cases in the U.S. in the coming weeks, increasing the potential urgency.
Up until this point, all Covid-19 vaccines distributed in the U.S. have been bought and paid for by the federal government. If the FDA does authorize a fourth dose, and if Congress chooses not to pay, the vaccines could move to the private market, where they would be bought and paid for like any other pharmaceutical.
It’s an eventuality for which Moderna is preparing. In response to a question from an analyst at a company presentation on Thursday, Moderna’s CEO, Stéphane Bancel, said that Moderna’s U.S. commercial team was preparing in case the federal government does not place an order.
“We were always planning that this will happen one day,” Bancel said. “And so, the commercial team that we have been hiring over the last two years… is actually working assuming there is a scenario where there is no funding with the U.S. government.”
Whether or not that happens depends on whether Congress chooses to pass legislation paying for more doses. Elsewhere in the world, countries are continuing to commit to purchase doses from Moderna. The company said Thursday that it is contracted to deliver $21 billion worth of doses this year, up from the $19 billion it announced in late February.
In separate comments to Yahoo Finance, Bancel said that, “in an endemic setting,” the private market price of the vaccine would be higher than it has been for the U.S. government so far.
While opening sales to private payers might boost the price of the vaccine, it also raises new risks for Moderna, which would be competing on the commercial market for the first time in its existence. It would face off against Pfizer, a big pharma behemoth with more than a century of commercial execution under its belt, and a far larger commercial operation.
Moderna shares were down 7% on Friday amid a tepid analyst response to its Thursday presentation on its vaccines pipeline. Pfizer shares were up 1.2%.
Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com
Read More: The Covid-19 Vaccine Market Could Turn Private. What to Know.