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Modern charges much more for their experimental coronavirus vaccine than competing treatments



Modern, the first pharmaceutical company to conduct human trials of a coronavirus vaccine in the United States, charges as much as $ 37 per dose for its experimental treatment. That’s more than three times what some industrial rivals say they plan to pay for their vaccines.

Individuals are expected to need up to two doses to fully immunize them from COVID-19, which means treatment can cost as much as $ 74 per person.

There is currently no approved vaccine to protect humans from the new coronavirus. But Moderna seems to have a lead for the many pharmaceutical manufacturers and biotechnology companies working to develop one. The Cambridge, Massachusetts-based company initiated a Phase III study of its vaccine in late July, following promising results in an initial test earlier this summer.

Managers in Moderna expressed confidence that the company̵

7;s vaccine – which would be the company’s first commercial product – will be available by the end of the year.


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European pharmaceutical manufacturers Sanofi and GlaxoSmithKline signed a deal last week with the US government to produce 100 million doses for about 10.50 dollars each, according to calculations by analyst Mani Foroohar from the brokerage firm SVB Leerink. The American pharmaceutical giant Pfizer, which also works with a vaccine against coronavirus, has said that it will initially price its treatment at $ 19.50 per dose.

In a conference call with analysts on Wednesday, Moderna executives said they have charged between $ 32 and $ 37 for initial doses of its vaccine, which will be administered in trials or stored for later use. This is almost 90% more than what Pfizer charges and triples the cost of the Sanofi-GSK vaccine.

“We work with governments around the world and ours, to ensure that the vaccine is available regardless of our ability to pay,” Modern CEO Stephanie Basel said in the conversation. “And we will be responsible for the price, well below the value, during the pandemic.”

Modern did not respond to a request for comment.

Modern has received nearly $ 1 billion in federal funding to develop and produce its vaccine, and it has been secured on the question of how much of a profit it would receive for treating the disease that has killed nearly 158,000 people in the United States.

While a number of its rivals promised to forgo profits from their vaccines at a congressional hearing last month, Moderna was reluctant to make the same promise. “We will not sell it at a cost,” Modern President Dr. Stephen Hodge testified at the hearing.

It is still unclear how much money Modern would make on its vaccine if it is proven to be effective and approved by US regulators. One factor that can affect pricing is that Moderna faces potentially higher production costs than larger companies.

“The cost of manufacturing can vary and [Moderna] is a smaller company and therefore may not have as much scale as Pfizer, “says analyst Michael Yee, who follows Moderna for brokerage firm Jefferies. The prospect of higher manufacturing costs may be one reason why Moderna’s experimental vaccine costs more than other pipeline measures, he added.


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Based on the high-end price of $ 37 for its vaccine, Modernes’ current contract with the government is to produce only about 11 million doses. It is a much smaller share than what is required under US business with other companies. Moderna has said that it will probably charge less per dose when its production grows and receives larger orders.

SVB Leerinks Foroohar expressed doubts that Moderna can continue to price its vaccine so much higher than competing products. “Pharmaceutical companies say they can produce as many as 6.5 billion doses of vaccines by the end of next year,” he said. “With that range, it is not a reasonable expectation that Moderna could strive for a premium price on a scale.”

Equity analysts at the independent research firm Trefis have estimated that Moderne’s operating margin is around 14.5% and that it will be able to produce as many as 800 million doses per year by the end of 2021. Assuming the company can continue to pay at least $ 30 per dose, Modern could see an annual profit of about $ 3.5 billion as long as the virus remains a threat.

But that is if everything goes as planned. “For a company that has never had a product before, this is a very public launch,” said Foroohar. “The execution field and the capacity field are unique and steep, but of course the possibility is also unique.”


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