Vaccine prices a flashpoint in coronavirus funding talks

Lawmakers eager to ensure future vaccines don’t become subject to price gouging

HHS Secretary Alex Azar said it would be difficult to control the price of a coronavirus vaccine “because we need the private sector to invest” in developing one. (Tom Williams/CQ Roll Call)
HHS Secretary Alex Azar said it would be difficult to control the price of a coronavirus vaccine “because we need the private sector to invest” in developing one. (Tom Williams/CQ Roll Call)
Posted February 27, 2020 at 1:38pm

A push by Democratic leaders to ensure the availability of low-cost vaccines could complicate negotiations on an emergency funding bill to combat the deadly disease caused by a coronavirus.

There is no vaccine yet to combat the COVID-19 disease that has spread around the globe from China. But lawmakers are eager to ensure that any future vaccine doesn’t become subject to price gouging that would deny people access to it.

House Speaker Nancy Pelosi and Senate Minority Leader Charles E. Schumer issued a statement Thursday saying any bill must include a guarantee that “vaccines are affordable and available to all that need it.”

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Senate Appropriations Chairman Richard C. Shelby, R-Ala., expressed general support for the idea Thursday: “I think that would be a worthy goal to make it affordable.” But other Republicans involved in pharmaceutical pricing issues said the coronavirus supplemental funding bill wasn’t the place to legislate on the matter.

And Health and Human Services Secretary Alex Azar, a former executive at drugmaker Eli Lilly and Co., was reluctant to provide such an affordability guarantee when pressed on the point at a hearing Wednesday. 

“We would want to ensure that we work to make it affordable, but we can’t control that price because we need the private sector to invest,” Azar told the House Energy and Commerce Committee after questioning from Jan Schakowsky, D-Ill. “Price controls won’t get us there.”

At a news conference Thursday, Pelosi criticized Azar for making an “ill-advised statement” on vaccine affordability at the House hearing Wednesday. “We think that should be available to everyone, not dependent on Big Pharma,” she said.

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Exclusive licenses

The National Institutes of Health customarily grants exclusive licenses to pharmaceutical companies to continue drug research and development, particularly once they reach a phase of human testing that becomes more expensive and time-consuming. But this process typically prompts concerns about whether its partnerships with the drug industry to bring products to market will result in an affordable product. 

The same thing happened during the Zika virus outbreak. The NIH granted an exclusive license to a vaccine manufacturer in 2017, almost a year after concern about the virus had peaked. But it still prompted enough concern from lawmakers that the head of the NIH division that developed the vaccine had to try to pre-empt their criticism.

“We always need a pharmaceutical partner,” Anthony Fauci, who leads the National Institute for Allergy and Infectious Diseases, told CQ Roll Call in October 2017. “I can’t think of a vaccine, even one in which we’ve put substantial intellectual and resource input, that was brought to the goal line without a partnership with industry. So this is a very natural process that we’re doing right now.” 

He argued that for vaccines like Zika, which might predominantly be used in low-income countries, drugmakers don’t see a lot of financial incentive to get involved, which is why the NIH needs to grant exclusive licenses. But he argued that the process hasn’t had an impact on vaccine affordability. 

“I have not seen in my experience situations in which we were involved in the development of a vaccine, particularly for low- and middle-income countries that really needed it, where the pharmaceutical companies priced it out of their reach,” Fauci said.

Senate Labor-HHS-Education Appropriations Subcommittee Chairman Roy Blunt, R-Mo., echoed Fauci’s earlier position in comments to CQ Roll Call on Thursday. 

“With pandemic vaccines, [affordability] has never been a problem,” he said. “They’re usually developed with a lot of government assistance, and there’s no example of a pandemic vaccine that wasn’t affordable. ... And that’s what will happen again this time.”   

Top Senate Republicans on Thursday also said the issue should be dealt with as part of broader drug pricing legislation that’s been in the works since last year.

“I think that we’d better take care of the immediate problem and then use other pieces of legislation to get down the cost of drugs,” said Senate Finance Chairman Charles E. Grassley, R-Iowa, who is behind a drug price bill that the pharmaceutical industry is lobbying against. 

Sen. Bill Cassidy, R-La., said it would be “unwise” to assume that the development process would go smoothly enough that it would result in “some nebulous price that we determine to be affordable.” 

Added Cassidy: “I’m all about affordable drugs, but I’m also knowing that the cost of production may be far more than people otherwise anticipate.”

Calibrated response

Schakowsky and 45 of her Democratic colleagues renewed their concerns over exclusive licenses given the COVID-19 situation in a letter last week to President Donald Trump. “Providing exclusive monopoly rights could result in an expensive medicine that is inaccessible, wasting public resources and putting public health at risk in the United States and around the globe,” they wrote.

Democrats pressed Azar on the matter again Thursday at a House Ways and Means hearing, when Rep. Jimmy Panetta, D-Calif., asked if he would ensure that “any vaccine that is developed will be provided at no cost or at a very low cost at least to the American public.”

Azar offered what appeared to be a carefully calibrated reply: “I have directed my teams that if we do any joint venture with a private enterprise that we’re co-funding the research and development of the program, that we would ensure that there’s affordable access to the fruits of that, whether they’re vaccines or therapeutics.”

Administration health officials say a vaccine won’t be ready for a year to 18 months from now at the earliest.

The brewing dispute is the latest potential hiccup in negotiations on an emergency spending package to fight the COVID-19 disease that can result from exposure to the coronavirus. Lawmakers have been battling for days over how much money is needed how quickly since Trump unveiled a request for $2.5 billion.

Only half of that sum would amount to new funding, with the rest generated by raiding untapped money in other programs. The administration sought to divert $535 million that Congress appropriated to fight the Ebola virus, a proposal that has triggered a bipartisan rebuke in recent days.

Schumer countered with a plan that would spend $8.5 billion, but House Democrats have yet to embrace that spending level. House Minority Leader Kevin McCarthy, R-Calif., has said $4 billion might be the sweet spot. On Wednesday night Trump said he’d likely accept any amount lawmakers agree on.

Schumer and Pelosi also said they’d demand restrictions on funds transfers “to anything other than the coronavirus and fighting infectious diseases” — possibly a warning shot not to tap public health funds for border wall construction. The Democratic leaders also said interest-free loans to small businesses affected by the outbreak should be included, as well as reimbursements to state and local health officials.

McCarthy said Thursday he’s “hopeful” appropriators in Congress can get a bipartisan deal next week to address the coronavirus outbreak. He said of Schumer’s request that “just picking a number out of a hat like that never seems to work properly.”

On Wednesday, McCarthy said the administration’s $2.5 billion figure is a “little low” and added that “we’re probably looking at $4 billion.” McCarthy said the House GOP Conference does not need offsets in this situation.

The steep drop in the stock market this week is “concerning,” McCarthy said Thursday, adding that he expects it to bounce back once the coronavirus is under control.

Lindsey McPherson, Jennifer Shutt, Sandhya Raman and Chris Marquette contributed to this report.