Lawmakers ask about potential COVID-19 vaccine cost, efficacy

There are no guarantees that a vaccine underwritten with public dollars will be affordably priced, drug executives say

Rep. Jan Schakowsky, D-Ill., shown talking with reporters in the Capitol, quizzed drug executives at a subcommittee hearing Tuesday on whether their agreements with the federal government ensure that any COVID-19 vaccine will be affordable.  (tom williams/CQ Roll Call file photo)
Rep. Jan Schakowsky, D-Ill., shown talking with reporters in the Capitol, quizzed drug executives at a subcommittee hearing Tuesday on whether their agreements with the federal government ensure that any COVID-19 vaccine will be affordable. (tom williams/CQ Roll Call file photo)
Posted July 21, 2020 at 4:23pm

Several major drugmakers confirmed to Congress Tuesday their contracts with the U.S. government include no guarantees that a vaccine underwritten with billions in public dollars will be affordably priced.

The comments from the executives at a hearing Tuesday offer a window into the agreements between the U.S. government and the pharmaceutical industry.

Operation Warp Speed — the U.S. effort to conduct large clinical trials and manufacture enough doses for millions of people — has allocated nearly $10 billion total to the enormous task of making a vaccine that can stanch the suffering caused by COVID-19.

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At least 611,598 people worldwide have died of COVID-19, according to the Johns Hopkins Coronavirus Resource Center.

Five executives testified to the House Energy and Commerce Oversight and Investigations Subcommittee that they will price vaccines with the urgent need to fight the pandemic in mind.

"These are extraordinary times and our pricing will reflect that," said Pfizer Chief Business Officer John Young.

But those assurances are not specified in the contractual obligations to U.S. taxpayers, said executives from three of the companies — Moderna, Johnson & Johnson and Merck. Together, those companies have accepted more than $1.1 billion in public funding.

“Have any of your contracts or agreements with the federal government included provisions to ensure affordability in vaccines or treatments?” asked Rep. Jan Schakowsky, D-Ill.

“We don’t have a supply agreement with the U.S. government, congresswoman. We have a research and development agreement,” said Moderna President Stephen Hoge.

In research and development agreements, the federal government often retains the right to reclaim patent protections for new taxpayer-funded innovations and give manufacturing rights to a competitor if a company sets the price too high. Those provisions have not been enforced, but the government can use the threat as leverage.

But those “march-in” rights were weakened in contracts between pharmaceutical companies and the government, according to redacted copies obtained by drug pricing advocates at Knowledge Ecology International.

Schakowsky asked if the companies would sell their vaccines without making a profit. Johnson & Johnson said it would for a while.

"Johnson & Johnson is committed to bringing an affordable COVID-19 vaccine to the public on a not-for-profit basis for emergency pandemic use," said Macaya Douoguih, head of clinical development and medical affairs at Johnson & Johnson's vaccine unit. "This not-for-profit price will be for the emergency pandemic period."

Three companies — Moderna, Merck and Pfizer — said no.

“We will not sell it at cost. … No, ma’am,” said Hoge.

Moderna has accepted $456 million from U.S. taxpayers for the development of its mRNA-1273 vaccine candidate. The company’s technology, which utilities messenger RNA, also borrows from large-scale public investments in the Human Genome Project, some experts have pointed out.

An executive with another company, AstraZeneca, testified the U.S. has already committed to purchasing 300 million doses of the company’s vaccine candidate at cost as part of its $1.2 billion contract with the company. The funding will also underwrite a large clinical trial.

“Under our agreement with BARDA for just over a billion dollars, it’s funding our clinical development program, which is a 30,000-patient study in adults and children, and it’s also funding the 300 million doses that we’re going to be providing at no profit,” said Mene Pangalos, the company’s executive vice president for research and development.

Other questions

There are also questions about whether any developed vaccine will be effective, safe and widely accepted enough to stop transmission.

Lawmakers, patient advocates and vaccinologists have expressed concern that Operation Warp Speed has not published its unredacted contracts with pharmaceutical partners.

The project has prioritized new platforms that entered clinical trials quickly.

“We know very little about how Operation Warp Speed is making its decisions,” said Jason L. Schwartz, an assistant professor in the Department of Health Policy and Management at the Yale School of Public Health, in an interview last week. “What the administration appears to be doing is prioritizing vaccine candidates that can potentially make their way through development most quickly in order to get a vaccine, even though it may not necessarily be the best kind of vaccine.”

The chairman of the full committee, Frank Pallone Jr., D-N.J., asked the companies if they would commit to only releasing a vaccine that is at least 50 percent effective.

The Food and Drug Administration released guidance in late June indicating that any vaccine seeking approval should submit data showing at least 50 percent efficacy.

But some experts have speculated that the FDA could make a less effective vaccine available through an emergency use authorization, which allows drugs to be made available before a full FDA approval in emergencies, as long as the benefits are believed to outweigh the risks.

The FDA’s approval, and then revocation, of an emergency use authorization for hydroxychloroquine for COVID-19 stirred concerns that the White House will pressure the FDA to approve a less-than-effective vaccine.

“Historically, I’ve had confidence in the FDA, but now that Trump is president, I think there is a real possibility that he will pressure the FDA to lower the standards,” Pallone said. “I want to make sure that you will guard against any pressure that comes from the FDA.”

“All of our data in pivotal studies would be published … but also remember this is going to be a vaccine that will be used globally, so every regulatory authority will have a look at the efficacy and safety of our vaccine,” said AstraZeneca’s Pangalos.

Rep. Jeff Duncan, R-S.C., asked the executives how they would ensure that a vaccine tested in relatively young and healthy clinical trial volunteers would be effective in the most vulnerable people who are older and have comorbidities.

He said he worried COVID-19 vaccines would be similar to flu vaccines, which usually have an efficacy rate of less than 50 percent, partially because they are less effective in older adults.

“Where [flu vaccines are] not effective is in that population [of] 60 and above, especially when comorbidities are involved. So let’s shift to COVID-19,” Duncan said. “How will you create a vaccine that is effective for the most vulnerable population and that is the 60-plus population, especially [with] comorbidities?”

“I think this is why we’ll end up with multiple vaccines,” said Julie Gerberding, Merck executive vice president and chief patient officer. An initial vaccine may not be the best one for certain populations, she suggested, such as hypothetically children or seniors.

Pangalos said some of AstraZeneca’s clinical trial volunteers would be at least 70 years old. Douoguih said the Johnson & Johnson’s clinical trials will enroll some elderly people as well.