American taxpayers have already given Moderna $10 billion for its coronavirus vaccine. If the Biden administration gets its wish, that tab could soon grow.
In a court filing last month, Department of Justice lawyers offered to "relieve" Moderna of any liability it faces from a lawsuit that accuses the drug company of failing to pay licensing fees for technology it used to develop its vaccine during "Operation Warp Speed." Moderna has argued that the federal government should be on the hook for any legal settlement because of a stipulation in its contract that protects the company from patent litigation. The government had stayed silent on the matter until last month, when Justice Department lawyers said that any liability that Moderna faces should "transfer" to the United States government, citing a World War I-era law that protects federal contractors from patent disputes.
While the judge handling the case recently denied the request, Moderna and the federal government could appeal the decision and put taxpayers on the hook for any legal payout. Genevant, one of the companies that sued Moderna, has already accused the drug maker of "trying to shift responsibility for its patent infringement to the U.S. taxpayer."
The government’s offer to bail out Moderna will likely not sit well with the American public or with senators when they grill Moderna’s CEO at a hearing on Wednesday. The Senate Health, Education, Labor and Pensions committee invited Stéphane Bancel to testify about the company’s plans to quadruple the price of its coronavirus vaccine. Sen. Bernie Sanders (I., Vt.) called Moderna the "poster child" for pharmaceutical industry greed. He criticized Moderna for the proposed price hike after the company relied on taxpayer support to develop and manufacture the vaccine.
The vaccine was a godsend for Moderna, which had not marketed a drug in its 10-year history. The company’s revenues went from less than $800 million in 2020 to $19 billion last year. That would add to the nearly $10 billion that the government has paid Moderna during the pandemic. The Pentagon awarded an $8.2 billion contract to Moderna, and the Department of Health and Human Services paid the company another $1.7 billion. Moderna booked net income of $12.2 billion in 2021 after reporting a loss of $747 million in 2020.
That has made Bancel a multi-billionaire, as Moderna’s stock price has surged from around $20 at the beginning of the pandemic to roughly $150 today. It peaked at a high of $450 in September 2021. Bancel sold $408 million worth of Moderna shares between the start of the pandemic and March 2022.
It is unclear whether Moderna and the Department of Justice will appeal the recent decision. Moderna did not respond to a request for comment. A Justice Department spokesman said the agency "doesn’t have anything else to add."
Published under: Coronavirus , Department of Justice , Merrick Garland , Vaccines