Editor’s note: Richard Hughes IV teaches vaccine law at The George Washington University Law School and is a partner at the law firm Epstein Becker Green. He served as vice president of public policy at Moderna during the COVID-19 pandemic.
Amid a “triple-demic” of respiratory illness, vaccination rates for COVID-19 and influenza are concerningly low. Instead of misplaced attention to the per-unit commercial list price of vaccines, we should be focused on vaccinating as many people as possible to reduce the spread of respiratory illness that can be especially life-threatening for the youngest and oldest Americans and the immunocompromised.
Fixation and hype over the cost of COVID-19 vaccines is not new. It began just as soon as we realized that a vaccine would be needed to bring an end to the pandemic and before vaccines were out of the first phase of clinical trials. Lawmakers relentlessly pressed then HHS Secretary Alex Azar on the vaccine’s price and affordability, ignoring the fact that our country had policies and programs for making vaccines available for free.
It would be disingenuous to suggest that COVID-19 vaccine pricing in the neighborhood of $15-$20 per dose should last indefinitely. We always knew this transition would occur. Pandemic and endemic vaccine economics fundamentally differ. When COVID-19’s threat was at its height, the government had a public health and political imperative to secure adequate supply to vaccinate the masses.
It also wielded significant bargaining power. The massive purchase arrangements made great discounts at that degree of volume more palatable to manufacturers. Now that pandemic fears are subsiding and public vaccine demand unfortunately decreases, the equation is different. Indeed, our nation has seen the exit of manufacturers from the vaccine marketplace before. The potential consequences are reduced capacity for meeting the threat of future pandemics and less than assured supply of routine vaccines. A healthy public-private market is essential to vaccine sustainability.
At the beginning of the vaccine rollout, cost effectiveness models showed that vaccinating all adults against COVID-19 is was more cost effective than not and that a vaccine priced up to $150 would be considered cost effective. This hypothetical price point is $20 to $50 more than publicly suggested commercial list prices for the two licensed mRNA vaccines.
Moreover, when making vaccine recommendations, the Advisory Committee on Immunization Practices, or ACIP, considers vaccine cost effectiveness, resulting in recommendations tailored to specific age- and risk-based cohorts. The ACIP has yet to apply this analysis to COVID-19 vaccines, though it will inevitably do so when making future vaccine recommendations.
After a period in which the federal government has absorbed the full cost of purchasing COVID-19 vaccines, this responsibility will soon shift to health insurance companies. Estimates indicate this will have “a small upward effect” on premiums.This should come as no surprise. Payers have already borne the cost of administering the vaccine doses throughout the pandemic and have covered other routinely recommend vaccines for decades. As an endemic disease vaccine, COVID-19 now joins the list.
Rhetoric concerning the cost of a vaccine to patients is also misplaced because most Americans do not have to pay for vaccines. The notion of patient “skin in the game” for healthcare costs is apposite to the notion that all individuals should receive recommended vaccines. Indeed, numerous studies have shown that subjecting patients to out of pocket costs for vaccines causes undesirable patient attrition, which can lead to poorer health outcomes both for individuals and the population as a whole.
That is why Congress has over time enacted laws to prohibit patient cost sharing for vaccines. Medicare beneficiaries have not had to pay out of pocket for flu or pneumococcal vaccines since the 1980s. The Affordable Care Act and Inflation Reduction Act extended this policy to all vaccines for those covered under Medicare, private health insurance and Medicaid. Collectively, 42 years of federal policy development has resulted in most Americans and all Medicare beneficiaries paying zero out-of-pocket costs for recommended vaccines.
But what about Americans without health insurance coverage? A more apropos focus of national debate before, during and after the pandemic would be the millions of Americans who lack vaccine access because they do not have health insurance or live in a state that has not expanded Medicaid.
The nearly 30-year-old Vaccines for Children, or VFC program, ensures that every child in this country has access to vaccines with no out-of-pocket costs. The program has been credited with significantly reducing vaccine-preventable illness in children and making vaccine access vastly more equitable. Under the VFC program manufacturers provide vaccine discounts to the CDC ranging today from 25% to 75% off the commercial list price.
Still, approximately 20 million adults without health insurance will have difficulty accessing vaccines. The federal government will have access to discounted pricing to purchase COVID-19 vaccines for these individuals but this is subject to Congressional appropriations and there is no program that guarantees access. The Biden administration has sought to directly address this gap with the creation of a Vaccines for Adults program as proposed in its CY23 budget, which would build upon the success of VFC.
The pandemic made Americans more aware than ever of the role that vaccines play in protecting our society from illness. We should be focused as a nation on reinforcing that awareness, encouraging vaccination against diseases that continue to threaten individual and public health, closing vaccine access gaps for the underserved, and preserving incentives for market participation so that we remain fortified against these and future public health threats.