Amy Maxmen’s March 24 op-ed, “Moderna shows government should drive a harder bargain,” decried the amount that Moderna intends to charge insurers for its coronavirus vaccine. She wrote that the National Institutes of Health and other federal agencies invested $337 million in mRNA research in general and an additional $1.5 billion to support the studies and clinical trials of Moderna’s vaccine. She asserted that the government should “secure a better return on its investments upfront.”
The government’s ROI on the Moderna vaccine was, at a minimum, 100 percent — more than $2 returned for every $1 invested based on the difference between the amount the government paid for the Moderna vaccine and the amount it paid for a comparable vaccine from Pfizer. Judged by any metric, a 100 percent ROI is spectacular: The average ROI in the technology sector was about 16 percent averaged across the four quarters in 2022.
Ms. Maxmen used Moderna as a jumping off point to argue that drugs cost too much and that the Inflation Reduction Act, which authorizes Medicare to negotiate drug prices for a limited cohort of drugs, does not go far enough. She claimed that it will not help those on Medicaid. That is correct: The IRA will not help those on Medicaid because they usually pay nothing for drugs, no matter what the cost might be. It is likely the IRA will actually drive up prices for those who are commercially insured.
Robert P. Charrow, Chevy Chase
The writer was general counsel for the Health and Human Services Department from 2018 to 2021.