Pricing speed bump for COVID-19 funding; Trump administration sending mixed messages on pricing, funding

Controversy over demands from Senate Democrats for pricing assurances are holding up a bill that will provide billions of dollars to combat the COVID-19 outbreak.

Senate Minority Leader Chuck Schumer (D-N.Y.) and Sen. Patrick Leahy (D-Vt.) Tuesday said they will not support a coronavirus supplemental spending bill unless it includes provisions requiring that contracts for vaccines and therapies developed with government funding include clauses requiring “fair and reasonable” prices.

Republicans have pushed back against the request.

“We are not going to say to the companies, after we taxpayers have paid for all of this, ‘Now go out and make a huge profit,’” Leahy told reporters

Democrats and Republicans are expected to come to agree on provisions of the spending bill in time for a vote on Wednesday, a congressional staffer told BioCentury.

The dispute reflects mixed messages from the Trump administration about pricing and government support for the development of COVID-19 vaccines.

After initially rejecting the notion of price controls, HHS Secretary Alex Azar has reversed course, and while HHS is funding some COVID-19 vaccine development, President Donald Trump has questioned the need for government to defray R&D costs.

The issue of pricing emerged on Feb. 26 at a congressional hearing when Rep. Jan Schakowsky (D-Ill.) asked Azar to guarantee that COVID-19 treatments or vaccines would be affordable.

Schakowsky said she and other members of Congress are “concerned that private pharmaceutical companies may end up having a role in this and raising the cost beyond the point that people could well afford it.”

Azar responded by emphasizing the role of private companies and suggesting that government has little influence over prices.

“The private sector must have a role in this,” Azar said. “We will not have a vaccine, we will not have therapeutics, without the private sector candidates that they and we will have to invest in.”

Azar added: “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. The priority is to get vaccines and therapeutics. Price controls won’t get us there.”

In the wake of bipartisan criticism, Azar changed tack. In a Feb. 26 letter to Schakowsky, he wrote that he agrees with her that “any vaccine should be accessible to all Americans and that affordability should not be a barrier.”

Azar said the U.S. government will use its scientific contributions as leverage to ensure affordable prices. “Government scientists invented some of the vaccine’s critical aspects and, as part of any agreement with our private sector partners, we intend to work with them to ensure the price they charge the government for the vaccine is affordable for taxpayers and patients.”

Schakowsky responded to Azar in a March 2 letter, stating that the “House of Representatives would find it unacceptable if taxpayer dollars were used to develop a vaccine for COVID-19 and the rights to produce and market that vaccine were subsequently handed over to a pharmaceutical manufacturer through an exclusive license with no conditions on pricing or access, allowing the company to charge whatever it would like and essentially selling the vaccine back to the public who paid for its development.”

The Illinois Democrat told Azar that ensuring that the cost of a COVID-19 vaccine is covered for some patients would not be sufficient.

While HHS could ensure coverage for Medicare and plans that comply with the Affordable Care Act, “you must not allow any pharmaceutical manufacturer to set a price that would cause private insurers to raise premiums or further exacerbate the federal deficit,” Schakowsky wrote. “Furthermore, such ‘first-dollar’ coverage would not help the uninsured or individuals enrolled in the short-term, limited duration health insurance plans that your agency has promoted in recent years.”

Presidential ambivalence about funding R&D

In addition to conducting research that could advance vaccine and therapy development, the U.S. government has been a major funder of COVID-19 R&D.

For example, the Biomedical Advanced Research and Development Authority (BARDA) is providing funds to cover some of the costs for Sanofi (Euronext:SAN; NASDAQ:SNY) to develop a candidate COVID-19 vaccine.

BARDA is also sharing some of the costs for Johnson & Johnson (NYSE:JNJ) to expedite its investigational COVID-19 vaccine program.

The issue of government investment in COVID-19 vaccine development was raised at a March 2 White House meeting.

Stanley Erck, president and CEO of Novavax Inc. (NASDAQ:NVAX), ended his summary of Novavax’s attempt to create a recombinant nanoparticle vaccine with a pitch for money.

“Frankly,” Erck said, “we need money. We're a biotech company, and not one of the larger pharma companies, so we need money to get scale.”

Trump responded by suggesting that Novavax work with other companies.

Joseph Kim, president and CEO of Inovio Pharmaceuticals Inc. (NASDAQ:INO), also pressed Trump for funding.

Inovio “could deliver about one million doses” of its candidate DNA vaccine by year-end, Kim said, “but to scale beyond that, we need your help, Mr. President. We need to work with you and your agencies, BARDA, and others to help us scale our vaccine to manufacture in America, to protect American public, also to lead the world in the vaccine development from America.”

While Trump was effusive in his praise for the biopharmaceutical industry and eager for it to deliver therapies and vaccines, he demurred when a reporter asked if the federal government should fund their R&D.

“Well, I don't know,” Trump said. “I think they're so rich. I know the companies very well. Some of them are so rich I think they can actually loan money to the federal government. They don’t need money, they need time.”

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