Moderna CEO Stéphane Bancel is set to testify before the Senate’s top healthcare committee Wednesday as the federal government generously offers to bail his company out of a patent infringement lawsuit.
The purpose of Wednesday’s Health, Labor, Education and Pensions (HELP) Committee hearing is to question Bancel about drug prices after Moderna proposed quadrupling the price of its COVID-19 shot. Independent Vermont Sen. Bernie Sanders, HELP’s chair, and Republican Louisiana Sen. Bill Cassidy, the committee’s ranking member, have long advocated for lower drug prices.
The Biden administration’s entanglement with ongoing litigation related to patent infringement has received less attention than issue of vaccine pricing. Moderna is currently fighting off a lawsuit from Arbutus Biopharma and Genevant Sciences, a pair of small biotechnology firms that allege Moderna stole their technology to develop its COVID-19 vaccine.
Moderna reported $18.4 billion in revenue in 2021 and $19.2 billion in 2022, with the lucrative vaccine contract driving a huge increase from the roughly $800 million the company made in 2020. Bancel was compensated handsomely, raking in more than $400 million between salary, stock sales and other forms of payment.
Despite the backing of the U.S. government, Moderna failed to persuade a federal judge it should not have to face a patent lawsuit over its COVID-19 vaccine and that the United States should have been sued instead @blakebrittain https://t.co/3IfejzMWrm pic.twitter.com/4khzi1Arnv
— Reuters Legal (@ReutersLegal) March 13, 2023
Arbutus and Genevant alleged that Moderna infringed on their patents for lipid nanoparticle technology, which they claim took years of incredibly challenging work for their scientists to develop. If the lawsuit succeeds, the companies could earn royalties from Moderna as compensation, which could add up quickly with so much money involved.
Much of that money flowed into Moderna’s coffers from the wallets of American taxpayers. For almost the entire pandemic, COVID-19 vaccines were purchased directly by the U.S. government and distributed for free to Americans who wanted to get the shots. Moderna also got nearly $2.5 billion from the government to fund vaccine development.
Now, the Biden administration is attempting to offer the company another windfall. Last month, the Department of Justice (DOJ) filed a statement of interest in the Moderna lawsuit, offering to take on liability for the company’s alleged patent infringement. Such a move would result in the Treasury Department being responsible for potential damages from the suit, rather than Moderna itself.
The day after that statement of interest was filed, Moderna announced an agreement to offer its COVID-19 vaccine to the uninsured and underinsured at no cost following pushback from Democratic lawmakers against the proposed price hike.
Moderna’s defense in the lawsuit isn’t that the company didn’t steal the critical technology it’s accused of stealing. Instead, the company claims that, thanks to an obscure hundred-year-old statute, liability in the case actually belongs to the U.S. government because it funded the development and purchase of the end product in question. (RELATED: Big Pharma Is Hoarding Over $1 Billion In Payments For Cancelled Vax Doses: REPORT)
Despite the DOJ agreeing that taxpayers should take the blame, U.S. District Judge Mitchell Goldberg denied Moderna’s motion to dismiss the case on those grounds. Goldberg said Moderna hadn’t proven that the shots were made “for the government” rather than the government simply incidentally benefitting from them.
As a result, the legal battle rages on. It is unclear why exactly the Biden administration would offer to save Moderna from itself if it did, in fact, steal key technology. It is also unclear whether the government’s offer to shift the bill to American taxpayers is connected to Moderna’s sudden decision to give out free vaccines.
It remains to be seen whether Bancel will be questioned about this topic Wednesday, when he is expected to be grilled by lawmakers on other allegedly problematic business practices that have built his billion-dollar company.