By John Yang
January 14, 2023
Source: PBS News
Photo / Image Source: Unsplash,
Since COVID vaccines first became available in the U.S., the federal government has been buying them from manufacturers and distributing them for free. But soon, the manufacturers will be distributing them at higher prices. Jen Kates, senior vice president and director of global health at the Kaiser Family Foundation, joins John Yang to discuss what this means for future vaccination costs.
John Yang: Ever since COVID vaccines first became available in the United States, the federal government has been buying them from manufacturers and distributing them for free but that was never intended to be permanent and soon they'll be distributed by the manufacturers at prices they set. The government was paying $26 a dose from Moderna's updated boosters. But Moderna and Pfizer have both said they're considering a range of $110 to $130 a dose on the open market. Why the jump? And what does this mean for the future of vaccine cost as new variants emerge, especially for those without insurance? Jennifer Kates is Senior Vice President and Director of Global Health at KFF, the Kaiser Family Foundation. Jennifer, first, let's be clear that $110 to $130 range, what do those numbers represent?
Jennifer Kates, Senior Vice President, KFF: So, what we think they represent is what the manufacturers have said they might charge when the vaccines are in the commercial market. They could end up charging more, but this is what they're projecting. And essentially, that would be the price per dose about four or close to five times what the federal government paid even at the high end.
John Yang: But who would they be charging that too?
Jennifer Kates: Right, so the good — there's good news and bad news here. The good news is that for most people with public or private insurance, we will not be paying for those vaccines, we are protected against costs. It's the buyers, the insurers, who are — and the purchasers, who are going to be paying that. And it is possible that will have a trickle-down effect on premiums, and certainly will increase costs for this healthcare system. For individuals, most individuals with insurance will be okay.
John Yang: So, why this increase? Why go from charging the government $26 to this big increase?
Jennifer Kates: So, if we think back to 2020, when COVID first was emerging and becoming a huge emergency, there were no vaccines. And the government made a bet that if it purchased vaccines and advanced candidates that weren't even authorized yet, and helped fund the research that one of those candidates would be good enough. And in fact, we had more than one, and the government continued to buy in bulk. And by doing so, the federal government basically was saying to the manufacturers, we're taking care of your risk here. We're buying these from you to distribute, so you don't have that risk of losing money in the marketplace. Now, that we're going into a commercialized environment, it's the market. And these manufacturers are trying to assess who's going to want my vaccine, what are they — what's it going to be worth to them? Is there going to be demand? And they're just — they're going to try to make some profit. That's not how it worked before.
John Yang: So, it's a shift from a guaranteed market to supply and demand?
Jennifer Kates: Exactly. It was guaranteed before. The government bought vaccines, even if not everyone got vaccinated. And we know that's the case. But yes, it's shifting to the commercial market. This was always anticipated. I think the challenge is, can it be as smooth as possible, and not rocky and not leave people out. And we know there are going to be people left out.
John Yang: Who might be left out?
Jennifer Kates: The biggest issue here is the uninsured and the underinsured to some extent, but the uninsured are the group in the U.S. that have no guaranteed access to vaccines at no cost. So, they — if we're faced with another wave, or it's recommended that everyone get a booster, there's no guarantee that that's going to be available to them. And if you think about $130 a dose, it's unlikely that a lot of people are going to be able to do that. So that's really the concern right now.
John Yang: Is there any way the government can create a safety net here?
Jennifer Kates: So, it's interesting, the Biden administration did come out with proposal to do that in their budget requests, they basically said, look, there's a problem. The uninsured in the United States, adults don't get guaranteed access to any vaccine that's recommended, whether it's flu or COVID. And we want to change that let's create a program called a vaccines for adults program, modeled after a really successful one that's for kids. Well, Congress didn't bite on that. And so, there is no program. I think the question is, will Congress at some point, appropriate additional funds, so that could happen, at least for COVID. That hasn't happened yet.
John Yang: Are there potential public health implications from this?
Jennifer Kates: There certainly are. I mean, for all of the noise around the vaccines, what we know about these vaccines is, A, they work really well to prevent people from getting sick and hospitalized and even dying, if they get COVID. You certainly don't want people who are uninsured to get sick or just because they can't afford this. B, even though the vaccines do not 100% prevent transmission, they do reduce it. And we know that if you give people a vaccine, they're going to be less likely to be infectious. They're going to be less likely to transmit. So, it's — in everyone's interest to do this.
John Yang: Jennifer Kates of KFF, the Kaiser Family Foundation, thank you very much.
Jennifer Kates: Thank you.
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