We're Paying A Drug Company Twice Over For Unguaranteed Coronavirus Vaccine

[turbinetree]

The Art of the Steal: Biotech Company Shows All Those Lazy Unemployed Workers How to Really Rip Off the Government

By Dean Baker, Center for Economic and Policy Research

Moderna, a relatively new biotech firm, generally is seen as the U.S. frontrunner in developing a coronavirus vaccine.

It trails several Chinese companies.

Based in Cambridge, Mass., Moderna should certainly get an award for milking the government.

It doesn’t matter if the vaccine works. Moderna already was paid twice over.

The big winner in initial contracts, Moderna got $483 million in April to develop a vaccine. While that may have seemed adequate to jockey the vaccine through both the development and testing process, the company decided to go back to the trough for more. It is having the government pay $472 million for the Phase 3 testing.

https://www.dcreport.org/2020/07/30/were-paying-a-drug-company-twice-over-for-a-coronavirus-vaccine/

-snip-

If we go back to Econ 101, the rationale for the government granting patent monopolies to drug companies or anyone else is to give them the incentive for doing research and developing new products. The monopoly will allow Moderna to recoup research costs and be compensated for the risk that they won’t have a successful product.

The Moderna story won’t fit here. It already was compensated for its research costs by the government. Furthermore, it has zero risk. If its vaccine turns out to be ineffective or have harmful side effects, the company already has been paid.

The patent monopoly means that we are paying Moderna twice. We first picked up the tab for the research and the testing. Now we are giving the company a patent monopoly so that it can charge people around the world as much as it wants for the vaccine.

This should be a huge scandal, but I guess everyone knows that drug companies rip us off. Besides, economists and media types are too busy worrying about unemployed workers getting too much money and not seeking jobs that don’t exist.

Dean Baker is a founder of the Center for Economic and Policy Research, which studies how economic policies affect the citizenry.

[crickets]

1. Good point to remember.

The patent monopoly means that we are paying Moderna twice. We first picked up the tab for the research and the testing. Now we are giving the company a patent monopoly so that it can charge people around the world as much as it wants for the vaccine.

Winning.