After Giving Them Billions, The US Government Wants To Bail Out Moderna

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Moderna CEO Stephane Bancel will testify Wednesday before the Senate’s top health committee. The federal government has generously offered to bail Bancel’s company out of a patent infringement suit.

Wednesday’s Health, Labor, Education and Pensions Committee hearing will be used to ask Bancel questions about drug prices. This is after Moderna proposed quadrupling its COVID-19 shot price. Independent Vermont Senator Bernie Sanders and Republican Louisiana Senator Bill Cassidy are both long-standing advocates for lower drug prices.

The Biden administration’s involvement in ongoing litigation regarding patent infringement has not received as much attention as the issue of vaccine pricing. Moderna is currently fighting a lawsuit filed by Genevant Sciences and Arbutus Biopharma, two small biotechnology companies that claim Moderna stole their technology in developing its COVID-19 vaccine.

Moderna generated $18.4 billion revenue in 2021, and $19.2 trillion in 2022. The lucrative vaccine contract drove a significant increase in the company’s revenues from roughly $800 million in 2020. Bancel received a handsome salary and stock sales, as well as other forms of payments, totaling more than $400 million.

Arbutus, Genevant claimed that Moderna violated their patents for lipid-nanoparticle technology. This technology took their scientists years to perfect. The companies could receive royalties from Moderna if the lawsuit is successful. This could be a significant amount of money.

Many of the funds came from American taxpayers. COVID-19 vaccines, which were used to prevent almost all of the pandemics, were directly purchased by the U.S. government. They were then distributed free to anyone who needed them. Moderna was also awarded nearly $2.5 billion by the government to finance vaccine development.

The Biden administration now wants to give the company another chance. The Department of Justice (DOJ), which filed a statement of interests in the Moderna lawsuit last month, offered to assume liability for the company’s alleged patent violation. This would make Moderna’s lawsuit more likely to result in the Treasury Department taking on the liability for any potential damages.

Moderna, following opposition from Democratic lawmakers to the price hike, announced that it would offer its COVID-19 vaccine at no cost to the underinsured and uninsured the day after the statement of interest was filed.

Moderna’s defense isn’t that Moderna didn’t steal critical technology. The company claims that the U.S. government is responsible for the lawsuit because it funded the purchase and development of the product.

Moderna’s motion for dismissal was denied by U.S. District Judge Mitchell Goldberg, despite the DOJ agreeing with the taxpayers. Moderna had not proven that the shots were taken “for the government” and that they were for the government’s benefit.

The legal battle continues. It is not clear why the Biden administration offered to save Moderna, if it had stolen key technology. It is not clear if the offer by the government to transfer the bill to American taxpayers was connected to Moderna’s sudden decision for free vaccines.

It is not yet clear if Bancel will be asked about the topic Wednesday. He is also expected to be quizzed by lawmakers about other allegedly questionable business practices that contributed to his billion-dollar company’s success.