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Privatization of COVID-19 Therapeutics and What It Means

Authored by Kaitlyn Lee


During the crisis of the COVID-19 pandemic, the U.S. government provided vaccines, treatments, and tests free of charge to protect and prevent hundreds of millions of people from contracting serious illness from COVID-19 [1]. However, as the national public health emergency declaration addressing the pandemic will expire on May 11th, the White House plans to transition COVID-19 therapeutics towards the private sector of the market [2, 3]. Medical companies such as Pfizer and Moderna have shared similar intentions, as they predict switching COVID-19 vaccines and drugs to commercial prices [2, 4]. Although the privatization of COVID-19 therapeutics provides benefits to these companies, it raises concerns for patients. Patients may become at risk of losing access and coverage for COVID-19 vaccines, treatments, and tests.


Privatization of COVID-19 vaccines gives Pfizer and Moderna an estimated collective vaccine market value of $12.9 million annually, with vaccines costing about $100 each [4]. Particularly for Moderna, an increase in price from $15 to $16.50 per vaccine during the pandemic will result in a profit of $8.2 billion for the company [4]. Biopharmaceutical companies can also access more distribution channels and use more marketing material to further promote their products [5]. While these companies profit off the market prices of COVID-19 vaccines, which provide funding for research and development of other prospective drugs and products, uninsured and underinsured individuals may either have to find low-cost COVID-19 vaccinations or not receive them once government-provided vaccines are consumed, exposing them to risk of more serious COVID-19 illness [3, 6]. Although most individuals will be covered by public and private health insurance for COVID-19 vaccines, private insurance companies will raise premiums in order to compensate for the rise in cost. In addition, individuals must also consider the vaccine administration fee, further raising the price tag of COVID-19 vaccination and creating a financial burden to those unable to afford it. 


For treatments and tests, their transition to the private sector comes with potentially more significant consequences regarding access and coverage [7]. COVID-19 treatment costs for medications such as Paxlovid, will be covered by private insurance companies, although there will be copayment and deductibles that consumers must pay [3]. Medicare plans to cover treatment costs until 2024; however, limited coverage is only available under Medicaid insurance for drugs not FDA-approved [3]. Furthermore, as states resume to determine Medicaid eligibility, which was paused during the pandemic, income and other qualifying factors may change, possibly resulting in 5 to 14 million enrollees losing Medicaid coverage [3]. Currently, public and private insurers are responsible for covering the price of eight at-home testing kits each month, but starting in May, many individuals with private insurance will have to pay out-of-pocket for rapid antigen tests. In addition, once federal supply is depleted, there may be insufficient tests and treatments due to lack of incentive by manufacturers to provide them amongst consumers [7]. 


According to Dr. Ashish Jha, the White House's COVID-19 Response Coordinator, the White House has created plans in order to smooth the transition of COVID-19 therapeutics to the market and ensure Americans have sufficient coverage and access to them [2]. For example, the United States Department of Health and Human Services obtained 170 million COVID-19 boosters provided for the 2022 fall and winter seasons [8]. The U.S. government also recently purchased 105 million Pfzier and 66 million Moderna booster doses to briefly add to federal supply [3]. Under guaranteed coverage of the Affordable Care Act, many Americans will still receive the COVID-19 vaccine for free. Dr. Jha also shares that the Biden Administration is currently working with drug companies and private health insurers to reduce out-of-pocket costs of COVID-19 treatments [2]. In fact, the government has already successfully shifted Bebtelovimab, an antibody treatment for COVID-19, and hopes to use similar processes to transition drugs such as Evusheld, a COVID-19 preventative treatment, and Lagevrio, an antiviral taken orally, within the next year [8]. 


COVID-19 therapeutic privatization comes with changes for various groups. Pharmaceutical companies will gain profits of millions of dollars to aid research and development of treatments and drugs. However, despite government efforts, Americans will still face issues regarding increased medical costs, loss of coverage, and limited access to COVID-19 therapeutics. Although the crisis of the pandemic has seemingly passed, vaccines, drugs, and tests are still needed in order to treat and prevent COVID-19. With transition of these medical necessities to the private sector, many individuals will be unable to obtain them unless further measures and policies are implemented to solve this issue. 




References

[1] Find COVID-19 vaccine locations near you. (n.d.). Vaccines.Gov. Retrieved March 1, 2023, from https://vaccines.gov

[2] News, J. A., (2023, February 16). Era of ‘Free’ COVID Vaccines, Test Kits and Treatments Is Ending. Who Will Pay the Tab Now? Scientific American, Kaiser Health. (https://www.scientificamerican.com/article/era-of-free-covid-vaccines-test-kits-and-treatments-is-ending-who-will-pay-the-tab-now/

[3] Tin, A. (2023, February 2). COVID-19 vaccines and treatments could go to private market this summer, White House official says. CBS https://www.cbsnews.com/news/covid-vaccine-treatment-private-market-white-house-official-says/

[4] Kansteiner, F. (2022, September 12). Moderna sizes up private COVID vaccine market in US. Fierce Pharma. https://www.fiercepharma.com/pharma/moderna-sizes-13b-covid-market-us-where-shots-could-cost-100-pop

[5] Liu, A. (2022, August 31). No more free COVID vaccines: US plots move to private market in 2023, setting up market clash between Pfizer and Moderna. Fierce Pharma. https://www.fiercepharma.com/marketing/no-more-free-covid-vaccines-us-plots-move-private-market-2023-potential-boon-pfizer

[6] Cox, C., Kates, J., Michaud, J. (2023, March 10). How Much Could COVID-19 Vaccines Cost the U.S. After Commercialization?. KFF. https://www.kff.org/coronavirus-covid-19/issue-brief/how-much-could-covid-19-vaccines-cost-the-u-s-after-commercialization/

[7] Cox, C., Cubanski, J., Kates, J., Pollitz, K., Tolbert, J. (2023, February 13). Commercialization of COVID-19 Vaccines, Treatments, and Tests: Implications for Access and Coverage. KFF. https://www.kff.org/coronavirus-covid-19/issue-brief/commercialization-of-covid-19-vaccines-treatments-and-tests-implications-for-access-and-coverage/

[8] O’Conell, D. (2022, August 30). COVID-19 Medical Countermeasures and the Commercial Marketplace. U.S. Department of Health & Human Services. https://aspr.hhs.gov/ASPRBlog/Pages/BlogDetailView.aspx?ItemID=440

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