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May 19, 2022

Federal money for Covid-19 vaccines is running out. What happens next?

Daily Briefing

    Although the federal government has so far provided Covid-19 vaccines and therapeutics to people free of charge, this will likely change in the future—and the transition to commercial purchasing could raise the cost of vaccines, as well as impact vaccine equity, Rachel Cohrs reports for STAT News.

    'We cannot underestimate the planning necessary'

    With the federal government running out of funding to purchase more Covid-19 vaccines, tests, and therapeutics, these products will likely transition to a more standard purchasing process through different health care system channels, including insurers and pharmacy benefit managers.

    However, experts and stakeholders told STAT News that FDA will need to grant full approval for the various Covid-19 vaccines and therapeutics before a transition to commercial purchasing can happen. Currently, the primary, two-dose vaccine series from both Moderna and Pfizer-BioNTech are fully approved, but vaccines for children, booster doses, oral antivirals, and other treatments are currently only authorized for emergency use.

    Karen Midthun, a principal at Greenleaf Health and a former director of FDA's Center for Biologics Evaluation and Research, said it will take some time before all the current Covid-19 products are fully approved. "Commercial sale can only happen for licensed and approved products," she said.

    In addition, fully approving some products, making them available for commercial purchasing, but keeping others under emergency authorization could further complicate the situation. According to Kurt Proctor, SVP of strategic initiatives at the National Community Pharmacists Association, this mix of emergency authorization and approval could complicate matters for pharmacists who may have to distinguish between near-identical products.

    In addition, new products, such as updated vaccines tailored to different variants, may also be initially authorized under emergency use, further complicating purchasing dynamics, Cohrs writes.

    According to Sara Roszak, SVP of health and wellness strategy and policy at the National Association of Chain Drug Stores, transitioning Covid-19 vaccines and therapeutics to commercial purchasing will be "deeply complicated," as leaders grapple with reimbursement policies, cost negotiations, logistics, and how to communicate changes to patients.

    "We cannot underestimate the planning necessary," Roszak said. "This is a massive undertaking that should not be undertaken lightly or hastily."

    How could the transition affect vaccine access and cost?

    Currently, health care providers and pharmacies receive Covid-19 vaccines for free and are paid by insurers to administer them. Previously, the federal government allowed providers to bill for vaccines administered to uninsured patients, but funding for this program ran out in March. According to Cohrs, if the federal government runs out of funding for vaccines, many patients, particularly those who are uninsured, could lose access.

    Going forward, public health experts said the federal government needs to enact policies to ensure cost won't be a barrier to vaccine uptake even if the vaccines transition to commercial purchasing.

    "We want to make sure the vaccine is accessible to everyone. You have to make sure when you make that shift, there's a safety-net infrastructure in place," said Claire Hannan, the executive director of the Association of Immunization Managers.

    Existing programs, such as CDC's Vaccines for Children program and a similar program for uninsured adults, could help shoulder some of the cost burden to increase vaccine access. In addition, there are cost-sharing programs for insured patients, but some of these programs will expire once the Covid-19 public health emergency officially ends.

    In addition, some pharmaceutical companies have indicated they will raise the cost of their vaccines once they are on the commercial market. For instance, Moderna CEO Stéphane Bancel said he expects Medicare reimbursement for the company's vaccine to be $60 in the future—much higher than the $16.50 per dose the federal government initially paid.

    According to Jonathan Gruber, an economics professor at the Massachusetts Institute of Technology, any price increase for the vaccines will also increase patients' insurance premiums, as well as cause taxpayers to pay more through Medicaid and Medicare.

    "Should there be a transition? The answer is no," Gruber said. "The government should be paying for the vaccine. The private market isn't going to get it right."

    Overall, many experts are concerned about how transitioning to commercial purchasing will affect vaccine equity and the government's ability to mitigate deaths as the Covid-19 pandemic continues.

    "This isn't business as usual. We have lost over 1 million people," said Ingrid Katz, an associate professor at Harvard Medical School. "We need to be sure we are removing as many barriers to vaccine access as possible, and putting equity at the forefront of any proposal on the table." (Cohrs, STAT News, 5/17)

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