Exploring Commercial Coverage, Reimbursement for COVID-19 Vaccines

Norm Smith, principal payer market research consultant, predicts how payment and patient access strategies may shift once COVID-19 vaccines hit the commercial market and coverage requirements set during the public health emergency expire.

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Welcome back to PopHealth Perspectives, a conversation with the Population Health Learning Network where we combine expert commentary and exclusive insight into key issues in population health management and more. 

In this episode, Norman Smith offers insight into cost and access challenges related to the commercialization of COVID-19 vaccines.

My name is Norman Smith. I have been involved in the pharmaceutical business for over 40 years. In the last 37, I've managed market access. The last 20 years, I had my own company, Viewpoint Consulting, which was a market research company among payers and payer decisionmakers. 

In that role, I was a vendor to multiple companies with vaccines, everything from flu to pneumococcal pneumonia to some vaccines that are in the pipeline. So I've got exposure both on the payer side and on the vaccine side. My title was director of payer research, and that was expanded to just about any segment of health care, not just insurers and pharmacy benefit managers, but also hospitals and long-term care. Not particularly physicians, but more on the payer side.

In your opinion, how does the commercialization of COVID-19 vaccines compare to that of past health crises?

It's a unicorn. It's a one-off, because of the nature of the pandemic. I don't know of any product that came to market similar to the two RNA vaccines, and the vaccines from J&J, AstraZeneca, and Novavax. This wasn't really commercialization. This was more of the federal government saying we have a worldwide pandemic. 

In 256 days, both Moderna and Pfizer were able to come up with a product that would lower the chances of a person having a serious impact from COVID-19, at least from the Alpha and Beta strains. It became a little less effective as Omicron and other variants rolled across the country, but it still keeps people out of the hospital, and still keeps people at high risk from requiring more intensive health care. It's definitely one of the great successes of modern science in history.

COVID-19 vaccines are slated to be priced between $82 and $130 per dose once they enter the commercial market. How might this new price impact health plans and consumers?

Let's make sure we're talking about the same things. If the federal government and the Advisory Committee on Immunization Practices that works through the Centers for Disease Control and Prevention (CDC) were to eventually make the COVID-19 vaccines—I'm talking about a series of vaccine doses—if they were to approve that for the population of the United States, then it would be very similar to a number of other vaccines. 

The most obvious example is measles, mumps, and rubella (MMR). MMR has been around since 1982, and in most states, you can't get into school if you haven't been vaccinated against them. Those vaccines came to market very slowly. They're generally bought through the CDC and distributed in the private setting, but most of those vaccines are priced as less than 50% of what the list prices.

Now, let's remember, with any product, there'll be a list price and a net price. If there were health plans—and this may be in transition for a while—that had selected benefit programs that didn't cover vaccines, they still would be negotiating with both Moderna and Pfizer. 

Moderna in particular, having only one product on the market, would be more likely than Pfizer to make price reductions to get to the net price. So while $82 and $130 sounds like an awful lot, at the end of the day, because of those different methods of obtaining the products, I don't think we're going to be anywhere close to those prices.

After the public health emergency ends, how do you think payers will approach vaccine coverage and reimbursement?

The emergency is over in May 2023. There are a lot of ripple effects of that emergency being over, not the least of which is something that I've been involved with here in Philadelphia. There's a sizable cut in the extra funding from the federal government to people who were considered low income, as much as $89 per month, that families will get in supplemental benefits to buy food. As we've all noticed, we're in an inflationary period here, where food prices have been particularly hit. As we move from a pandemic to an endemic situation, there’s going to be a lot of activity in the next few months as the ripple effects of ending that emergency roll out across the country.

Payers have radically changed from where they were 30 years ago about vaccines, and you can see it today with pneumococcal pneumonia vaccines and with adult vaccines for a number of disease states that are covered by health plans automatically. If you walk into your neighborhood drugstore, you'll find out how many of those things, as an adult and as a Medicare member, would get reimbursed with no copay in most benefit designs.

What advice would you offer industry stakeholders hoping to address vaccine cost barriers for consumers?

For the next 2, maybe 3 years, there really won't be major cost barriers for consumers. If you are assuming a population of 330 million, there are not that many people in the United States that have no health insurance at all. There are some, and they're located in several states, and those people are going to have to be educated as to how they can get access to the vaccine for COVID-19. 

This is not just about COVID-19 vaccines for uninsured people, it's all forms of therapies. That's a big project for anybody to take on. That's going to be the barrier. It's not so much a vaccine cost barrier, it's a vaccine awareness barrier. It’s awareness that the product would be paid for. 

The final thing to remember here is COVID-19, unlike many other vaccines and other therapies, has emerged in the political side of the world. So you may have a number of people who are resistant to the use of the product. There's no real science-based, medical-based reason; it's a political reason.

Thanks for tuning in to another episode of PopHealth Perspectives. For similar content or to join our mailing list, visit populationhealthnet.com.

This transcript has been edited for clarity.