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The U.S. government received hundreds of millions of dollars from vaccine manufacturer Moderna, according to a newly disclosed contract.
Moderna agreed to pay the U.S. National Institutes of Health (NIH) to license spike protein technology that the company used in its COVID-19 vaccine, according to the contract.
For years, Moderna resisted acknowledging the work by government researchers on the spike protein but relented in late 2021. Moderna announced the contract during an earnings call on Feb. 23.
Moderna stated that it provided a “catch-up payment” of $400 million to the National Institute of Allergy and Infectious Diseases (NIAID), which is part of the NIH, under the agreement.
The newly disclosed contract states that Moderna would pay the NIH a “noncreditable, nonrefundable royalty in the amount of Four Hundred Million dollars.”
Portions that would confirm Moderna’s statement that the company would pay “low single digit royalties” on future sales of its COVID-19 vaccines are redacted.
The 34-page contract, which The Epoch Times obtained through a Freedom of Information Act request, has key sections regarding future royalties redacted.
One section starts, “The licensee agrees to pay to the NIAID earned royalties on net sales … as follows.” But the rest of the section is redacted.
The NIH cited as the reason for the redactions an exemption to the act that enables agencies to withhold “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”
“They redacted the royalties, even though there have been press releases about the royalties,” James Love, director of the nonprofit Knowledge Ecology International, told The Epoch Times via email. “It’s common but [expletive] to redact royalties on a negotiated license on a government patent.”
Unredacted information in the contract confirmed that Moderna had agreed to pay the NIH royalties before the agreement took effect in late 2022, as well as a “minimum annual royalty,” “earned royalties,” and “benchmark royalties.”
The contract was signed on Dec. 14, 2022, by Michael Mowatt, director of the Technology Transfer and Intellectual Property Office at NIAID, and Shannon Klinger, chief legal officer at Moderna.
The payments would include a royalty within 60 days of government officials’ providing a “reasonable detailed written statement and request” for an amount “equivalent to a pro rata share of the unreimbursed patent expenses previously paid by the NIAID.”
Moderna has made nearly $37 billion from its COVID-19 vaccines during the COVID-19 pandemic. It has forecast $5 billion in revenue from the vaccines in 2023. Moderna and Pfizer both received enormous government contracts for their vaccines, which helped in development and manufacturing.
Shares Ownership
The NIH shares ownership of the spike protein technology with researchers at Scripps Research Institute and Dartmouth University’s Geisel School of Medicine. Both are named as partners in the contract.
Although it’s unclear from the contract what specific revenue the partners will receive from Moderna, Dartmouth stated previously that it would make money through the agreement.
Dartmouth stated that it plans to use the revenue to “strengthen the institution’s research and education enterprise and advancing work that has the potential to save millions of lives and improve global health.”
“We are excited about how these funds will amplify this important mission at Geisel and for how it will support our training programs for the next generation of biomedical researchers,” Duane Compton, dean of Geisel, said in a statement.
Scripps didn’t respond by press time to a request by The Epoch Times for comment.
The NIH received up to $2 billion in royalties from 34 drug contracts between 1991 and 2019, according to a report from the U.S. Government Accountability Office. The office recommended that NIH be more transparent about the licensing.
Moderna CEO
Moderna CEO Stéphane Bancel, whose net worth has skyrocketed during the pandemic, said in a recent appearance before Congress that Moderna created the spike protein technology in question but that the company abandoned the patent because of disagreements with the NIH.
“What our team did is develop the mRNA molecule. What the NIH did, which was a great confirmation, is they designed the same protein that our team did in parallel. The design of the mRNA vaccine was done by our team. This is our technology,” Bancel said.
Sen. Bernie Sanders (I-Vt.) asked, “The NIH considers themselves coauthors of the vaccine. Do you disagree?”
“Our team has been working on that discussion for quite a while. We have agreed to disagree. The team is following USIPO [United States Intellectual Property Organization], which is very important, and what we have done to close the matter is we actually have decided to abandon that patent,” Bancel said. “We have abandoned that patent, the NIH is aware of it, and we are moving on because we cannot agree on what happened. The mRNA molecule was designed by the Moderna team. It is our technology.”
Bancel was also asked by Sen. Rand Paul (R-Ky.) whether it creates a conflict of interest for government employees involved with vaccines to be making money off of them.
“It’s for the U.S. government to say how that money should be spent,” Bancel said. Pressed on the matter, he said, “This is for the government to decide.”
