By Zachary Stieber
The U.S. government has released the licensing agreement it hammered out with vaccine manufacturer Moderna but has refused to confirm many payment details.
Moderna agreed to pay the U.S. National Institutes of Health (NIH) to license spike protein technology the company included in its COVID-19 vaccine, the contract confirms.
Moderna resisted for years acknowledging the work by government researchers on the spike protein but relented in late 2021 and announced the contract during an earnings call on Feb. 23.
Moderna said 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 says 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 contract, running 34 pages, has key sections redacted as to future royalties.
One section, for instance, says, “The licensee agrees to pay to the NIAID earned royalties on net sales … as follows.” But the rest of the section is redacted.
The Epoch Times obtained the contract through the Freedom of Information Act.
The NIH cited 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: 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 the National Institute of Allergy and Infectious Diseases, and Shannon Klinger, chief legal officer at Moderna.
The payments would include a royalty within 60 days after government officials provided 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 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.
The NIH shares ownership of the spike protein technology that Moderna utilized with researchers at Scripps Research Institute and Dartmouth University’s Geisel School of Medicine. Both are named as partners in the contract.
While it’s unclear from the contract what specific revenue the partners will receive from Moderna, Dartmouth said previously it would make money through the agreement.
Dartmouth said 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 did not respond to a request for comment and has not appeared to comment on the contract.
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 NIH be more transparent about the licensing.
Moderna CEO Stephane 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 due to 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.
“The NIH considers themselves coauthors of the vaccine. Do you disagree?” Sen. Bernie Sanders (I-Vt.) asked.
“Our team has been working on that discussion for quite a while. We have agreed to disagree. The team is following USPTO [U.S. patent office], which is very important, and what we have done to close the matter is we are 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.”