The Coronavirus Billionaires: Are the Taxpayers Getting a Fair Deal?    
​[Thursday, July 30, 2020]
The pandemic has created enormous wealth for Moderna, Novavax, and several other companies developing vaccines and treatments for the virus, much of it at the taxpayer’s expense, so it’s a fair question to ask, what the public “investors” are getting in return. Short answer, not much. Companies often use the cost and risk of developing their products as justification for the price of their products but if the cost and risk is borne by the public, should the public not also reap the rewards from these “investments”? But that is not how it works. The money from the government is not received as an “investment”, but as a “grant”. Meaning it is completely devoid of any expected returns. Although the details of the “deal” the government made with these companies to give them billions of dollars are secret, a few things are apparent. The US government will not own any equity or management of these companies. The recipients of the public money stay free to run their companies as they want, and keep the profits generated from their products developed with the public money, with themselves. And it is not just the money they receive; the entire machinery of the government: NIH, FDA, CDC, VA, BARDA, and DoD are working hard to make these vaccines successful. In fact, thanks to the government grants both Moderna and Novavax are at more than 10 times their valuation compared to right before getting these grants. There is no doubt that the government had to actively participate in several development efforts to address the national emergency, but should the government not make a better deal for the people so when these companies profit, the taxpayers get a return like any average investor? This is in stark contrast to other countries. Germany took 22% stake in CureVac to give them public money, the Chinese and Indian governments similarly got guarantees for free vaccines from their grantees. On top of that, both Moderna and Novavax have never produced a single working vaccine in their decades of existence in business and there is no debate that these Covid vaccines could not have been developed without financial and logistical support from the government. Once these vaccines are developed, these companies will sell their vaccine to the US government at a profit. With guaranteed sale of millions of units of their vaccines, the companies are set to make billions in profits. And all that with practically no risk to them and no obligation to return the money back to the Treasury or even to give their vaccines for free. Both Moderna and Novavax have refused to commit to give their vaccines at no profit. If the vaccines fail, the grant money will disappear with no accountability. In fact, this is not the first time Moderna and Novavax have received ungodly amounts of public money. Both companies have received hundreds of millions of dollars in grant money in the last decade alone with nothing to show for it. But is it their fault that despite their failures, the government keeps giving them more money? The government turned these companies into unicorns but is missing at the end of the rainbow. Moderna and Novavax are not the only ones who got such grant; only the starkest examples of the system that needs a second look. Who is responsible to protect the financial interests of the major “investor”, the public, in these deals? Apparently not the public servants who sign off on these deals. To say the public benefits by getting a vaccine is not a fair statement because the public would have gotten the vaccine irrespective of who paid for developing it. The public deserves to be treated like an investor. If the government was going to pay for everything, it should have owned it. There are mechanisms whereby the government can acquire technologies in national interest. The same companies would have offered significant chunks of their ownership to another investor for smaller funds, so why not us, the taxpayers? And why are these deals made with no transparency? All good questions: the answers are probably even more interesting.