COVID-19 Vaccinations

December 17, 2020

COVID-19 Vaccinations

In the last two weeks, the U.S. has seen two vaccine approvals for COVID-19.  The FDA issued an Emergency Use Authorization for vaccines from both Pfizer and Moderna on December 11 and December 17, 2020 respectively.  This EUA allows distribution of the vaccines to happen immediately in the United States with health care workers receiving vaccines from both manufacturers just days after the authorizations for both were issued.

About the Vaccines

Both the Pfizer and Moderna vaccine report effectiveness of at least 95% with side effects of headache, muscle aches and fatigue.2

Pfizer will be distributing its vaccine directly and not through a wholesaler, largely in part due to ultra-sub-zero temperatures (-70° C / 158° F) needed to preserve the vaccine while in transport and storage.  Pfizer has specially designed temporary storage containers using dry ice that contain GPS and thermal sensors to track the location and temperature of the package while in Pfizer’s transportation network.2

The Moderna vaccine by contrast is reported to be stable at far less extreme conditions – for up to 6 months at -20°C / -4°F, up to 30 days in refrigerated conditions and for up to 12 hours at room temperature.  This increased stability will allow for storage in a wider array of settings such as physician offices, hospitals and pharmacies that do not have ultra-sub-zero storage capabilities. Moderna is working with McKesson, the wholesaler contracted by the U.S. Government, to distribute their vaccine.2

Vaccine Access and Availability

Pfizer plans to produce 40 million doses of its vaccine by the end of 2020.  The U.S. Government has entered an agreement with Pfizer to purchase 100 million doses of the vaccine with an option to purchase an additional 500 million.  While not yet approved, the U.S. has also agreed to purchase 100 million doses of Moderna’s vaccine, with 20 million to be delivered by the end of 2020.2

There are over 300 million people in the U.S. and with each vaccine requiring 2 doses to have full potency, the distribution of available vaccines will be prioritized to certain populations until the producers of the vaccine are able to increase output for wider distribution.2  U.S. officials were prepared to distribute the initial 6.4 million doses as soon as the vaccine was approved by the FDA on December 11, 2020.1

Vaccine distribution and availability will be rolled out in phases as represented below:

The CDC has not released details or dates regarding the projected timing of completion of vaccination phases.  Vaccination of Phase 1.a. individuals began almost immediately on December 14, 2020 when Sandra Lindsay, a critical care nurse in Queens, New York City, became the first person in the U.S. to receive the vaccine outside of participants in clinical trials.

Employer groups will all have some exposure to participants in Phase 1.  Certainly, those employers who are in the healthcare or essential areas listed above will see the vast majority of their respective populations vaccinated in Phases 1.a. and 1.b, while most all, if not all employers will see some portion of their plan’s membership fall into the high health risk category and be vaccinated in Phase 1.c.  The timing for the progression through the populations in Phase 1 and into Phase 2 is largely dependent upon vaccine production.  Most outlets are reporting that vaccinations for the general U.S. population (represented by Phase 2) will be widely available by late spring/early summer of 2021, with Lt. General Paul Ostrowski, the director of supply, production and distribution for Operation Warp Speed (the U.S. Government’s vaccine development and distribution program) stating in an interview that by June (2021), “100% of Americans that want the vaccine will have had the vaccine.”6

 

Vaccine Costs

As with any vaccination, there are two components to the total cost for the inoculation (1) the cost of the vaccine dose itself and (2) the cost of the administration of the vaccine.

Vaccine Dose Costs

Pfizer has reported that its vaccine is expected to cost $19.50 per dose.  With two doses needed for full effectiveness, the total cost of the vaccine is $39 per person vaccinated.  On the other hand, Moderna has reportedly priced its vaccine between $32 and $37 per dose.  Moderna’s vaccine also requires two doses, so the total cost is between $64 and $74 per person vaccinated.LHD’s assumption is that these cost figures are an accurate estimate of the cost employer plans will pay.

Administration costs

The Centers for Medicare and Medicaid Services have established fees to be paid under Medicare for COVID-19 vaccination administration at $16.94 for the first dose and $28.39 for the second dose for vaccines that need two doses to be fully effective.  Vaccines requiring only one dose will be paid at $28.39.2  Based on this information as well as a review of Vital Incite book of business information for other like vaccinations, LHD anticipates that employer plans will pay approximately $25 per dose for administration.

Employer Plans and Member Cost Sharing

Guidance released by the Centers for Medicare and Medicaid Services requires group health plans, both self-funded and fully-insured, to provide coverage for the COVID-19 vaccine with no member cost share, similar to other preventive inoculations.  During the COVID-19 Public Health Emergency this provision extends to out of network providers as providers are prohibited by the U.S. government from balance billing patients for the vaccine or administration of the vaccine.8

Phase 1 Vaccine Recipients         

Through funding provided in the CARES Act, the Federal Government has committed to cover the cost of vaccine doses for all persons receiving the COVID-19 vaccine(s) as part of Phase 1.  Employer-sponsored health plans of these individuals will only be responsible for paying the cost of administration of the vaccine.Assuming a cost of $25 per dose for administration, employer plans should expect to pay approximately $50 per participant vaccinated in the CDC’s Phase 1.

Phase 2 Vaccine Recipients

Employer-sponsored plans will be responsible for both the cost of the vaccine dose as well as the cost to administer the dose for those participants receiving the vaccine in phase 2.Because the cost of Pfizer and Moderna’s vaccines vary, employer plans should expect the cost to fully vaccinate (two vaccine doses and two charges for administration) a covered individual to range from $64 (Pfizer) and $124 (Moderna).

Closing

This summary has been compiled with the most up to date information possible.  The situation around COVID-19 vaccination is a fluid matter, with new information becoming available as the situation develops.  As previously mentioned, the timing of phased vaccination progression is largely dependent upon vaccine production and availability.

 

Citations:

  1. https://www.fda.gov/news-events/press-announcements/fda-takes-key-action-fight-against-covid-19-issuing-emergency-use-authorization-first-covid-19
  2. https://www.optum.com/content/dam/optum3/optum/en/resources/PDFs/covid-19_vaccine_update_and_optumrx_perspective_final.pdf?elq_mid=24421&elq_cid=2651939&elq_ck=7013x00000293EbAAI&elqTrackId=d1969494b71f4e33a7bf6e2a56ce92f7&elq=659dc15d41aa41e6a4bfb6e4ebda7abe&elqaid=24421&elqat=1&elqCampaignId=7931
  3. https://www.cdc.gov/vaccines/acip/meetings/downloads/slides-2020-12/COVID-02-Dooling.pdf
  4. https://www.cdc.gov/vaccines/imz-managers/downloads/COVID-19-Vaccination-Program-Interim_Playbook.pdf
  5. https://www.businessinsider.com/meet-sandra-lindsay-first-us-person-get-covid-19-vaccine-2020-12
  6. https://www.marketwatch.com/story/heres-when-most-americans-will-be-able-to-get-a-covid-19-vaccine-11607965758
  7. https://www.healthline.com/health-news/how-much-will-it-cost-to-get-a-covid-19-vaccine#Heres-what-the-government-has-spent-so-far
  8. https://www.cms.gov/files/document/COVID-19-toolkit-issuers-MA-plans.pdf
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