Surprising Cost For Covid-19 Vaccine Administration - Forbes

On Valentine's Day, I was fortunate to get my first Covid-19 vaccine shot – Pfizer, of course. I was vaccinated at the Floyd Little Fieldhouse in New Haven which was set up by Yale New Haven Health. It was an excellent experience. The staff and volunteers were polite, helpful and well organized. The entire process took less than 30 minutes and that included the obligatory 15 minute wait after the vaccination to be sure that there were no immediate adverse effects. When I went back 3 weeks later, the process was just as efficient. Given a capacity of 1,400 people a day, Yale New Haven Health did a terrific job pulling this off.

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These vaccines are free to all patients, thanks to funding by the U.S. government which negotiated contracts with the Covid-19 vaccine makers that will supply enough vaccines to cover our entire population. Of course, these contracts came at a cost to the government, from $39 for Pfizer's two dose regimen, $32 for Moderna's regimen, and $10 for J&J's single shot. For perspective, the price of one's annual quadrivalent flu shot ranges from $35 - $41, with the more potent shot being almost twice as high. Given the crushing impact of Covid-19 on our health and economy, the price of the Covid-19 vaccines are more than reasonable.

Other costs related to the Covid-19 vaccination process had been a bit of a mystery to me, until I received my quarterly Medicare Part B summary, which contained the following information. Keep in mind that I was not billed for these charges.

Amount Facility Charged Medicare Approved Amount Amount Medicare Paid

1st Dose (Pfizer) $144.00 $144.00 $18.79

2nd Dose (Pfizer) $144.00 $144.00 $30.92

(The amount that the facility charges is, by Medicare definition, the facilities fee for this service. The Medicare approved amount is defined as the amount that the facility can be paid for a Medicare service; however, Medicare says that it usually pays 80% of the Medicare-approved amount.)

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I was first struck that Medicare actually paid a total of $49.71 for me to be vaccinated, significantly more than the $39 that Pfizer was paid for the vaccine itself. It is stunning that the company that risked $2 billion to develop, manufacture and distribute hundreds of millions of a life-saving vaccine is paid less than the organization that is giving the shots. Sure, setting up and staffing the Floyd Little Fieldhouse has its own costs. But, with 1,400 people getting vaccinated per day, this single site is being reimbursed by Medicare about $35,000 a day, seven days a week. That's not a bad financial return.

But, what is with "Amount Facility Charge" of $144.00? Is this what Yale New Haven Health believes is the "true" cost of providing this service? If that is the case, then this provider must believe that it is providing a "pandemic discount" to Medicare for the good of the country. That's great. But what happens in 2022, when the Covid-19 surges have subsided, but when there will still be the need for booster shots or perhaps next generation vaccines to treat Covid-19 variants? Will the $144.00/shot actually be charged? Even a price of $100/shot seems excessive.

Many have made the point that Pfizer and Moderna will generate billions of dollars in revenues from their Covid-19 vaccines. But, these vaccines are modestly priced with respect to other vaccines. (The price of the shingles vaccine, Shingrix, ranges from $160 - $200 at U.S. pharmacies.) Plus, we can tangibly measure the millions of lives these vaccines have saved. Of course, if you can't administer these vaccines, you haven't accomplished anything. These healthcare providers deserve to be compensated for their efforts. But, shouldn't the same scrutiny around pricing that has been given to the innovative drug companies also be applied to the healthcare systems giving the shots?