Moderna Moves Three Vaccines into Final Stage Trials as it Works to Rebound from Covid Slump (Micro News for March 23, 2024 – March 29, 2024)

Constantino, Annika Kim
CNBC.com

Link to the article

Posted 3/27/2024

Keywords

market efficiency, patents, prices, monopoly power

Current News Topic

# 3 Market Efficiency and Failure

Article Synopsis

Pharmaceutical firm Moderna, best known for its Covid-19 vaccine, announced it was entering the final stages of bringing three new vaccines to market. Moderna desperately needs new products since the Covid-19 shot demand has fallen and the firm has no other products on the market. The firm’s stock price fell by 45% during 2023 as a result.

However, Moderna’s new vaccine portfolio has a market potential of $52 billion. About $27 billion of that is for “respiratory vaccines” and another $25 billion for other products including latent viruses. Latent viruses may go dormant for years and then reemerge and cause serious health issues. Moderna’s three new vaccines, if approved, will address the norovirus, the Epstein-Barr virus, and a virus for common herpes.

Moderna also has five additional vaccines in clinical trials that appear promising. The firm benefited from funding from Blackstone Life Sciences that agreed to provide up to $750 million to fund further work on Moderna’s flu shots. Despite the promising news, these drugs are still not on the market and are not expected to generate revenue until 2025. However, Moderna’s stock price moved up by 3% after this news was released.

Exercise 1 Questions

1. Fill in the blank: A patent gives the inventor a monopoly on the invention for a period of ________.

2. Which of the following gives the owners exclusive rights to produce, sell, or license the output or protected image?
a. patent
b. copyright
c. trademark
d. all of these

3. Graphically show the impact on price when other drug companies introduce drugs that compete with a patented drug.

Exercise 2 Discussion Questions

1. How can a patent increase the market power of a firm?
NOTE TO INSTRUCTOR: Look up some recent patents of new products or product improvements and discuss the products in class.

2. How can competitors circumvent a patent?
NOTE TO INSTRUCTOR: Debate whether a 20-year time period is sufficient for inventors to recover their investments in time and money.

3. How do patents stimulate innovation?
NOTE TO INSTRUCTOR: Discuss the potential consequences of the U.S. government’s current intervention in drug pricing.