Moderna failed to disclose federal support in vaccine patents, researchers say

Moderna was founded in 2010 and has yet to win market approval of a drug. But its vaccine technology, which has been developed with a combination of U.S. taxpayer support and a large share of private investment, allowed it to be the first company to test its SARS-CoV-2 vaccine in humans.

With a boost of nearly $1 billion in research and development money from the Trump administration, it has initiated Stage 3 clinical trials in tens of thousands of people and is sprinting toward seeking an emergency-use authorization from the Food and Drug Administration before the end of the year. It also has a contract to sell 100 million doses to the United States for another $1.5 billion. The key protein used in the vaccine was co-invented by the National Institutes of Health.

Before those developments this year, Moderna honed its messenger RNA technology on vaccines against other infectious diseases, including Zika and Chikungunya. That research was supported with grants of about $25 million by the Defense Advanced Research Projects Agency (DARPA), according to the report by Knowledge Ecology International (KEI), a nonprofit group that advocates to protect taxpayer investments in patents.

Moderna has not listed that government support in any patents, despite a requirement in the 1980 Bayh-Dole Act that companies disclose in patent applications when they have received government help, KEI said. Moderna also has not disclosed government involvement in any of 154 pending patent applications, KEI's report said.

The company has disclosed its government funding to investors, in its filings with the Securities and Exchange Commission, including the registration for its record-setting 2018 initial public offering, as well as some scientific papers.

Lawmakers have increasingly scrutinized the high prices of drugs, especially when they were invented by government institutions or with government help, which is often the case through National Institutes of Health, Centers for Disease Control and Prevention, and Department of Defense grants and contracts.

Recognizing the government contribution in the patent also gives the government agencies a consistent means of tracking how government-sponsored inventions are being used and whether they are receiving royalties. The Government Accountability Office said in 2018 that agencies need to do a better job tracking how and when they exert licensing authority and extract royalties from taxpayer-funded inventions.

KEI sent a letter to DARPA on Thursday asking the agency to review Moderna's record and take action against the company. "To protect taxpayer investments, the funding agency should remedy the failure to disclose by at a minimum requiring a correction to the patent and more appropriately by taking title to the patents themselves, as the sanction for the failure to disclose,'' the group urged.

The government has never stripped patent rights from a pharmaceutical company under Bayh-Dole, so such as step is highly unlikely, especially since Moderna is working in a close partnership with Trump's Operation Warp Speed in a bid to halt the current pandemic.

Moderna did not respond to a request for comment. DARPA did not say what action it would take but said Bayh-Dole requires disclosure of government funding in patent applications and patents.

"DARPA and Moderna have a well-established and transparent relationship, and Moderna is required to comply with the terms of its funding agreement(s) and any of its subject inventions with DARPA,'' DARPA spokesman Jared Adams said in an email.

The news site Axios reported on Aug. 5, based on research by KEI and Public Citizen, that Moderna had not disclosed government funding in its news releases as required by government contracts. Axios reported that the Department of Health and Human Services subsequently reminded Moderna of its disclosure obligations.