The economic impact of vaccination: more than meets the eye

Emil Vergara

Early Stage Researcher 10, St. George’s University of London

October 2020

Across the globe, millions of doses of vaccines are administered to children, adults, and the elderly.  Vaccines work through preventing diseases caused by a variety of human pathogens, and serve as a cornerstone of a well-functioning and sustainable healthcare system. They are the most successful and cost-effective public health tools, having averted 2 to 3 million deaths worldwide each year (“Immunization”, 2020).

The benefits derived from vaccines can be viewed through different lenses. From a public health standpoint, vaccines are important at lowering the number of people who get infected by pathogens, reducing community disease transmission, decreasing disease burden, and preventing untimely deaths (Andre et al., 2008). From an economic viewpoint, vaccines and vaccination programmes are assessed through their cost-effectiveness as a healthcare intervention, and how they can be important drivers of economic growth. Indeed, empirical evidence showed that a strong positive correlation exists between good health and economic growth (Sharma, 2018).

Traditionally, the economic benefits of vaccines are measured through health gains, healthcare cost savings, and care-related productivity gains.

(1)    Health gains refer to the number of actual cases of diseases and deaths prevented using a specific vaccine. For instance, in the US alone, it was estimated that investment in childhood immunization prevented as much as 322 million cases of infectious diseases, 21 million hospitalizations, and 731,700 deaths between 1924 to 2013 (Largeron et al., 2015). In Europe, seasonal influenza vaccination prevents approximately 2.1 million cases, 65,600 hospitalizations, and 37,200 deaths, annually (Preaud et al., 2014).

(2)    Healthcare cost savings are the savings associated with a decrease in medical expenditure as a result of preventing illness episodes. As an example, studies have shown that In the United States, the diphtheria, tetanus, and pertussis (DTP) vaccine, which is given between 2 months to 7 years of age, has resulted in savings of US$23.6 billion. Based on this, it was projected that US$24 was saved for every US$ spent on the vaccine (Rémy et al., 2015). Similarly, a study in the UK demonstrated that vaccinating the elderly against seasonal influenza drove savings of up to €1.35 for every € spent (Scuffham & West, 2002).

(3)    Care-related productivity gains are savings of patient’s or caretaker’s productive time because vaccination avoids the need for care. For instance, when a working parent’s child contracts a vaccine-preventable disease, this leads to absence from work for several days due to the need to take care of the child. Such negative effects are magnified in households with lower incomes, especially in low- and middle-income countries (LMICs) where access to healthcare and social security is minimal or absent.

In the past decade, however, there has been a change in how the economic gains derived from vaccines are viewed. It is indeed true that traditional measures fail to consider the “overall” economic benefits of vaccines as there are parameters that are difficult to crunch down with numbers alone. As such, current perspectives on the economic evaluation of vaccines have been categorized into “narrow” and “broad” views (Bärnighausen et al., 2012; Quilici et al., 2015), with the former discussed in the previous section.

The “broad” perspective takes into consideration the wider economic impact of vaccines. This is categorized as outcome-related productivity gains, behavior-related productivity gains, and community externalities.

(1)    Outcome-related productivity gains relate to an increase in productivity as a result of greater physical and mental health due to vaccination, which drives school enrollment, attendance and attainment, among others. For instance, Hib meningitis, a vaccine-preventable disease, can cause permanent disabilities like deafness and intellectual disabilities in as much as 15-35% of survivors. Preventing the occurrence of such negative sequelae leads to healthy children which can have greater participation in education, later becoming more productive adults. In addition, preventing disease in working adults reduces absenteeism, enhancing productivity and contributes in turn to economic growth (Postma et al., 2015)

(2)    Behavior-related productivity gains are benefits that accumulate as a result of improvements in child health and survival, leading to changes in household choices such as lowered fertility rates (decreased children per household) and increased investments in education. Increased educational attainment is an important driver of social mobility, and populations that have greater access to education can better contribute to economic development (Sharma, 2018).

(3)    Community externalities are benefits that spill-over to unvaccinated members of the community as a result of vaccinating the general population. These include protection from the infection due to herd immunity, and a reduction in antibiotic resistance due to a decrease in the usage of antibiotic therapies (Buchy et al., 2020).

One striking example of how much economic impact a vaccine can have at a global scale is the eradication of smallpox as a result of the Intensified Smallpox Eradication Programme by the World Health Organization. Smallpox was responsible for as much as 300 to 500 million deaths, and countless more disabilities in the 20th century alone (Ochman & Roser, 2018). Additionally, approximately US$1 billion were lost by low-and-middle-income countries (LMICs) due to this viral disease. It was estimated that more than US$300 million was invested for the eradication of Smallpox. As a result of its eradication, numerous human lives were saved, and costs related to the purchase of vaccines, human resources, treatment and international surveillance activities were abrogated. Smallpox eradication drove savings of up to US$2 billion each year, which were then allocated to address other pressing health issues (Rémy et al., 2015). But more than that, the successful eradication of smallpox resulted in a ripple effect to many communities by improving the quality of peoples’ lives.

Healthy individuals are important drivers of social and economic growth. Through significant savings by avoiding the direct and indirect costs associated with treating diseases and possible long-term disability, the value of vaccines at large is something that should not be underestimated and cannot be taken for granted. True to old adage, prevention is better than cure.

REFERENCES:

  1. Bärnighausen, T., Bloom, D. E., Cafiero, E. T., & O’Brien, J. C. (2012). Economic evaluation of vaccination: capturing the full benefits, with an application to human papillomavirus. Clinical Microbiology and Infection, 18, 70–76. https://doi.org/10.1111/j.1469-0691.2012.03977.x.

  2. Buchy, P., Ascioglu, S., Buisson, Y., Datta, S., Nissen, M., Tambyah, P. A., & Vong, S. (2020). Impact of vaccines on antimicrobial resistance. International Journal of Infectious Diseases, 90, 188–196. https://doi.org/10.1016/j.ijid.2019.10.005.

  3. Largeron, N., Lévy, P., Wasem, J., & Bresse, X. (2015). Role of vaccination in the sustainability of healthcare systems. Journal of Market Access & Health Policy, 3(1), 27043. https://doi.org/10.3402/jmahp.v3.27043.

  4. Postma, M. J., Carroll, S., & Brandão, A. (2015). The societal role of lifelong vaccination. Journal of Market Access & Health Policy, 3(1), 26962. https://doi.org/10.3402/jmahp.v3.26962.

  5. Preaud, E., Durand, L., Macabeo, B., Farkas, N., Sloesen, B., Palache, A., Shupo, F., & Samson, S. I. (2014). Annual public health and economic benefits of seasonal influenza vaccination: a European estimate. BMC Public Health, 14(1), 813. https://doi.org/10.1186/1471-2458-14-813.

  6. Quilici, S., Smith, R., & Signorelli, C. (2015). Role of vaccination in economic growth. Journal of Market Access & Health Policy, 3(1), 27044. https://doi.org/10.3402/jmahp.v3.27044.

  7. Rémy, V., Zöllner, Y., & Heckmann, U. (2015). Vaccination: the cornerstone of an efficient healthcare system. Journal of Market Access & Health Policy, 3(1), 27041. https://doi.org/10.3402/jmahp.v3.27041.

  8. Sharma, R. (2018). Health and economic growth: Evidence from dynamic panel data of 143 years. PLOS ONE, 13(10), e0204940. https://doi.org/10.1371/journal.pone.0204940.

  9. Scuffham, P. A., & West, P. A. (2002). Economic evaluation of strategies for the control and management of influenza in Europe. Vaccine, 20(19–20), 2562–2578. https://doi.org/10.1016/S0264-410X(02)00154-8.

  10. Andre, F.E., Booy R., Bock H.L., Clemens J., Datta S.K., et al. (2008, February). Vaccination greatly reduces disease, disability, death and inequity worldwide. Retrieved from https://www.who.int/bulletin/volumes/86/2/07-040089/en/.

  11. Ochmann S., & Roser M. (2018). Smallpox. Retrieved from https://ourworldindata.org/smallpox#citation.

  12. Immunization.  (July 2020). Retrieved from https://data.unicef.org/topic/child-health/immunization/.

 

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