Health economics: The value of vaccinations

Mar 10th, 2011 12:36 PM UTC
By ONE Partners

Anushua Sinha, an assistant professor at UMDNJ-New Jersey Medical School, explains why investing in vaccines is a good idea.

A frequent debate in economic development is how best to make a lasting, positive impact on a low-income country. Not just a quick infusion or a project of limited scope, but a way to permanently raise the baseline of a country’s potential. The evidence continues to demonstrate that investing in health — and specifically in vaccines — is a big part of the answer. It turns out that an ounce of prevention being cheaper than a pound of cure is not merely an adage, but a fact.

It is sometimes difficult to understand how a vaccine costing perhaps US $10 per dose in low-income countries could make economic sense, when a routine immunization can cost less than that for six basic vaccines. But it is not the price that is the sole factor to be considered — the burden of disease and the vaccine’s impact on the disease are other parts of the equation. Where children are at the highest risk of contracting disease and succumbing to it, investment in preventing disease can be highly cost-effective for poor countries, even at higher prices.

How are health and economics connected? Increasing life expectancy in a country by just one year improves labor productivity by four percent, according to a 2005 report published by David Bloom and colleagues in World Economics. The study, which was cited by the Economist, estimated that the rate of return on vaccination stood at 12 percent in 2005 and would rise to 18 percent by 2020. Hans Rosling at the Karolinksa Institute similarly demonstrated in his presentation at the 2010 TED Talks that decreasing child mortality offers the best hope of lifting countries out of poverty.

The value of vaccines is often not fully appreciated because traditional cost-effective calculations underestimate the broader benefits. For example, some analyses weigh whether or not a child survives into adulthood, but fail to differentiate between a vaccinated child who never got sick and an unvaccinated child who survived a disease but suffered resulting physical or mental handicaps. Additional benefits that escape many studies include the fact that improved child survival rates may allow families to have fewer children and thus spend more resources on each of them, and that even unvaccinated community members are healthier courtesy of “herd immunity.”

Vaccines are both a great health success story of the twentieth century and the looming, unwritten chapter of the twenty-first. Since World War II, vaccines reduced the annual number of measles deaths from 6 million to fewer than 1 million, polio deaths from 300,000 to 2,000, and wiped smallpox off the face of the planet. But each year, 3 million children’s lives are still lost to vaccine-preventable causes. Pneumonia and diarrheal disease are the worst offenders but bringing them under control will require investments both to increase vaccinations and to treat the diseases and their causes.

The World Health Organization’s recommendation to focus a reasonable share of global health efforts towards pneumonia and diarrheal disease vaccination is not solely based on the diseases’ dubious honor as the top two killers of children under five. Tackling these diseases also offers low-income countries the most “bang for the buck.” For example, through the Advance Market Commitment—a financing mechanism that can hopefully one day be duplicated to take on other diseases— low-income countries can now purchase pneumonia vaccines for less than US $1 per child, with donors picking up the remainder of the $10 tab.

Pneumonia and diarrheal diseases are certainly not the only challenges in global health, nor are vaccines the only intervention needed to defeat them. But, in 2011, we are in a position where the leading killers of children are, in fact, preventable by safe and existing vaccines. And, equally important, the affordable price per dose allows countries to take on the cost themselves and deliver it to families for free — which is crucial since the poorest segments of the population are being hit hardest. Challenges will arise; challenges arise whenever change occurs. But with these answers at our fingertips and millions of young lives in the balance, it just doesn’t seem right not to try.

Anushua Sinha is an assistant professor at UMDNJ-New Jersey Medical School with a background in cost-effective analyses of vaccine-preventable diseases.

TAGS: ONE, Power of Vaccines, vaccines