The Economics of Immunizations

April 26, 2019 Rene F. Najera

The economics of immunizations

A few days ago, we posted about the measles epidemic in Madagascar and how the number of deaths had passed 1,200 cases, most of them children. One of the things that I found striking about the situation there is the cost of the measles vaccine. It is so expensive that families with several children often weigh which child will get the one vaccine dose they can afford. A family makes about $2 per day, with a vaccine dose costing upwards of $15. Imagine having to work more than two weeks to afford a single vaccine that can save your child’s life.

The economic advantages of immunization are very well known and researched. Families who don’t have to take time off from work to care for a sick child at home might not notice this since we humans don’t notice what doesn’t happen (and often amplify what does). I know that I’ve had to stay home at least three weeks’ worth of days in the almost two years since my child was born. One full week was due to respiratory syncytial virus, two other days with a random fever, another week with a flu-like illness, and a few more days with a double ear infection. And that’s just the non-vaccine-preventable things. I can only imagine if I had to stay home due to rotavirus, meningitis, whooping cough, measles, mumps, rubella, chickenpox, diphtheria, tetanus, pneumococcal disease… Or, worse, if I had to be in the hospital with her.

And I dare not think of her succumbing to those dangerous diseases, either.

As a result of us following the vaccination schedule as recommended, we have avoided some hefty financial hits. Because her daycare friends are also well-immunized, they have all benefited from community immunity (aka “herd immunity”). And it’s not just myself and my wife avoiding missed time from work. The parents of my daughter’s friends are also benefiting from following the advice of our licensed healthcare providers and vaccinating on time.

So what is the evidence of the financial benefits of vaccination? This paper by Quilici et al lays out a very interesting theory. In it, the authors posit that improvements in public health led to a more productive population that was healthier. In turn, that more productive population was able to afford even more improvements in public health, all in a self-feeding loop. They conclude:

“Health is a key factor for the promotion of economic growth at the national, regional, and global levels. The vaccine industry and vaccination programmes targeted at populations of different ages can contribute substantially to economic growth by keeping people healthy throughout their lives, with continuous investment in research & development to protect populations against an increasing number of existing or new vaccine-preventable diseases. There is a clear need for a commitment to vaccination not only from health authorities but also from governments. In particular, the finance ministries and treasuries of different governments need to assess how best vaccines and vaccination can make an efficient contribution to their national economic growth, and thus to European growth. As such, macroeconomic analyses offer a critical evaluation tool but are rarely used. Greater impetus and investment in their use is needed to provide evidence to determine the full economic value of vaccination.”

In a blog entry for the Harvard Medical School, Claire McCarthy, MD, summarizes the dollar costs for sick children at home and for hospital admissions due to vaccine-preventable diseases:

“There are also the costs that occur when parents must stay home to care for a sick child. According to the Bureau of Labor Statistics, the average hourly wage in the US is about $26 an hour. That means that every day off to care for a sick child is a lost $208 in wages, not to mention lost productivity.

It’s true that because vaccines are so effective, there are many fewer cases of vaccine-preventable diseases. This creates a “herd immunity,” meaning that the vaccinated people are protecting the unvaccinated ones; there are fewer of the germs around to catch. But there are still cases — and all it takes is a couple of $20,000 admissions for pertussis, $30,000 admissions for Haemophilus meningitis, or $37,000 heart surgeries for babies with congenital rubella syndrome, to show how vaccination makes good financial sense. And if fewer people vaccinate and the herd immunity breaks down, the costs will grow.”

Finally, in an article in Health Affairs, Stack et al echo the findings and opinions from above:

“This study found that the Decade of Vaccines’ expanded use of immunizations could save $7.4 billion (uncertainty range: $5.5–$10.5 billion) in acute care costs alone, including $6.2 billion ($4.8–$9.2 billion) in treatment costs. Adding long-term productivity gains resulting from immunization, averted costs are estimated to reach $151 billion ($130–$175 billion). These economic benefits are realized by saving 6.4 million lives, avoiding 426 million cases of illness, and saving 63,000 children from being disabled due to meningitis. This analysis adds to previous cost-effectiveness studies by providing both national and global decision makers with estimates of the tangible monetary benefits that could be accrued by increasing investments in immunizations over the Decade of Vaccines.”


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