The COVID-19 Vaccine Is Expensive, but the Cost of Not Vaccinating Is Even Higher
Most people won’t pay out of pocket for their COVID-19 vaccine, but that doesn’t mean the pandemic prevention is free.
Rolling out and supplementing the cost of the vaccines has a price tag in the tens of billions. But the uneven pace of global distribution could result in a worldwide economic cost of $4 trillion, according to a new report from the University of Maryland and the National Bureau of Economic Research.
That number, to put it in perspective, is higher than the combined gross domestic products of Italy and Canada. And it underscores, noted researchers, “the importance of making the vaccine globally available, not from a moral standpoint but from an economic one”.
The distribution of various vaccines for coronavirus have been more prevalent in richer countries than poorer ones. And in a global community, that could cause problems – a theory that prompted researchers to look at the potential impact of the disparate rollout.
“The economic interdependencies of countries imply that the economic drag in one country has immediate grave consequences for the others,” researchers wrote. “The economic losses of the pandemic can only be mitigated through a multilateral coordination ensuring the equitable access of vaccines, tests and therapeutics. … An equitable allocation of vaccines can produce significant economic benefits for the world economy.”
The study looked at the international interdependency of 35 industries, as well as the COVID-19 infection rate in each connected country. After determining the cost of continued disrupted trade as well as the increased output of a healthy workforce, the researchers found that if wealthy nations are fully vaccinated by the middle of the year, as many hope to be, but developing nations are only half-vaccinated, it could result in a global economic loss of $4 trillion.
(It could be worse. Not vaccinating at all would run up $9 trillion in losses.)
It comes down to trading partners. Advanced economies work with developing ones to get materials used in products (for instance, some auto glass is made in China or Mexico, even if the vehicles are assembled in the U.S.).
“World Health Organization (WHO) Director Dr. Tedros Ghebreyesus and the President of the European Commission Dr. Ursula von der Leyen noted that ‘None of us will be safe until everyone is safe’,” said the authors. “Our findings extend this argument to the economies by showing that no economy fully recovers until every economy recovers.”
The bulk of whatever the financial impact might be seems likely to be shared by four regions, according to the paper – the U.S., Canada, Europe and Japan. Collectively, they would absorb half of the impact of global trade disruptions, regardless of their own vaccination levels.
Of course, even wealthy countries are hitting some roadblocks when it comes to the COVID vaccine. Appointments are still hard to get across much of America and winter weather has caused some shipment delays. Perhaps more concerning are the people who get one dose of the Moderna or Pfizer vaccines and never show up for the second, significantly impacting the effectiveness of the drug.
Michael Dowling, CEO of Northwell Health, told CNBC recently that roughly 3% of the people they’ve given vaccinations to did not come back for the second. And some 3,500 people are more than 42 days late for the second dose.
That said, the U.S. is making good progress in the vaccination effort. As of March 10, 127.9 million doses had been delivered and 95.7 million doses had been administered, according to the Centers for Disease Control and Prevention. Over 33 million people have already received both doses, making up nearly 10% of the population.
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