Cost-benefit analysis of a regional system for vaccination against pneumonia, meningitis type B, and typhoid fever

Abstract

In early 1989 PAHO began examining a proposal for a regional program that would develop and disseminate vaccines of particular interest to its Member Countries. As part of that examination, a cost-benefit analysis was performed. That general analysis, presented here, sought to point up key factors that would strongly influence whether or not the program's benefits outweighed its costs. The program's two fundamental components, vaccine development and vaccine administration, were evaluated separately. Using a discount rate (r) of 10%, 10-year vaccine development costs were estimated at US$80.3 million in constant dollars. It was felt that enough people (at least 19.5 million a year) would be vaccinated so that the program would benefit from economics of scale. The total discounted number of vaccinations administered over a 20-year period was expected to be in the range of 400 to 506 million. Using these figures, estimates were made of the maximum that could be spent on vaccine administration without exceeding anticipated benefits. Considering only treatment costs saved through vaccination, assuming all sick people were treated, the ceiling cost for vaccinating one person against one target disease would be in the range of US$0.52-0.58. Even if not all the sick were treated, however, the Regional Vaccine System (SIREVA) would still appear justified if the benefits per disease case prevented were found to average between US$1,000 and US$2,000. Even so, it should be noted that these estimates are subject to a good deal of additional variation because of uncertainties regarding the worth of many elements evaluated--including the costs of lost work time, disability, and mortality--and because some of the elements involved--such as pain, suffering, and death--fall outside the purely economic realm.