As the COVID-19 pandemic has thrown daily life, hospitals, and the financial markets into turmoil, researchers around the globe have begun the race to develop a vaccine.
Pharmaceutical industry expert Professor Frank Lichtenberg estimates that the value of a vaccine could reach into the trillions of dollars and says that the need for companies to innovate now is crucial for saving lives.
“Not only would a vaccine reduce mortality and hospitalizations, but it would have an incredible impact on economic activity and GDP,” says Lichtenberg, the Courtney C. Brown Professor of Business in the Economics Division. “The value of a vaccine would be incredible—much larger than anything I think we’ve ever seen.”
Lichtenberg has authored several papers on the research and development of new drugs, studying the effect they had on society between 1981 and 2013. To do so, he estimated how many years of life would have been lost if the medicines had not been developed and launched throughout the world.
“If you die at age 50 as opposed to 80, you’ve lost 30 years of life,” he says.
In one study of 27 countries, Lichtenberg estimated that, if no new drugs had been launched after 1981, the number of years of life lost would have been more than twice as high as it actually was. In a second study of 15 countries, he estimated that, in the absence of those drugs, total days of hospital care in 2015 would have been 163 percent higher than it actually was.
With those figures in mind, he says that to find the value of a vaccine, one must consider the magnitude of the COVID-19 crisis and think about it in terms of four burdens—mortality, healthcare, disability, and the economy.
Lichtenberg has not yet seen any estimates of years of life lost from coronavirus.
“There are some scary figures out there in terms of mortality,” he says. “At first, it was thought that this is primarily affecting older people, but now there’s evidence that younger people are also becoming very ill from it.”
As several experts have pointed out, COVID-19 could be overwhelming for hospitals and result in life-long disabilities for individuals.
“This could reduce your quality of life,” Lichtenberg says.
What is currently unknown is the ultimate impact of those burdens on future economic activity, which has been curtailed severely by social isolation.
“That’s why, if and when a vaccine is developed, which most people expect to happen in the next year and a half,” Lichtenberg says, “the value to society will be in reducing these other burdens, and allowing the economy to get back to normal. Or at least a new normal.”
Lichtenberg says it’s important that any new vaccine be fairly priced, but also that it is financially attractive for companies to invest heavily in research.
“Given how valuable this would be to the world, providing financial incentives to industry is important,” Lichtenberg says. “We need to develop a safe and effective vaccine as quickly as possible.”
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About the researcher
Frank R. Lichtenberg is Cain Brothers & Company Professor of Healthcare Management in the Faculty of Business Economics at the Columbia University Graduate School...Read more.