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Economic Value of Treatment and Vaccine to Address the COVID-19 Pandemic: A U.S. Cost-Effectiveness and Budget Impact Analysis

39 Pages Posted: 1 Jun 2020

See all articles by William V. Padula

William V. Padula

University of Southern California - Schaeffer Center for Health Policy and Economics; University of Southern California - Department of Pharmaceutical & Health Economics; Johns Hopkins University - Department of Acute & Chronic Care; Monument Analytics

Shreena Malaviya

Monument Analytics; Johns Hopkins University - Bloomberg School of Public Health

Natalie M. Reid

Monument Analytics

Jonothan Tierce

Monument Analytics; Johns Hopkins University -Center for Drug Safety and Effectiveness

G. Alexander

Johns Hopkins University - Department of Environmental Health Sciences and Epidemiology; Johns Hopkins University - Department of Medicine; Monument Analytics

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Abstract

Background: The Novel Coronavirus (COVID19) has infected millions worldwide and caused hundreds of thousands of deaths. Many countries are fast-tracking the development of treatments and vaccines to address the pandemic. We sought to analyze the cost-effectiveness and budget impact of technologies for COVID19.

Methods: We constructed a Markov model of COVID19 infection using Susceptible-Exposed-Infected-Recovered (SEIR) structure over one-year from a U.S. societal perspective. The model consisted of four comparators: standard care, social distancing, COVID19 treatment or vaccine. Hospitalization and mortality rates were calibrated to U.S. COVID19 reports as of April 2020. We performed economic calculations of costs in 2020 U.S. dollars and effectiveness in units of quality-adjusted life years (QALYs) to measure budget impact and incremental cost-effectiveness at a $50,000/QALY threshold.

Findings: Treatments and vaccines have high probabilities of reducing healthcare costs and increasing QALYs compared to current alternatives. These options were also associated with reducing hospital-days and mortality by more than 50%. The budget impacts of these technological alternatives save costs on other comparators by over 90%, but represent major U.S. investments in the range of $12 billion to $66 billion.

Interpretation: Investing in disruptive vaccines or treatments to mitigate COVID19 infection offer high-value options societies should consider. Unusually high uptake in these technologies in a short amount of time by patients and consumers could result in unprecedented budget impacts to government and commercial payers. Governments should focus on expanding health system infrastructure and subsidizing payer coverage to deliver treatments or vaccines efficiently within the next 12-24 months.

Funding Statement: William Padula is supported by an unrestricted grant from the U.S. National Institutes of Health (KL2 TR001854). William Padula and Shreena Malaviya are supported by a grant in vaccine economics from the Bill & Melinda Gates Foundation.

Declaration of Interests: William Padula has served as a paid advisor to Molnlycke Health Care and is a Principal at Monument Analytics, a health care consultancy whose clients include the life sciences industry as well as plaintiffs in opioid litigation. This arrangement has been reviewed and approved by University of Southern California in accordance with its conflict of interest policies. Shreena Malaviya is an employee of Monument Analytics. Natalie Reid is an employee of Monument Analytics. Jonathan Tierce is an employee and co-founding Principal at Monument Analytics. G. Caleb Alexander is past Chair of FDA’s Peripheral and Central Nervous System Advisory Committee; has served as a paid advisor to IQVIA; is a co-founding Principal at Monument Analytics; and is a member of OptumRx’s National P&T Committee. This arrangement has been reviewed and approved by Johns Hopkins University in accordance with its conflict of interest policies.

Keywords: Coronavirus; COVID-19; Infectious Disease; Cost-effectiveness analysis; Economic Evaluation

Suggested Citation

Padula, William V. and Padula, William V. and Malaviya, Shreena and Reid, Natalie M. and Tierce, Jonothan and Alexander, G. Caleb, Economic Value of Treatment and Vaccine to Address the COVID-19 Pandemic: A U.S. Cost-Effectiveness and Budget Impact Analysis (4/22/2020). Available at SSRN: https://ssrn.com/abstract=3586694 or http://dx.doi.org/10.2139/ssrn.3586694

William V. Padula (Contact Author)

University of Southern California - Department of Pharmaceutical & Health Economics ( email )

Los Angeles, CA
United States

University of Southern California - Schaeffer Center for Health Policy and Economics ( email )

635 Downey Way
Los Angeles, CA 90089-3333
United States

Johns Hopkins University - Department of Acute & Chronic Care ( email )

Baltimore, MD
United States

Monument Analytics ( email )

Baltimore, MD
United States

Shreena Malaviya

Monument Analytics

Baltimore, MD
United States

Johns Hopkins University - Bloomberg School of Public Health

615 North Wolfe Street
Baltimore, MD 21205
United States

Natalie M. Reid

Monument Analytics

Baltimore, MD
United States

Jonothan Tierce

Monument Analytics

Baltimore, MD
United States

Johns Hopkins University -Center for Drug Safety and Effectiveness

615 North Wolfe Street
Baltimore, MD 21205
United States

G. Caleb Alexander

Johns Hopkins University - Department of Environmental Health Sciences and Epidemiology ( email )

Baltimore, MD 21205
United States

Johns Hopkins University - Department of Medicine ( email )

720 Rutland Avenue
Baltimore, MD 21205-2196
United States

Monument Analytics ( email )

Baltimore, MD
United States

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