Economic considerations in allocating COVID-19 vaccines in the US

11 March 2021

Kirsten Axelsen / European Pharmaceutical Review

With more COVID-19 vaccines coming onto the market, an end to the pandemic is emerging. However, even with efforts to scale up production, the supply of vaccines will limit the speed of immunisation. This will require careful vaccine allocation to maximise social and economic benefits across the US. Several frameworks have been developed to guide vaccine allocation, including one led by the Center for Global Health Innovation (CGHI) Vaccine Economics and Equity Group (VEEG) in partnership with our team at Charles River Associates (CRA).1 The framework provides guidelines for COVID-19 vaccine allocation under conditions of scarcity that consider core public health and ethical principles in the context of optimal benefit for the US economy.

The first objective of ethical vaccine allocation is limiting harm to groups at high risk of mortality, including the elderly, people with underlying medical conditions and front-line care workers. From an economic perspective, protecting healthcare workers can help create other jobs as it facilitates care being provided to others, preserving finite healthcare resources and helping to mitigate the impact of the pandemic.

When vaccine supply is limited, there should be sub-prioritisation of healthcare workers based on the amount of time and contact required for patient care and the availability of personal protective equipment (PPE). For example, home health aides and nurses may be at greater risk than workers who do not have daily contact with patients. Social distancing and the use of PPE remain important even with access to an approved vaccine until broad herd immunity is achieved to continue to protect people at risk of contracting COVID-19.

The CGHI framework also seeks to invigorate a stalled US economy. As seen over recent months, some jobs are appropriate for remote or socially-distanced working, while others are not. A key component of the ‘reopening prioritisation’ requires a cost/benefit evaluation of the level of transmission risk based on the nature of work, including:

This approach builds on existing allocation frameworks but the criteria for COVID-19 vaccine allocation can be further assessed and refined based on the type of work, the value of the industry to the economy and the need to be proximate within each industry.

Economic value of different industries and jobs

Economic activity in various industries often has different effects on job creation. Industries vary in the job creation generated by their expansion in relation to supply chain impacts and through the purchasing power created by the wages paid. Generally, industries that require costly inputs, such as complex manufacturing, or that are labour-intensive or offer higher wages have a greater impact on job creation.

When assessing vaccine allocation, there is a need to trade-off the importance of the industry in job creation and the generation of economic activity with the ability to use social distancing and PPE to control viral transmission. Much of the work in the two largest US industries (finance/business and professional services), that account for 34 percent of gross domestic product (GDP), may be done with social distancing. Work in other large industries that generate significant job growth, including manufacturing, may not be done remotely and workers should therefore be prioritised for vaccination. It is important to consider that within an industry there may be sub-sectors better suited to the use of PPE and social distancing.

Other industries are critical for facilitating workers’ return to work, including education and healthcare. For example, if young children attend elementary school in person, it can allow parents (who may be balancing childcare at home) to work more productively. Parent participation in the workforce is less of an issue with older children who are often able to continue their education with social distancing and online learning. Reducing COVID-19 transmission through vaccination of formal and informal providers of childcare and education would likely have a meaningful economic impact and should be a priority to allow others to return to work.

The CGHI framework also recommends several additional vaccine allocation principles to maximise economic implications. These principles emphasise populations that have been most negatively impacted by the pandemic and cannot work or live productively with social distancing and PPE:

Workplaces where immunity can be achieved

Sectors of the economy that bring unvaccinated individuals together should ideally not re-open unless processes are in place to reduce transmission risk (eg, testing, social distancing, PPE and ability to contact trace). For example, allocating vaccines to industries such as live entertainment and indoor dining would protect workers but has the potential to create harm by gathering those who are not vaccinated. However, those workers should receive sustained financial support to mitigate economic harm.

Prioritisation based on vaccine uptake and data collection

There is significant variability between states and populations in vaccination rates for influenza. States can elevate rates through several policies, including providing convenient and trusted avenues for vaccination. Collection of data on available vaccines would also help address misinformation, which is a major risk to vaccine uptake. Consideration should be given to creating registries and other data tracking mechanisms, policies to encourage vaccination and refining the capacity to analyse related health data.

Mitigating the differential impact on low income and diverse communities

Any vaccine allocation framework should consider the risk of exposure, morbidity or death and how that varies among individuals. In the case of COVID-19, it has had a disproportionate impact on Black, Hispanic, Native American and low-income populations. Additionally, people who cannot socially distance at work are bearing significant costs, to themselves and the economy, due to the pandemic. Re-starting the stalled US economy will require people to feel confident working, buying goods and services and interacting socially. These ongoing personal and societal costs need to be considered when allocating approved COVID-19 vaccines.

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