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There were pieces covering a study about the rotavirus vaccine in the Seattle Times and Reuters last week (as well as a few others).
The main theme of this set of pieces is that more than 500,000 children die each year because of diarrhea. Diarrhea can be caused by a number of things, and rotavirus one of the key causes. The vaccine (if administered to all children) is predicted to save as many as 2,000,000 lives over the next decade.
So, what does that translate into? First, that means 200,000 kids each year could be saved.
Giving all children the vaccination would mean vaccinating 130 million children each year. This is a lot of vaccinations.
According to a CDC website, the lesser price for a rotavirus vaccination is approximately $7 per dose in the private sector. That is just for the vaccination--not including the cost of getting it to various places around the world, storing it properly, and administering it. In any case, even at just $7 per dose that would be $910,000,000 to save 200,000 children. In other words, $4550 per child saved. Given the number of years of life we are talking about for each child (as most children who die from diarrhea are under age 5) this does not seem like an unreasonable price to pay--even in lower income countries.
So what do we have to consider:
(1) Even at just $7 per dose plus transport, storage, and administration, this may still be expensive for some low income country governments and this will have to be considered carefully. Where will the money come from?
(2) How much is it worth to save a child? What price are we willing to put on life? Should we have to put a price on life? If we did not, how would we make resource allocation decisions?
Not easy questions to answer.
Lemon Zest, Turkish Apricot Scones
9 years ago
It reminds me a bit of the case study of Roy Vagelos in Michael Useem’s book of case studies of leadership moments. Vagelos, as research director at Merck, pursued development of a treatment for the parasite that causes river blindness in sub-Saharan Africa. He did it over shareholder opposition because it was the right thing to do. Everyone knew up front, that the people who needed the drug would never be able to pay for it. Later, when he headed Merck, he worked with NGO’s to test the treatment and to develop an efficient supply and distribution network. He observed once that developing and distributing the drug was the most important thing he had ever done.
ReplyDeleteOther questions that could be asked: will there be economies of scale that lower unit price as production is scaled to 130M kids per year? What is the “right” amount of profit to make on such a drug? Should shareholders be willing to return some profit in the form of social benefits? If so, why? What principle or ethical rationale might there be for this? What market forces would drive price to equal marginal cost if the drug is scaled for 130M doses per year? If there are no market forces, how should the drug be priced?
Your case study is really complex. It generated many questions for me. I was wondering if the following considerations were calculated into cost ($910,000,000)?
ReplyDelete• The two primary vaccines for Rotavirus include RotaTeq® (RV5) and Rotarix® (RV1) . They require numerous dosing. Does $7 reflect the all three doses? In addition, a more complex infrastructure is required to transport, store, administer, and track multiple doses – cost effectiveness will be incredibly different by region.
o The doses are recommended at these ages:
First Dose: 2 months of age
Second Dose: 4 months of age
Third Dose: 6 months of age (if needed)
• Rotavirus vaccine was found to prevent (85%-98%) rotavirus illness episodes that were severe and to prevent 74%-87% of all rotavirus illness episodes – Is there bio data on effect per region? This may also help determine context v. cost.
• Babies whose immune system is weakened because of HIV/AIDS, or any other disease that affects the immune system might not be candidates for the vaccine? How do we calculate that risk and cost? Again, certain regions will be much more highly affected by this problem then other areas of the world.
• Babies may be slightly more likely to be irritable, or to have mild, temporary diarrhea or vomiting- how does one include the cost of ‘convincing’ a reluctant population to accept the vaccine? We just did an H1N1 vaccine uptake study in TN for future planning—reluctance/behavior should be understood in order to develop a successful campaign.