The Economics of Disease Eradication

The Economics of Disease Eradication

09.5.2013
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[This entry has been written by Fabrizio Tediosi (Swiss TPH) and Elisa Sicuri (ISGlobal). Drs. Tediosi and Sicuri are Faculty members of the Science of Eradication: Malaria course.]

In a context of renewed attention towards the eradication of communicable diseases and of stagnating financing for global health, economic considerations can provide useful indications for policy makers deciding whether to commit to national/regional elimination activities within a global eradication initiative.

Economic theory and analysis can help to address the following questions:

  • 1) Why eradicate?
  • 2) How to achieve eradication?
  • 3) For Whom?

1. Why eradicate?

Eliminating disease locally in order to achieve global eradication rather than simply controlling the disease may require high initial investment. To address the “Why” question, economic analysis compares costs with future economic and health benefits to provide a justification for choosing elimination over disease control activities. The impact of eradication is long term, and economic principles can help us to assess how much value to assign to future health and economic benefits and costs. In 1967, assuming a 3% discount rate for future benefits and costs, the global benefit–cost ratio for smallpox eradication was estimated to be up to 450:1, meaning that the return on investing $1 in smallpox eradication was up to $450. The choice of whether to discount future benefits and costs and the discount rate used have a significant impact on the return-on-investment estimates of eradication initiatives.

2. How to achieve eradication

Disease eradication is a global public good as it is not possible to exclude a country/community from the benefits of eradication and every country/community can benefit from it without limiting the benefit of others. In the absence of ad-hoc incentives, each country/community may choose not to cooperate in the eradication initiative and, thus, eradication may fail. Decisions are interdependent, making disease eradication a “game”. To address the “How” question, economic theory helps us to assess the feasibility of eradication by modelling the strategies stakeholders may use and the incentives required to foment cooperation. It assesses which intervention/s or strategy/ies should be adopted by which stakeholders; how to incentivise each country to participate; what resources would be required; and how resources could be mobilized. In the case of smallpox eradication, it has been shown that economic and game theory can explain the initial contribution made by the United States, the mandated contributions voted on by the World Health Assembly, and the fact that both actions lowered the financial (and to some extent psychological) threshold for other countries’ voluntary contributions.2

3. For Whom?

Regional/national elimination and eradication are likely to benefit the poorest communities, the subgroups of the population which do not usually benefit from disease control. To address the “For Whom” question, economic analysis assesses who would benefit from eradication, and the likely impact of the outcome in terms of equity and fairness.3 Elimination and eradication resolve the potential equity/efficiency trade-off inherent in the scale-up of health interventions, in which efficiency implies quickly providing access to the easy-to-reach groups (e.g. more affluent groups in urban areas) and equity implies specifically targeting resources to poor and vulnerable groups who might be harder and more costly to reach.4

An economic approach to disease eradication provides key evidence to inform decisions on eradication initiatives.  

References

1. Barrett, S., Eradication versus control: the economics of global infectious disease policies. Bull World Health Organ, 2004. 82(9): p. 683-8

2. Barrett, S., The smallpox eradication game. Public Choice, 2006. 130: p. 179-207.

3. Sabot, O., et al., Costs and financial feasibility of malaria elimination. Lancet, 2010. 376(9752): p. 1604-15.

4. Mangham, L.J. and K. Hanson, Scaling up in international health: what are the key issues? Health Policy Plan, 2010. 25(2): p. 85-96.