COVID-19 Vaccine Nationalism Could Cost $1.2 Trillion Globally
Research suggests global access to COVID-19 vaccines is best for both global health and finances.
In addition to preventing some countries from accessing vaccines for coronavirus disease 2019 (COVID-19), new research has found that nationalistic behavior by governments could cost the global economy up to $1.2 trillion per year.
The investigators defined “vaccine nationalism” as policies prioritizing their own citizens and insisting on first access to vaccines. These policies could involve signing deals directly with pharmaceutical companies and hoarding supplies, which could mean that immunizing only their own population would ultimately incur economic penalties.
“The study shows that a globally coordinated multilateral effort to fight the pandemic is key, not only from a public health perspective but also an economic one,” said lead author Marco Hafner in a press release. “If too many countries follow a ‘vaccine nationalism’ approach regarding the development, production, and distribution of COVID-19 vaccines, it could seriously hurt globally equitable access for those most at risk.”
Based on the study’s macroeconomic analysis, as long as the virus continues spreading in any part of the world, there will continue to be a global cost associated with COVID-19 and its prolonged negative impact on certain economic sectors. Even if only the lowest-income countries were denied equal access to a vaccine and all other countries immunized their populations, the investigators found that it could still cost the global economy $153 billion per year in gross domestic product (GDP).
Specifically, the authors found that the United States would lose $16 billion per year, the European Union would lose $40 billion per year, the United Kingdom would lose $5 billion per year, China would lose $14 billion a year, and other high-income countries would collectively lose $39 billion a year.
The investigators also noted that there are economic incentives to providing global access to vaccines. Based on previous estimates, it would cost $25 billion to supply lower-income countries with vaccines, compared with the $119 billion that the US, UK, EU, and other high-income countries would lose if the poorest countries were denied a supply. If these high-income countries paid for the supply of vaccines, there could be a benefit-to-cost ratio of 4.8 to 1, meaning for every $1 spent, high-income countries would get back about $4.80.
“Our findings suggest that there are real economic incentives for the higher income countries to drive vaccine development and distribution to ensure that the rest of the world has access to vaccines as soon as possible,” Hafner said.
To reach their conclusions, the authors compared the impact on global GDP of physical distancing and changes in consumer behavior in highly contact-intensive service sectors—such as hospitality, retail, and health care—to the global GDP of a hypothetical baseline scenario in which every country sufficiently immunizes its population so that physical distancing measures and regulations can be eased.
They also examined the economic cost if no vaccine is developed, finding that the global economic cost associated with COVID-19 could be $3.4 trillion per year in lost GDP.
“Given the substantial economic loss caused by COVID-19, investing heavily in the research and development and upscaling or vaccine manufacturing is key to finding a way out of the pandemic,” Hafner said.
COVID-19 ‘Vaccine Nationalism’ Could Cost the World Up to $1.2 Trillion a Year [news release]. Rand Corporation; October 28, 2020. https://www.rand.org/news/press/2020/10/28.html. Accessed October 28, 2020.