BENTONVILLE, Ark., Dec. 20, 2021 (GLOBE NEWSWIRE) -- Today, Heartland Forward released a new research report, Economic Savings in America: A Story of Public-Private Partnership in Rapid COVID-19 Vaccine Development and Deployment, estimating that the U.S. economy recovered more quickly in the amount of $438 billion in terms of 2021 real GDP, or 2.3% of real gross domestic product (GDP) than it would have without a vaccine. This enormous economic benefit was due to the unprecedented speed and efficiency of creating the COVID-19 vaccines and made possible through historic public-private partnerships between the federal government, academia and biopharmaceutical companies.
“After the health, economic and emotional devastation of the COVID-19 pandemic, our research helps shed light on a silver lining from the pandemic: the unprecedented speed and efficacy of the COVID-19 vaccines. Because of this, we estimate $438 billion in economic savings to the U.S. economy in 2021,” said Anusuya Chatterjee, director of health research at Heartland Forward. “While there is much uncertainty surrounding Omicron and future variants, with the proper tools and facilitation of this vaccine, we will continue to experience economic benefits. The U.S. should take lessons from the incredible public-private partnerships and deploy these strategies to address future crises.”
This report details the way that these vaccines and their ensuing economic benefit were made possible by America’s unique public-private partnership between government institutions like the NIH, academic institutions and biopharmaceutical companies. Thinking to the future, the report points to the delicate balancing act our policymakers have wrangling with lowering drug costs for consumers while maintaining incentives for investment in medical innovation.
In most instances, U.S. biopharmaceutical companies take tremendous financial risks to innovate and bring vaccines and therapies to the marketplace. According to a paper published in 2016 in the Journal of Health Economics on the innovation in the pharmaceutical industry, the research and development (R&D) costs of bringing a new product through the U. S. Food and Drug Administration (FDA) review process to market often takes more than 10 years and averages $2.6 billion. In addition, less than 12% of the candidate medicines that make it into Phase 1 clinical trials are approved by the FDA. To encourage and enable continued innovations by pharmaceutical companies, the federal government often steps up to support private companies. Government involvement usually takes place in the form of early-stage federal investments, namely through
the National Institutes of Health (NIH) and federally funded university research. In the case of the COVID-19 vaccine development, NIH scientists, in partnership with academia and private companies, created a prototype Coronavirus to study the spike protein, by building on the decades of U.S. government tax dollars spent on basic research facilities at NIH for HIV and other viruses.
The public-private partnerships, a foundation of vaccine and drug therapy development in the U.S., was critical to the rapid development and deployment of the COVID-19 vaccine. Policy changes that reduce incentives might prevent us from combatting the next pandemic and challenge our economy from getting back on track at the speed we have been able to thus far.
