Economic value of vaccines to address the COVID-19 pandemic: a U.S. cost-effectiveness and budget impact analysis

William V. Padula, Shreena Malaviya, Natalie M. Reid, Benjamin G. Cohen, Francine Chingcuanco, Jeromie Ballreich, Jonothan Tierce, G. Caleb Alexander

Research output: Contribution to journalArticlepeer-review


Aims: The Novel Coronavirus (COVID-19) has infected over two hundred million worldwide and caused 4.4 million of deaths as of August 2021. Vaccines were quickly developed to address the pandemic. We sought to analyze the cost-effectiveness and budget impact of a non-specified vaccine for COVID-19. Materials and Methods: We constructed a Markov model of COVID-19 infections using a susceptible-exposed-infected-recovered structure over a 1-year time horizon from a U.S. healthcare sector perspective. The model consisted of two arms: do nothing and COVID-19 vaccine. Hospitalization and mortality rates were calibrated to U.S. COVID-19 reports as of November 2020. We performed economic calculations of costs in 2020 U.S. dollars and effectiveness in units of quality-adjusted life years (QALYs) to measure the budget impact and incremental cost-effectiveness at a $100,000/QALY threshold. Results: Vaccines have a high probability of reducing healthcare costs and increasing QALYs compared to doing nothing. Simulations showed reductions in hospital days and mortality by more than 50%. Even though this represents a major U.S. investment, the budget impacts of these technologies could save program costs by up to 60% or more if uptake is high. Limitations: The economic evaluation draws on the reported values of the clinical benefits of COVID-19 vaccines, although we do not currently have long-term conclusive data about COVID-19 vaccine efficacies. Conclusions: Spending on vaccines to mitigate COVID-19 infections offer high-value potential that society should consider. Unusually high uptake in vaccines in a short amount of time could result in unprecedented budget impacts to government and commercial payers. Governments should focus on expanding health system infrastructure and subsidizing payer coverage to deliver these vaccines efficiently.

Original languageEnglish (US)
Pages (from-to)1060-1069
Number of pages10
JournalJournal of Medical Economics
Issue number1
StatePublished - 2021


  • COVID-19
  • budget impact analysis
  • coronavirus
  • cost-benefit analysis
  • cost-effectiveness analysis
  • drug pricing
  • infectious disease
  • treatment
  • vaccine

ASJC Scopus subject areas

  • Health Policy


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