The economic case for scaling up health research and development: Lessons from the COVID-19 pandemic

Daniel Tortorice, Rino Rappuoli () and David E. Bloom
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Rino Rappuoli: b Fondazione Biotecnopolo di Siena , Siena 53100 , Italy
David E. Bloom: c Department of Global Health and Population, Harvard T.H. Chan School of Public Health , Boston , MA 02115

Proceedings of the National Academy of Sciences, 2024, vol. 121, issue 26, e2321978121

Abstract:

In response to the COVID-19 pandemic, governments directly funded vaccine research and development (R&D), quickly leading to multiple effective vaccines and resulting in enormous health and economic benefits to society. We develop a simple economic model showing this feat could potentially be repeated for other health challenges. Based on inputs from the economic and medical literatures, the model yields estimates of optimal R&D spending on treatments and vaccines for known diseases. Taking a global and societal perspective, we estimate the social benefits of such spending and a corresponding rate of return. Applications to Streptococcus A vaccines and Alzheimer’s disease treatments demonstrate the potential of enhanced research and development funding to unlock massive global health and health-related benefits. We estimate that these benefits range from 2 to 60 trillion (2020 US$) and that the corresponding rates of return on R&D spending range from 12% to 23% per year for 30 y. We discuss the current shortfall in R&D spending and public policies that can move current funding closer to the optimal level.

Keywords: vaccines; health economics; research & development; Group A Strep; COVID-19 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:nas:journl:v:121:y:2024:p:e2321978121

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