The True Costs of Pandemic Prevention and Response

At the end of May 2024, the World Health Assembly will vote on whether to adopt two legally binding World Health Organization (WHO) instruments: a new Pandemic Agreement and amendments to the International Health Regulations (IHRs). These policies have been designed to coordinate and standardize national-level pandemic preparedness, complementing other emerging pandemic preparedness initiatives such as the World Bank’s Pandemic Fund, the WHO International Pathogen Surveillance Network (IPSN), and the Medical Countermeasures Platform (MCP). 

There have been wide-ranging estimates regarding the cost of supporting these pandemic prevention, preparedness, and response (PPPR) instruments and how these costs can be financed. For example, the G20 High Level Independent Panel (HLIP) recommends global and country level investments of US$171 billion over five years, with an unspecified amount annually thereafter. The World Bank estimates that an additional US$10.3 to US$11.5 billion will be required to boost One Health as an accessory to PPPR.

An influential report written by McKinsey & Company estimated PPPR to cost anywhere from US$85 to US$130 billion over two years, with annual costs thereafter of US$20 to US$50 billion. The WHO and World Bank estimate that PPPR investment requires US$31.1 billion a year, including US$10.5 billion in official development assistance (ODA). The HLIP did not include several PPPR-related activities within its original estimate, such as addressing antimicrobial resistance (AMR), health system strengthening, and elements of manufacturing medical countermeasures. If these costs are included, then PPPR costs reach nearly a quarter of a trillion dollars over the first five years of this endeavor, with further investments required to maintain capacities thereafter.

REPPARE reviewed these estimates as well as the supplemental evidence and material provided by the WHO Secretariat in support of the International Negotiating Body (INB) for the Pandemic Agreement and International Health Regulation Working Group (IHRWG). Our analysis focused on the robustness of the cost estimations and whether the associated financial recommendations are justified as having appropriate returns on investment in support of the current pandemic preparedness agenda.

Four cross-cutting concerns emerged from the REPPARE analysis.

PPPR estimates lack reliability

The reliability of PPPR estimates is weak, since there is a general lack of accurate cost estimates for current pandemic preparedness at both the domestic and international levels due to poor monitoring, a lack of reporting, and inconsistent definitions about what actually constitutes pandemic preparedness. To compensate for this lack of evidence, the major PPPR documents over-rely on a small sample of case studies, a shortlist of academic studies, extrapolations from poor-quality datasets, and the use of loose estimates provided by McKinsey & Company.

Consequently, the primary cost estimates are based on just three reports which are self-referential and under-scrutinized, creating a circular evidence and citation base. For example, the HLIP relied upon a now unavailable 2021 WHO and World Bank report and the report from McKinsey & Company to calculate their PPPR financing estimates. The 2021 WHO and World Bank report relied on the very same McKinsey estimates. Yet, in an act of circular logic, an updated WHO and World Bank report, revised and re-released in 2022, then cites the HLIP report for validation of their cost estimates.

This circular justification creates a false perception of scientific rigor, counter-verification, and consensus. More worryingly, it results in potential “congeniality bias,” which is demonstrated by the fact that when distilled to an annual estimate for PPPR, all three reports coalesce around a surprisingly similar PPPR price tag of US$31.1 billion to US$35.7 billion (i.e. US$31.1 billion; WHO/World Bank – US$34.2 billion; HLIP – US$35.7 billion; McKinsey respectively). Usually, such a low margin between independent studies would suggest a high level of reliability in the estimates provided. However, in this case, given the incestuous nature of the sources used and the limited methodologies outlined, reliability and accuracy are undermined. As a result, there is a clear need for more robust PPPR baseline estimates as well as projected costs to fill identified gaps.

Unconvincing Justification for PPPR Value for Money

Claims made about PPPR value for money and return on investment are highly unconvincing. The investment models applied to justify PPPR used problematic, crude, or unexplained baselines for comparison while failing to properly examine wider impacts on economies and other disease burdens. For example, the documents uniformly assumed that PPPR measures could prevent 100% of the economic impact associated with a “covid-like” outbreak (although the HLIP did hedge its bet by later suggesting that it might be only 75%). This is highly doubtful, since preventing and containing zoonoses is extremely challenging and even minor outbreaks will produce some impact.

Moreover, and more concerningly, the models used Covid-19 as their comparative baseline, yet failed to disaggregate direct impacts resulting from the emergence of SARS-CoV-2 (hospitalizations, treatments, lost incomes due to illness) from indirect impacts resulting from society-wide policy responses that generated negative economic impacts (lockdowns, travel bans, fiscal injections, stimulus packages, etc.).

Given that the largest costs of Covid-19 are associated with social response measures such as lockdowns, the reports create a false impression of value for money and a strong return on investment. An alternative argument is that greater value for money would result from an appropriate and thoroughgoing review of the response measures used during Covid-19 to properly determine their efficacy and costs versus benefit. 

While return on investment is commonly used within the private sector, its use in public health is more challenging since monetising benefits is not straightforward and a variety of non-fiscal benefits can be included. The goal of return on investment is to translate the benefits of an investment into a single quantitative measure expressed in monetary terms, so its “value” can be directly compared with its cost. However, in the case of the PPPR documents reviewed, these challenges were further compounded by longtime horizons and the failure to acknowledge that contextual conditions will inevitably change, such as shifting global health burdens and new technological advancements.

An Unprecedented Cost Threatening to Absorb Global Health Financing

Even if the estimates for PPPR are correct, they represent a significant alteration in global health policy and would constitute anywhere from 25% to 55% of current ODA spend for health. Currently, the PPPR agenda has seemingly settled on estimates provided by the WHO and World Bank, which estimate the need for approximately $31.5 billion in total annual funding for PPPR, including US$26.4 billion in annual PPPR investments by low-and middle-income countries (LMICs) and US$4.7 billion required in new ODA funding to shore up international efforts. These estimates assume that 25% of existing ODA already covers international PPPR efforts and that LMICs will only require US$7 billion in additional ODA to fill national budget shortfalls. Thus, the total estimated ODA requirement for PPPR would be US$3.5 billion + US$7 billion = US$10.5 billion. 

This represents a disproportionate investment for an unknown future disease burden. For example, when compared to current trends in funding tuberculosis, where donor funding equals US$1.1 billion, but for a disease with an annual mortality rate of 1.3 million people. In terms of public policy, this defies traditional practices in public health, which would weigh any benefit of pandemic prevention against other disease burdens and health financing needs.

In addition, in 2022, global health received US$39.3 billion in ODA from governments and multilateral agencies. This number had significantly increased from pre-pandemic ODA levels, although the increase is largely explained by increases in funding for Covid-19 which made up a fifth of the total. If ODA for health remains constant at US$39 billion, then US$10.5 billion would equate to over a quarter of all health-related ODA. If post-covid ODA for health returned to pre-Covid levels (approx. US$22 billion in 2018), then PPPR would constitute over half of all ODA global health spending. 

The PPPR Estimates Pose Unrecognised Opportunity Costs with the Potential for Net Harm

The above costs raise an important concern; namely, they fail to consider the significant opportunity costs associated with the unprecedented investments being proposed by the WHO, the World Bank, and the G20 HLIP. Opportunity costs are important to any public health policy, since the estimated cost and financing requirements for PPPR pose the risk of redirecting scarce resources from global and national health priorities of greater burden. It is therefore vital that cost estimates are accurate and reliable.

Moreover, any investment cannot be determined in isolation but must be weighed against competing health, social, and economic priorities, since the recommended investments for pandemic preparedness carry broad implications for societal health. These reflections have not been considered nor weighed against other known global public health concerns.

Is a Guesstimate a Good Case for Investment?

There is a clear need to commission better global and country-level baseline and preparedness cost estimations to accurately determine the scale and potential trade-offs of proposed pandemic preparedness financing. To do so, a wider range of country case examples and primary data collection regarding current PPPR spend is required. This will better identify gaps and capture contextual variation and need. Furthermore, better evaluation of current regional and global-level PPPR activities and costs is necessary, since overlapping programmes and institutions pose problems of double-counting and the entanglement of financial flows.

Understanding relative disease burdens and economic impacts is also crucial for identifying the cost-benefit and return on investment from pandemic financing, as well as guiding the selection of interventions that promote good overall public health outcomes. Failing to take these wider issues into account carries the risk of overly expensive PPPR policies that deliver bad results.

Given the poor evidence underlying pandemic cost and financing estimates, it is prudent not to rush into new pandemic initiatives until underlying assumptions and broad claims of a return on investment are properly assessed. These must be based on robust evidence, recognized need, and realistic measures of risk. WHO Member States will be better served by having transparent estimates that reflect reality and risk before they engage in such an uncertain and high-cost endeavour. 

REPPARE pandemic finance report