SA’s total outlay for vaccinations could be no more than R8,6 billion

While South Africans are waiting with bated breath for the first vaccines to become available, there has been a lot of talk about the cost of the vaccine, and whether the country will be able to afford it.

The good news, according to an analysis by a group of scientists from Wits University, is that we can in fact afford it and they have done the math.

They have illustrated that the overall cost of all three phases of a vaccine roll-out in South Africa, based on the AstraZeneca (AZ) vaccine and Covax supplies, would be R7.4-billion, with an added R1.2-billion for nursing costs. This means a total outlay of R8.6-billion.

On the other hand, the total cost of the rival Pfizer vaccine would be R15.2-billion, which would bring the total to R16,4 billion when the R1.2 billion for nursing is added, they explain in the article which appeared in Daily Maverick.

Financial implications and feasability

In the article they examined and estimated the financial implications of a vaccine strategy with a goal of achieving herd immunity, taking into account the roll-out phases identified by the department of health and publicly available vaccine prices.

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When they considered the economic merits of the cost, they included the approximate loss of R389 billion in economic output due to Covid-19 in 2020, as well as “the dramatic deterioration in the fiscal position of government”. They said even the more expensive option is about half of the value of tax revenue lost on tobacco and alcohol last year, which was estimated at R35-billion.

Based on these facts, they said “it would be a false dichotomy to delay the implementation of a full-scale vaccination programme on the basis of affordability. It is also highly probable that many sources of funding outside of government can be mobilised to expedite implementation.”

The group also considered the financial feasibility and said that South Africa has the benefit of two large health systems: one financed by tax, and one financed by contributions to medical schemes. Together these systems achieve universal coverage.

It is therefore crucial that any further delays to the vaccine programme be removed and it be given the highest priority in government and the country. Without herd immunity, all countries will see periodic surges, mainly due to human behaviour and government interventions.

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Vaccination strategy

The researchers believe that for South Africa to derive advantage the country should implement a vaccination strategy at population level, to ensure sufficient immunity to avoid any resurgence.

Approximately 70% of the population must be immune or have a reduced risk of infection to have herd immunity, but the longer it takes to roll out vaccinations, the bigger the risk of a significant resurgence and the associated economic and social damage.

Pricing

They also identified two features of both systems that will determine the speed and efficiency of rollout, namely funding and administration of the vaccine to the entire adult population. In addition they analysed the range of vaccines based on their pricing to date and the evidence of efficaciousness and safety.

The three vaccines considered were Pfizer (two doses, found to be efficacious and safe), Johnson & Johnson (single dose, not yet approved by a regulator) and AstraZeneca (two doses, found to be efficacious and safe).

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According to the group, Johnson & Johnson and AstraZeneca have manageable cold chain implications and both can be kept in a normal household fridge, while the Pfizer vaccine requires storage at -70° Celsius, which could be a problem in South Africa.

When supply chain costs, assumed to be 25%, is added, the cost per regimen is the lowest for AstraZeneca at R145, followed by Johnson & Johnson at R181 and Pfizer at R362.50. Considering all the characteristics, the group agreed that the AstraZeneca vaccine is a good candidate for wider rollout because it is affordable, with the only challenge that it needs two doses.

Cost not prohibitive

Based on their analysis, the group said that the cost of a Covid-19 programme is far from prohibitive and could easily be financed by government on its own, private actors on their own, or a partnership between government and private actors.

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“It is clear that the Covax facility cannot address South Africa’s goal of achieving herd immunity timeously. Bilateral approaches are therefore urgently required to expedite a national rollout programme to begin as early as possible. The three phases as proposed by the DOH appear reasonable,” they said in the article.

They estimated that:

• Phase 1 would cost between R0.2-billion and R0.5-billion with a requirement for 2.5 million doses, assuming two doses per regimen
• Phase 2 ranges from R0.7-billion to R1.8-billion with a requirement for 10 million doses assuming two doses per regimen.
• Phase 3, which will take South Africa to herd immunity, is also affordable, ranging from R4.3-billion to R10.8-billion.

They also noted that almost all frontline healthcare workers are on medical schemes, which means that government does not have to fund their vaccines.

The researchers are:

• Alex van den Heever from the Wits School of Governance
• Shabir Madhi from vaccinology and director of the MRC Vaccines and Infectious Diseases Analytics Research Unit (VIDA)
• Francois Venter, deputy executive director of the Wits Reproductive Health and HIV Institute
• Imraan Valodia from development economics
• Martin Veller, from the department of surgery and dean of the faculty of health sciences

Prof. Lucy Allais from the department of philosophy and director of the Wits Centre for Ethics.

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