Canadian Underwriter

Global economic loss from potential pandemics could average more than US$60 billion per year, new report says

January 15, 2016   by Canadian Underwriter

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Infectious disease outbreaks that turn into epidemics or pandemics could cause trillions of dollars of damage to economic activity and kill millions of people, said a report released this week by the international independent Commission on a Global Health Risk Framework for the Future.

The Commission recommends an investment of approximately US$4.5 billion per year to enhance pandemic prevention, detection and preparedness

The Commission estimated the global expected economic loss from potential pandemics could average more than US$60 billion per year. “Yet, nations devote a fraction of the resources to preparing, preventing, or responding infectious disease crises as they do to strengthening national security or avoiding financial crises,” the Commission said in a press release, noting that “few other risks pose such a threat to human lives, and few other events can damage the economy so much.”

The report, titled The Neglected Dimension of Global Security: A Framework to Counter Infectious Disease Crises, recommended an investment of approximately US$4.5 billion per year – which equates to 65 cents per person – to enhance prevention, detection, and preparedness. The biggest component of this investment is to upgrade public health infrastructure and capabilities for low- and middle-income-countries, which is estimated to cost up to US$3.4 billion per year. The second biggest component of the US$4.5 billion figure is US$1 billion per year to fund accelerated research and development in a wide range of medical products. The balance relates to financing the strengthening of the World Health Organization’s (WHO) capabilities and funding WHO and World Bank contingency funds.

“We have neglected this dimension of global security,” said Commission chair Peter Sands, former group chief executive officer, Standard Chartered PLC in London and senior fellow at the Harvard Kennedy school in Cambridge, Mass. “Pandemics don’t respect national boundaries, so we have a common interest in strengthening our defenses against infectious diseases in every part of the world. Preventing and preparing for potentially catastrophic pandemics is far more effective – and ultimately, far less expensive – than reacting to them when they occur, which they will.”

For example, in the past 15 years, the world faced several infectious disease crises, including Ebola, Middle East Respiratory Syndrome, severe acute respiratory syndrome (SARS), and the influenza virus known as H1N1. The Commission’s own estimates suggest that at least one pandemic will emerge over the next 100 years, with a 20% chance of seeing four or more.

To protect against these threats, the top priority must be to reinforce the first line of defence against potential pandemics, public health capabilities, and infrastructure at a national level, even in failed or fragile states, the report recommended.

Other recommendations include:

• WHO lead the development of a definition and benchmarks for core public health capabilities and functions by the end of 2016;

• WHO create a Centre for Health Emergency Preparedness and Response, under the oversight of an independent Technical Governing Board. WHO should also establish an independent, objective, and transparent mechanism to evaluate country performance against these benchmarks and publish the results, which will enable financial markets to assess economic vulnerability to infectious disease risk;

• WHO generate a high-priority watch list of outbreaks that have the potential to become international public health emergencies, which should be shared daily with national authorities and made public on a weekly basis;

• The International Monetary Fund include pandemic preparedness in its country economic and policy assessments; and

• WHO establish an independent Pandemic Product Development Committee comprised of leading research and development experts from across the world to oversee mobilization and deployment of resources.