Discussion Papers on Economics,
University of Southern Denmark, Department of Economics

Abstract: Vaccines against COVID-19 are under development. As a scarce resource, the health authorities have to decide how to prioritise the vaccine in the target population. The aim of this paper is to explore the cost-effectiveness of a COVID-19 vaccine and to analyse how the vaccine price, and the cost of administrating it, influence its cost-effectiveness. We consider an epidemiological model developed by Statens Serum Institut (SSI) to determine the possible effects of a vaccine in terms of the number of life-years gained and hospital cost saved. The model allows us to differentiate between two populations groups, those above and below 60 years of age, respectively. We used the model to consider four scenarios: 1) vaccination of 1.5 million persons 60 years of age or older, none below that age, 2) vaccination of 1.5 million persons below the age of 60 years, none above that age, 3) vaccination of 900.000 persons below 60 years of age and 1.5 million person 60 years of age or older, and 4) 2.4 million persons below the age of 60 years. The time horizon of the analysis is six months, and the perspective is that of the Danish healthcare sector. The results show that inclusion of the elderly population 60 years of age or older is more cost-effective than a vaccination strategy targeted a population which is younger than 60 years old only. Furthermore, the results show that an extension of the target group from the elderly population only, to also include the younger population comes with an increasing cost per life-year gained. These findings are independent of the specification of the cost of hospitalization for treating COVID-19 infections and the costs of the vaccine. However, the incremental cost-effectiveness ratio depends on the price of the vaccine, hereunder also the administration costs, and the discount rate used for the estimation of life-years gained from a vaccine.

Keywords: Cost-effectiveness analysis; COVID-19 vaccine

JEL-codes: C63; D60; I18

24 pages, January 26, 2021

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