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Commentary: The Costs of a Pandemic

December 15, 2009

Clare Narrod

The World Health Organization (WHO) defines a pandemic as a new virus that emerges, causes serious illness when it infects humans, and spreads easily and sustainably. The recent spread of swine flu and the subsequent panic has once again shed light on global threats, reminding us of the need for risk analysis to inform decisionmaking.

Between 2003 and August 2009, 62 countries reported highly pathogenic avian influenza (HPAI) in their domestic poultry or wildlife. Human cases, however, were reported in only 15 countries, mostly in Asia and Africa. Though the outbreak has been relatively limited thus far, the World Bank has estimated that an HPAI pandemic could cost the world economy between US$800 billion dollars and US$3 trillion dollars (from lost poultry production, control measures, and multimarket effects), depending on the virulence of the virus. The fear of a pandemic has led to an extensive global response to the outbreak; thus far, billions of dollars have been pledged—and diverted from other uses—to HPAI prevention and control methods. The reasoning behind such spending has been attributed to the idea that if HPAI were to become a human pandemic, it would have an impact beyond developing countries.

However, since the initial outbreaks, fewer and fewer countries have experienced infections in either poultry or humans. In 2009, only 10 countries have had proven H5N1 avian influenza cases in domestic poultry or wildlife and only 3 countries have had any human cases. However, the World Bank suggests that despite the limited number of infections, the threat of an HPAI pandemic remains unchanged. According to the Bank’s 4th Review of the Global Responses to Avian Influenza and State of Pandemic Readiness, sustained vigilance and continued investment in both surveillance and response capacity is required worldwide.

This view has led many countries to develop extensive action plans to be implemented should an HPAI pandemic occur. However, the prevention and control strategies that appear in many of the plans have not yet been tested or validated, especially in countries where outbreaks have not taken place. Furthermore, evidence indicates that during the early, acute stages of a new virus, governments and the international community often react by implementing as many prevention and control measures as possible to minimize the magnitude and scope of the disease. These measures include culling, compensating producers to encourage reporting, imposing restrictions on restocking, implementing biosecurity requirements, closing live bird markets, and vaccinating.

The question remains as to whether these measures are cost effective or even necessary. There has been little consideration of the potential impact of these measures on the livelihoods of poultry producers, actors along the value chain, and consumers. Nor has much attention been paid to the direct costs of the measures or to the indirect costs of building institutions and mechanisms to support the measures.

The donor community has funded various paths of action with little understanding of the effectiveness of these measures, of how optimal strategies differ between countries (particularly developing countries), or of the actual impact of the disease on livelihoods. Little is known about whether stakeholders would be willing to adopt control options (such as compensation) or whether they would be willing to pay to implement cost-effective control strategies out of the fear of a human pandemic or loss of business. All of this information will be essential if individual countries begin to assume responsibility for the costs of HPAI prevention and control.

Part of the gap in understanding is due to a lack of data on the direct costs of prevention and control measures, and on the impact of HPAI on livelihoods. In order to help fill this gap, IFPRI has been working with international and national partners to determine the potential impact of an HPAI outbreak on the household incomes of the rural poor and on the economy at large. The project, which focuses on Ghana, Nigeria, Kenya, Ethiopia, and Indonesia, is using data from areas that have already experienced an outbreak to model the likely impact on areas where outbreaks have not yet occurred. The research aims to provide an increased awareness of the contribution of poultry to rural livelihoods, and of the risks and consequences of HPAI and its control for different regions and stakeholders. It will also help identify effective and socially equitable control measures and implementation strategies that are appropriate for different sectors, and household and producer types.

The results of the modeling exercise suggest that the impact of an outbreak on the household income of the rural poor will not be great, since most poultry producers in Africa implement a diverse range of income-generating strategies that tend to make them resilient to disease shocks. In addition, the findings suggest that the overall effect of an outbreak on a country’s economy (and therefore on its poverty rate) will be small on average, though there will be variation across regions and sectors.

IFPRI also analyzed producers’ knowledge, attitudes, and perceptions of HPAI and their willingness to accept control measures in Indonesia. Researchers found that though poultry producers have high levels of HPAI awareness, they actually have limited knowledge of the symptoms of HPAI and variable knowledge of transmission pathways, preventive measures, and how to dispose of dead birds. The findings also indicated that the producers’ level of knowledge, attitudes, and perceptions had almost no impact on their willingness to accept compensation. They were willing to accept half as much compensation for sick birds as for healthy birds, lower compensation if the poultry had New Castle disease in the past, and lower compensation rates for uniform flocks.

Information such as that generated by this work is essential as governments struggle to make informed decisions. The chief veterinary officers in the project study countries, for example, are keen to know what most cost-effective HPAI-control measures are, as they are well aware that donor money will likely be diverted elsewhere should another health-related crisis arise. Given this is already occurring with H1N1, it is important that as the international community works to mobilize funds, it continue to reach out to researchers to answer critical questions—such as the impact of the disease on household incomes and health, and the willingness of stakeholders to adopt/pay for control strategies—and to identify the cost-effectiveness of the control strategies being prescribed.

For more details on the projects mentioned above, see

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