Health, Immunization, and Economic Growth

Research Briefing 2:

Vaccines are cost-effective: a summary of recent research

For hard-pressed governments in developing countries, investment in tools that prevent disease, such as vaccines, may seem an impossible luxury. Yet it is becoming increasingly clear that relatively modest spending on immunization can bring significant health gains that benefit households and national economies.

Health has a value in itself and every child has the right to be immunized. But, faced with tight budgets and complex and competing health needs, all governments need to make careful decisions about how to spend their money. This short briefing paper describes some key studies on the cost-effectiveness of immunization.

As a rule of thumb, the World Bank considers that a health intervention is cost-effective if it buys each year of healthy life* for less than the per-capita gross national product (GNP) of the country. For low-income countries, defined as those with a per-capita GNP of $765 or less, this rule of thumb would exclude as cost-ineffective many interventions, such as some hospital-based services, for which costs could run to five figures or more. In contrast, a relatively modest investment in immunization can bring high returns. Back in 1993, the World Bank’s report Investing in Health concluded that child immunization is one of the most cost-effective health interventions available (1) . The cluster of vaccines against polio, dipththeria, pertussis and tetanus that are routinely given through the World Health Organization’s Expanded Programme on Immunization (EPI) can together be given for no more than about $20 per year of healthy life gained in low-income countries, and no more than about $40 in middle-income countries. Immunization is thus seen as a very "good buy".

But, whereas most of the world’s children now receive these traditional vaccines, more recent developments have left the world’s poorer countries behind. In the past two decades a number of new vaccines against major killers have come onto the market. They include a vaccine against hepatitis B , a virus associated with liver cancer and cirrhosis in adulthood, and a vaccine against Haemophilus influenzae type b (Hib) , a bacterial infection that can cause pneumonia and meningitis. These vaccines are widely available in high-income countries. Yet in most low-income countries, where the diseases they prevent are most prevalent, they have not been added to national immunization programmes. For various reasons, these vaccines cost more than the traditional EPI ones. Many governments, it appears, have concluded that they are not affordable.

Yet these decisions might have been different if governments had had access to information about the cost- effectiveness of the vaccines, as opposed to their crude cost. Ministers may not have data on the magnitude of the disease burdens of liver cancer or childhood pneumonia in their national population. They may not have information about the local costs of treating the diseases, or of administering vaccines. If these data were available at national and regional level, each nation could make its own assessment.

Now, following several years’ work, the information that governments need is emerging. Table 1 shows some recent estimates. The results are summarized for groups of countries, categorized by region and income, but individual country data have also been gathered. The assessments take into account, among other things, the estimated local disease burden, the total costs of the vaccine and its administration, the performance of the vaccine in trials (efficacy) and its effectiveness in real communities at given rates of coverage. For fuller details of the methods and a discussion of the assumptions on which such estimates are based, see, for example, reference (2).

Table 1. Vaccine cost-effectiveness


Cost per year of healthy life* gained (US$)



<11.7 (2-15)

Foster et al. in Jamison et al. 1993 (3)

EPI cluster: polio, DPT, BCG, measles:


Jamison et al. 1993 (3)

EPI cluster: polio, DPT, BCG, measles:


Jamison et al. 1993 (3)

Hepatitis B
Low-income countries, prevalence less than 2%


Miller, McCann 2000 (2)

Hepatitis B
Low-income countries, prevalence greater than 8 per cent


Miller, McCann 2000 (2)



Miller, McCann 2000(2)

low-income Asia


Miller, 1998 (4)

While crude cost may still be a powerful influence on ministers’ decisions about which vaccines to introduce, it may be easier to justify expanding a national programme if there are data such as these to demonstrate that specific vaccines are cost-effective. Also, reforms to the health systems of many countries are shifting resources from hospitals to primary services, and there is therefore an opportunity in some countries to increase the immunization budget, given the rational case for doing so.

Through GAVI and its partners, further work is under way to increase understanding of why financing for immunization in the poorest countries is inadequate, and to develop strategies for improved financing of children’s vaccines in the near future.


* A year of healthy life is a year lived without premature death or disability. It refers to a standard measure of disease burden, the disability-adjusted life year, or DALY, which enables researchers to measure a population’s burden of both fatal and nonfatal conditions in a single currency. One DALY is one lost year of healthy life. For example, to calculate the number of DALYs due to road traffic accidents in India in 1998, add the number of years of life lost through premature road deaths plus the number of years lived with a disability of known severity and duration caused by road injuries. Premature deaths are defined as those that occur before the average life expectancy of the longest-lived industrialized populations.

Further reading

For further reading on the background to making cost-effectiveness assessments in health, see: A Framework for Assessing the Effectiveness of Disease and Injury Prevention. MMWR 41(RR-3);001; 27 March 1992 from the Centers for Disease Control and Prevention, Atlanta, or at


New Vaccine Development: Establishing Priorities. Volume II, Diseases of Importance in Developing Countries . Institute of Medicine 1986. Washington, DC. A summary of the book can be viewed at

For estimates of the economic return on vaccines measured in cost savings, see, for example, America’s Vital Interest in Global Health. Institute of Medicine 1997. Washington, DC.


(1) Investing in Health. The World Development Report 1993 . World Bank, Washington DC.

(2) Miller M and McCann L. Policy analysis of the use of hepatitis B, Haemophilus influenzae type B, Streptococcus pneumoniae-conjugate and rotavirus vaccines in national immunization schedules. Health Economics, January 2000. You can browse the journal online here.

(3) Jamison DT, Mosley WH, Measham A R and Bobadilla JL. Disease Control Priorities in Developing countries. Oxford University Press. 1993

(4) Miller M . An assessment of the value of Haemophilus influenzae type b conjugate vaccine in Asia. Pediatr Infect Dis J 1998 Sep;17(9 Suppl):S152-9


A summary of the research evidence showing that improved health has economic benefits

A summary of some recent studies on the cost-effectiveness of immunization as a health intervention

Links to other sources in health and economic development


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