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Billions Spent, Billions Saved: The True Cost of the
COVID Vaccine
By Michigan Medicine - University of Michigan
Five years ago, as COVID-19 rapidly spread across the globe,
volunteers stepped up to join the first clinical trial of a vaccine designed to
fight the new virus.
Within a year, more than 66 million American adults had
received at least one dose of a COVID-19 vaccine, free of charge.
A Strategy That Paid Off
Now, new research highlights just how valuable that early
national investment was. A study led by University of Michigan researchers,
published in the journal Vaccine, found that the U.S. vaccine
rollout paid for itself within the first year.
The reason? Vaccination significantly reduced the number of
people who became seriously ill or died from COVID-19. As a result, the country
ended up saving more money than it spent on the vaccine effort.
Analyzing Medical and Economic Savings
The analysis looked beyond just hospital bills. It factored
in the costs of testing and treatment, care for long COVID and rare vaccine
side effects, and lost productivity, such as missed work due to illness or
death.
Even without counting lost productivity, the national
COVID-19 vaccine effort saved money for most adult age groups purely by
avoiding medical costs, the study concludes. Overall, among all adults over age
40, the nation saved more in avoided medical costs than it spent on the vaccine
effort.
Even among adults aged 18 to 39, who are less likely to get
seriously ill from COVID-19, the vaccination effort cost slightly more than the
total medical costs avoided, but was still cost-effective by national
standards. When lost productivity is included, vaccinating these younger adults
was cost-saving.
CDC Collaboration and Broader Validation
The U-M team that performed the study has also presented
findings about the cost-effectiveness of several vaccines to meetings of
the Centers for Disease
Control and Prevention’s Advisory Committee for Immunization Practices,
which creates recommendations for vaccine use.
“All in all, we can safely say that this was a prudent
investment for the American people, using a really conservative analysis,” said
Lisa Prosser, Ph.D., first author of the new study and professor at the U-M
Medical School and School of Public Health. “From a broader societal economic
perspective, and from the perspective of medical care costs, the federal
government’s decision to accelerate vaccine testing, buy large quantities of
vaccine, and support the cost of vaccination in many settings was wise.”
Savings Likely Underestimated
Prosser and senior author David Hutton, Ph.D. of the U-M SPH
worked to develop and test the model, which is based on research findings by
many other teams that have studied aspects of COVID-19.
The model includes everything from the cost of the vaccine
itself, to home or lab tests for the virus, to the likelihood of suffering any
level of COVD-19 illness or vaccine reaction, to the typical cost of receiving
care at any level of illness, to the number of days of work lost for different
levels of illness. The researchers included post-COVID conditions, also called
Long COVID or PASC for Post-Acute Sequelae of COVID-19.
The model uses conservative estimates, so the size of the
savings may actually be even larger than the study reports, Prosser notes.
For instance, it does not include the lost productivity of
people who took time off work to care for a sick adult family member, patients’
out-of-pocket costs for treatment, or transportation to get to medical care.
Nor does It include the cost of the basic laboratory science funded by the
federal government over two decades that laid the groundwork for the two mRNA
vaccines made by Pfizer and Moderna.
Looking Forward: Future Models and Vaccines
Prosser, Hutton and their colleagues have done additional
economic modeling of waves of vaccination after 2021 in collaboration with CDC.
They hope to create a model for the updated version of the vaccines that are
expected to roll out this coming fall, but this will depend on CDC funding and
data.
Prosser notes that as of his winter, widespread vaccination
and improved treatment have decreased the death toll from COVID-19, and the
number of cases severe enough to need emergency or hospital care.
Still, between 800 and 1,000 people have died of COVID-19
every week of 2025 for which full data are available, and about 1% of all
emergency department visits in recent months have been for illness diagnosed as
COVID-19.
She notes that the current CDC recommendation is for
everyone over the age of 6 months to get at least one dose of one of the three
updated vaccines that became available in September 2023 and are now updated
annually. So far, about 30 million have done so, including about 30% of people
age 65 and older, who are at the highest risk of severe COVID-19 if they become
infected.
For people who are age 65 and older, or immunocompromised
because of a health condition or treatment, the CDC recommends a second dose of
the current vaccine six months after the first.
That means that people who got the updated vaccine soon
after it came out in September should now go get a second dose.
Reference: “The cost-effectiveness of vaccination against
COVID-19 illness during the initial year of vaccination” by Lisa A. Prosser,
Janamarie Perroud, Grace S. Chung, Acham Gebremariam, Cara B. Janusz, Kerra
Mercon, Angela M. Rose, Anton L.V. Avanceña, Ellen Kim DeLuca and David W.
Hutton, 21 January 2025, Vaccine.
DOI:
10.1016/j.vaccine.2025.126725
In addition to Prosser and Hutton, the study’s authors are
Janamarie Perroud, Grace
S. Chung, Acham Gebremariam, Cara
B. Janusz, Kerra Mercon, Angela M. Rose, Anton
L.V. Avanceña and Ellen Kim DeLuca. All the authors are or were
formerly affiliated with the U-M School of Public Health or the Susan B. Meister Child Health and Evaluation Research
Center (CHEAR), which is based in the U-M Medical School’s Department of
Pediatrics.
The study was funded by CHEAR.
