Varicella Vaccine, Cost-effectiveness Analyses, and Vaccination Policy

Has varicella vaccination been as cost-effective as anticipated when it was universally recommended for children 10 years ago? The answer is complicated and illuminates an evolving controversy regarding the role of cost-effectiveness analyses in deliberations over national vaccine recommendations.

In 1994, Lieu and colleagues¹ estimated the cost-effectiveness of a universal childhood varicella vaccination program. Projecting a national vaccination rate of 97% by the sixth year of the program, they estimated a 94% reduction in varicella incidence, accompanied by an 89% reduction in direct medical costs. Accounting as well for reductions in the quantity of parents’ and other adults’ lost work time attributable to varicella (ie, the “indirect” benefits of vaccination), Lieu et al projected that a varicella vaccination program would save more than $5 for every $1 spent.¹

These projections of reduced varicella disease burden and direct medical costs with varicella vaccination appear prescient, even though they were based on optimistic vaccination rates. In this issue of JAMA, Zhou and colleagues² present data from a national group of privately insured individuals in 1994-2002 that indicate reductions of nearly 90% in hospitalization rates for varicella, nearly 60% in ambulatory visit rates, and 74% in costs borne by health care payers—accomplished in an era when slightly more than 80% of US toddlers had been vaccinated against chickenpox. Cost reductions might have been even more substantial if Zhou et al had sufficient data to analyze pharmaceutical expenditures for antiviral agents that Lieu et al considered.

Although the study by Zhou et al is based solely on trends among insured individuals, the magnitude of their findings corresponds well to patterns of varicella incidence and mortality collected without regard to payer^{3 - 4} and to varicella-related hospitalization trends and associated charges collected on insured and uninsured children and adults.⁵ In addition, these data support the strong evidence of herd immunity against varicella in the vaccination era,^{3 - 5} with adults experiencing the benefits of children’s vaccination, and infants—who are not eligible for vaccination—showing the greatest reductions of all child age groups.²

Nonetheless, these findings do not conclusively confirm that childhood varicella vaccination is as cost-effective as originally anticipated, for several reasons. First, the cost of the vaccine has increased more than $10 per dose in inflation-adjusted terms since 1995 (the current public sector price per dose is $52.25),⁶ although an increase of this magnitude was not anticipated to change the cost-effectiveness dramatically.¹ Second, the national varicella vaccine recommendation prompted states to measure and react to varicella as a reportable vaccine-preventable illness. The costs of such monitoring and of responding to outbreaks of varicella (eg, in day care⁷ or school⁸ settings) may be substantial and were not included in the original analysis by Lieu et al.

Third, and perhaps most important, there is great uncertainty about the extent to which parents and other adults experienced reductions in lost work time attributable to varicella. As with other childhood and adolescent vaccines that have recently been recommended (eg, pneumococcal and meningococcal conjugate vaccines), indirect cost savings with varicella vaccine were expected to be larger than savings in direct medical costs.^{1 ,9 - 10} With varicella vaccine, the ratio of indirect cost savings to direct cost savings was expected to be nearly 5:1.¹ Despite the importance of indirect cost quantification to the evaluation of vaccination programs, there are no established mechanisms to measure such effects.

Therefore, it is possible that the increasing value of work time over the past decade may have increased savings beyond what Lieu et al¹ anticipated. Conversely, increasing unemployment may have allowed more parents to care for their ill children at home without missing work, effectively reducing savings attributable to the program. Both of these changes may have occurred disproportionately in specific sectors of the economy (eg, wage increases in the software industry and unemployment increases in the manufacturing industry) that may have different likelihoods of having young children in the household. These changes are plausible, but their magnitude remains unknown.

Pointing out current limitations in measuring indirect benefits of vaccination programs may seem methodologically nitpicky, but it is more than an academic exercise. The contemporary health care climate is dominated by rapidly rising costs, and decision makers are examining cost-effectiveness data—imperfect as these data may be—as they consider whether to adopt newly available health care technologies. As the costs of childhood vaccination continue to increase for parents, private payers, and public programs,¹¹ cost-effectiveness data have been scrutinized for newly recommended meningococcal conjugate vaccine and combined tetanus–diphtheria–acellular pertussis vaccines for adolescents.^{10 ,12}

The manner in which cost-effectiveness data should used in decisions about new vaccine recommendations made by national advisory bodies (eg, the American Academies of Pediatrics and Family Practice and the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention), however, is not yet settled. At one end of the spectrum are those who argue that cost should not be considered in deliberations about vaccine recommendations. At the other end are those who assert that new recommendations cannot be made without considering the economic consequences because those consequences ultimately affect adoption of the recommendations by state programs, payers, and practitioners. These positions are not easy to reconcile. Nevertheless, taking a long-range view of the implications of such positions shifts the argument from the philosophical to the practical.

For instance, consider a scenario in which advisory bodies issue new vaccine recommendations almost exclusively on the merit of data from clinical trials and epidemiologic studies. Cost-effectiveness data, while available, do not sway their decisions. Vaccines are recommended in the order in which they are considered through the years, comprising a list of recommended vaccinations without regard to the economic impact on public or private vaccine financing. As a result, states with budget constraints develop complex and conflicting lists of vaccines covered in their public vaccination programs, as states already do now with regard to more expensive vaccines, such as pneumococcal conjugate.¹³ Private plans may follow states’ decisions or decide on their own coverage patterns, potentially creating broad inequities in coverage among children across plans. With increasingly expensive vaccines likely recommended in the future,¹¹ economic barriers to vaccination for some children are likely to increase, undermining the overall vaccination effort and failing to maximize the benefits of vaccines to the general public through herd immunity that results from high vaccination rates.

By contrast, in a second scenario, advisory bodies would consider new vaccine recommendations on the merit of clinical trials, epidemiologic data, and cost-effectiveness analyses as well. A cost-effectiveness threshold (eg, $50 000 per quality-adjusted life-year considering both direct and indirect costs) is incorporated in all decisions, such that new vaccines are recommended only if the estimated cost-effectiveness is lower than the accepted threshold. Through the years, recommendations constitute a set of vaccinations that reflects experts’ attempts to recognize fiscal constraints. Moreover, this list of universally recommended vaccines is consistent across all states and payers. However, vaccines that do not meet the cost-effectiveness threshold may not be available, for want of a market large enough to warrant continuing production, and this may potentially harm individuals who could benefit from such products.

These scenarios have their contrasting advantages and disadvantages, but one common feature is rationing. In the first scenario, the rationing is decentralized, more ad hoc, and relativistic, emphasizing circumstances specific to states and health plans. In the second, rationing is more explicit, formalized, and absolute, emphasizing principles of equity and consistency across time and circumstance and risking losses to individuals to maximize gains for many.

When an intervention is expected to save money, as with varicella vaccination, rationing is not necessary. However, vaccinations are rarely referred to as cost-saving today. Nevertheless, while vaccination programs cost money to implement, the return on most vaccination efforts continues to compare favorably with many therapeutic medical interventions, very few of which promise the “public good” aspects that vaccination offers to the recipient and to his or her family and community through herd immunity.

To maximize the benefits of vaccines for children and adults in the future, it is imperative to formally and openly consider how best to incorporate cost-effectiveness considerations into deliberations about vaccine recommendations, thereby acknowledging that health and economics cannot be teased apart. From the perspectives of patients, payers, clinicians, and public health officials, costs are just as much a part of vaccines as their benefits.