The Economic Case for Pandemic Preparedness and Response

Executive summary

Pandemics are rare but their consequences can be dire

Pandemics and public health emergencies of international concern are low-probability, high-impact events that can disrupt every facet of society, a risk underscored by the ongoing Ebola outbreak in the Democratic Republic of the Congo. The 1918 influenza pandemic killed an estimated 40 to 50 million people worldwide. The 2002‑2003 severe acute respiratory syndrome outbreak spread across 26 countries on 5 continents.

Rapid urbanisation, deforestation, intensive farming, poorly regulated wildlife trade and changing weather patterns are raising the risk of future pandemics. Scientific studies warn that the world faces a roughly one‑in-two chance of another pandemic on the scale of COVID‑19 within the next 25 years. Rising human infections with highly pathogenic avian influenza heighten these concerns.

The health and economic consequences of COVID‑19 are likely to persist over the next two decades

The burden of COVID‑19 goes beyond its immediate impacts. The crisis reshaped lifestyle‑related risk factors for non-communicable diseases, including tobacco use, alcohol consumption and obesity while disrupting care pathways for people living with chronic conditions. OECD analysis across 28 OECD countries links these changes to a 2.4‑month decline in average life expectancy between 2020 and 2024, compared with a hypothetical scenario in which COVID‑19 did not occur. This loss translates into a 0.4% increase in average annual health expenditure and GDP losses of 0.1% per year. These impacts are projected to fade if risk factors return to pre‑pandemic levels; should they persist, average life expectancy could remain 1.9 months lower by 2050, with annual health expenditure 0.6% higher and GDP up to 0.2% lower each year.

Early and effective pandemic response is the only viable strategy to avoid overwhelming health systems and destabilising economies

OECD simulations using the Strategic Public Health Planning Model for pandemic preparedness and response (PPR), assess five unmitigated outbreak scenarios, including Ebola-like, avian influenza-like, influenza A-like, coronavirus-like and measles-like outbreaks, as a stress test for health systems and economies. Without treatments or vaccines available at scale, unmitigated outbreaks could claim the lives of between 1% of the population in a coronavirus-like outbreak and more than 5% in an influenza A-like outbreak within the first nine months. Critical care capacity in OECD countries could be exhausted, on average, within one to two months. Surge capacity, the ability of health systems to expand beyond normal capacity, can provide only temporary relief.

When health systems are overwhelmed, economies stumble. Across all five outbreak scenarios, failure to mitigate outbreaks would result in sharp GDP contractions of between 2.7% in a coronavirus-like outbreak and 16.2% in a measles-like outbreak, on average, with the scale of damage varying across countries. Transport and storage, manufacturing, and administrative and support services would consistently be among the hardest-hit sectors of the economy.

Early implementation of non-pharmaceutical interventions (NPIs) with strong public support saves lives while limiting economic damage

NPIs, core public health measures ranging from physical distancing to ensuring safe travel, can protect both population health and economic activity in the early phases of pandemics, when they are likely to be the only interventions readily available. OECD microsimulations across 51 OECD, EU/EEA and G20 countries show that:

• Early and effective implementation of NPIs can reduce the need for more restrictive interventions later. All four modelled NPI packages, ordered by their disruption to daily life, from community-based infection prevention and control (IPC) measures improved hand hygiene and mask wearing to lockdowns substantially reduce the health toll of pandemics. Even the least stringent option, the “Safer contact” package, could avert at least 40% of deaths compared with an unchecked outbreak if implemented effectively, while limiting the average GDP losses.

• A layered approach, in which measures are progressively scaled up as needed, offers a balanced strategy. The “Reduced contact” package, which combines community-based IPC measures with teleworking, domestic travel limitations and mandatory quarantines, can avert most deaths while cushioning economic losses across most scenarios. This approach can avoid resorting to school closures and international travel restrictions.

• Relying on lockdowns alone as a last resort, without strong use of less restrictive NPIs, is both the least effective strategy for saving lives and the most damaging for the economy, with average GDP declines ranging from 11.7% to 28.9%, often exceeding the losses associated with unmitigated outbreaks.

• The effectiveness of any NPI strategy depends heavily on the degree to which the public complies with recommended containment measures. Where compliance is low, more restrictive interventions, including lockdowns, may become unavoidable.

Robust disease surveillance systems and strategic stockpiling are critical for the early and effective implementation of NPIs

Policymakers can act quickly only if they can see an outbreak coming and have the supplies to respond:

• NPIs can be deployed promptly, targeted precisely and adjusted only when policymakers have timely and accurate data on how an outbreak is unfolding. OECD analysis shows that combining clinical surveillance with wastewater monitoring could enable earlier and more targeted implementation of NPIs while reducing attributable deaths and the duration of lockdowns.

• Even where surveillance signals the need for prompt action, that action can only be implemented effectively if the necessary supplies are already in place. National and regional stockpiles are the first line of defence, buffering surges in demand for healthcare services and disruptions to supply chains.

Successfully managing outbreaks also hinges on effective governance systems that guide strategic decision making during health crises, build public trust, support effective crisis communication, ensure close collaboration across sectors and establish mechanisms for international co‑ordination.

Strengthening PPR capacity is affordable and delivers broad benefits

Investment in PPR is modest relative to the potential losses. OECD analysis estimates that around USD PPP 7.1 billion per year would be needed, on average, to strengthen PPR capacity in OECD countries (USD PPP 2.6 billion per year in the EU/EEA). Almost USD PPP 4.4 billion (USD PPP 3.2 per capita) would go towards national stockpiles of personal protective equipment and hygiene supplies.

The infrastructure, surveillance systems and co‑ordination mechanisms built for PPR are dual use: they strengthen routine services, speed the detection of emerging threats and support public trust in institutions in normal times.