The Economic Impact of Influenza

Influenza produces direct costs due to lost productivity and associated medical treatment, as well as indirect costs of preventative measures. In the United States, influenza is responsible for a total cost of over $10 billion per year, while it has been estimated that a future pandemic could cause hundreds of billions of dollars in direct and indirect costs. However, the economic impacts of past pandemics have not been intensively studied, and some authors have suggested that the Spanish influenza actually had a positive long-term effect on per-capita income growth, despite a large reduction in the working population and severe short-term depressive effects. Other studies have attempted to predict the costs of a pandemic as serious as the 1918 Spanish flu on the U.S. economy, where 30% of all workers became ill, and 2.5% were killed. A 30% sickness rate and a three-week length of illness would decrease the gross domestic product by 5%. Additional costs would come from medical treatment of 18 million to 45 million people, and total economic costs would be approximately $700 billion.
Preventative costs are also high. Governments worldwide have spent billions of U.S. dollars preparing and planning for a potential H5N1 avian influenza pandemic, with costs associated with purchasing drugs and vaccines as well as developing disaster drills and strategies for improved border controls. On 1 November 2005, United States President George W. Bush unveiled the National Strategy to Safeguard Against the Danger of Pandemic Influenza backed by a request to Congress for $7.1 billion to begin implementing the plan. Internationally, on 18 January 2006, donor nations pledged US$2 billion to combat bird flu at the two-day International Pledging Conference on Avian and Human Influenza held in China.
As of 2006, over ten billion dollars have been spent, and over two hundred million birds have been killed to try to contain H5N1 avian influenza. However, as these efforts have been largely ineffective at controlling the spread of the virus, other approaches are being tried: for example, the Vietnamese government in 2005 adopted a combination of mass poultry vaccination, disinfecting, culling, information campaigns and bans on live poultry in cities. As a result of such measures, the cost of poultry farming has increased, while the cost to consumers has gone down due to demand for poultry falling below supply. This has resulted in devastating losses for many farmers. Poor poultry farmers cannot afford mandated measures which isolate their bird livestock from contact with wild birds (among other measures), thus risking losing their livelihood altogether. Multinational poultry farming is increasingly becoming unprofitable as H5N1 avian influenza becomes endemic in wild birds worldwide. Financial ruin for poor poultry farmers, which can be as severe as threatening starvation, has caused some to commit suicide and many others to stop cooperating with efforts to deal with this virus—further increasing the human toll, the spread of the disease, and the chances of a pandemic mutation.