Pandemic economics 1

Einleitung / Introduction

Antigen-based rapid diagnostic tests (Ag-RDT) have been implemented in hospitals and nursing homes to screen for infectious individuals without symptoms suggestive of SARS-CoV-2 infections and to prevent entry into these high-risk settings. Despite their benefits for screening, the cost of large-scale implementation is largely understudied. Our study presents evidence on their implementation costs in high-risk settings. This study aimed to estimate the economic costs of implementing Ag-RDT-based screening for SARS-CoV-2 in two tertiary care hospitals (Universitätsklinikum Heidelberg, and Charité-Universitätsmedizin Berlin) and one nursing home in Germany.

Methode / Method

We adopted a health system perspective and followed the three sequential steps to costing: identification of resources, measurement of resource consumption, and valuation of costs. Data on resource consumption were collected between October 2020 and April 2021 through various techniques and data sources. The cost estimation considered all costs along the screening algorithm including PCR confirmation tests for positive cases. We estimated the costs for the two implementation modalities observed: staff dedicated exclusively to screening and staff not dedicated exclusively to screening. Furthermore, cost estimations were performed under both observed capacity use and hypothetical capacity use assumptions (60%, 80% and 100%).

Ergebnisse / Results

Our study indicates that the average cost per Ag-RDT is highly dependent on the capacity use and implementation mode. Staff time and test kits are the two main cost drivers of implementing the large-scale screening programs for SARS-CoV-2 using Ag-RDTs. For hospitals, the average cost per test in UKHD was €30.12 (capacity observed); €14.56 (non-dedicated mode); €19.47, €16.37, €14.53 at 60%, 80%, 100% capacity respectively (dedicated mode); and at Charité-Universitätsmedizin Berlin €13.10 (non-dedicated mode). For the nursing home the estimated average cost per test was €15.03 (non-dedicated mode).

Zusammenfassung / Conclusion

The information on the estimated costs by mode of implementation and capacity use may support the planning of Ag-RDT-based covid-19 screening programs suitable for each institution. Further research is needed to cost this screening strategy for COVID-19 in other high-risk, high-income settings to reach generalizability.

AutorInnen

Alfonso Valenzuela Hurtado, Heidelberg University

Einleitung / Introduction

The stalling of COVID-19 vaccination rates threatens public health. To increase vaccination rates, governments across the world are considering the use of monetary incentives. Here we present evidence about the effect of guaranteed payments on COVID-19 vaccination uptake. We ran a large preregistered randomized controlled trial (with 8286 participants) in Sweden and linked the data to population-wide administrative vaccination records. We found that modest monetary payments of 24 US dollars (200 Swedish kronor) increased vaccination rates by 4.2 percentage points (P = 0.005), from a baseline rate of 71.6%. By contrast, behavioral nudges increased stated intentions to become vaccinated but had only small and not statistically significant impacts on vaccination rates. The results highlight the potential of modest monetary incentives to raise vaccination rates.

AutorInnen

Armando Meier, University of Lausanne

Einleitung / Introduction

Fast development of medical solutions is necessary when health crises like the COVID-19 pandemic arise. The competition becoming the first to develop, validate, approve, and launch a treatment or a vaccine has been fierce. Whereas novel circumstances usually require time-consuming exploratory approaches, time pressure may drive technological development inducing actors to facilitate their existing resources for immediate action. Actors perceiving a tremendous demand for innovations such as vaccine or treatment and anticipating a huge market share of their potential innovations are forced to rapidly restructure their innovation strategies and capabilities in order to address the market need. Thus, we investigate necessary innovation capabilities during urgency and uncertainty and their effect on actors’ vaccine development performance on the example of vaccine development during the COVID-19 pandemic. According to the knowledge-based view, knowledge as preliminary resource for innovation resides within the organization and collaboration enables knowledge integration in order to foster knowledge recombination (Kogut and Zander, 1992; Grant, 1996b). In times of urgency, knowledge utilization dynamics change. Especially in high-technology industries, knowledge is usually dispersed and external resources give access to new knowledge (Grigoriou and Rothaermel, 2017) Lacking time to form new alliances and a supportive environment, however, actors rely on their existing capabilities. The research-intensive pharmaceutical industry features highly time- and cost-intensive R&D processes and faces high failure rates and an overall declining R&D productivity (Danzon et al., 2005; Deeds, et al., 2000; Schuhmacher et al., 2018). New products secure growth and competitive advantage but many clinical trials structurally fail in pharmaceutical new product development (Buonansegna et al, 2014). In addition, high collaboration activity is observed due to a shift from internal R&D processes to an open innovation strategy. Notably, all successfully FDA-authorized COVID-19 vaccines result from collaborations like the Pfizer/Biontech vaccination (Milken Institute, 2021). A fast response to an emerging disease requires a shortening of R&D processes. The development of a new vaccine in response to a global health threat was expected to take a minimum of 12 to 18 months (Billington et al., 2020). However, pharmaceutical and biotech firms re-designed their innovation strategies and applied lean development and parallel processing such as rolling approval process to unprecedentedly accelerate new product development (Cooper, 2021). Our case focusses on 211 actors that have been working on COVID-19-vaccines within the first 18 months after the outbreak of the pandemic. Since for this particular case most information is commonly shared, we systematically collected publicly-available information from actors’ research publications, patents news articles, and databases. To test our hypotheses, we analyze the effects of internal and external innovation capabilities at an organizational level. R&D commercialization activity indicates an actor’s innovation ability. We, therefore, focus on the vaccine development stage of organizations’ vaccine candidates as they signal early R&D commercialization potential and additionally enable actors’ potential to acquire research funds and venture capital. As decisive internal resources, we turn to the organization’s prior specific knowledge that we further split into commercial and scientific knowledge. Prior specific scientific knowledge for the development of new vaccines is reflected in prior COVID-19-similar publications (e.g. publications related to SARS-CoV or HIV). Prior specific commercial knowledge is reflected in similar patents within the medical field (e.g. patents related to SARS-CoV or HIV in IPC A61) that may have led to a successful product introduction. As external knowledge resources, we analyse the impact of an organization’s network embeddedness: scientific network embeddedness by current COVID-19-co-publications and commercial network embeddedness by publicly declared COVID-19 vaccine development partnerships retrieved from web search. Last, we turn to the institutional diversity of the collaboration partners distinguishing between developers, funders, manufacturers and service providers. Our results show positive direct effects of internal resources of knowledge on R&D commercialization activity. Actors well-embedded in research networks are able to utilize their internal deep scientific knowledge better transforming it to new outcomes. Both internal and external resources are complementary. This supports the importance of prior applied knowledge to exploit external resources and the need of complementary external knowledge for specific development tasks under urgency. Forming alliances, both types of organizations can mutually benefit from each other and exploit technology and market synergies: Entrepreneurs or start-ups may get access to the incumbents’ resources like existing product candidates, production facilities, and distribution channels (Fernald et al. 2017; George et al., 2001; Schuhmacher et al., 2013). We extend resource- and knowledge-based view as we show that under urgency actors with extensive internal specific field knowledge profit from influences of external network partners. These actors are able to facilitate their existing knowledge to exploit their resources while integrating exploratory influences of collaboration partners. Thus, the management of firm’s existing knowledge and technologies as well as a fast usage of commercialization knowledge and capabilities of network collaborators are becoming a crucial success factor in times of urgent and uncertain environmental shocks such as the COVID-19 pandemic. This further implies that incumbent firms should connect to exploratory entrepreneurs to speed up effective R&D performance and thus, develop the next radical innovation to fight COVID-19. References Barney, J. 1991. Firm Resources and Sustained Competitive Advantage. Journal of Management 17 (1): 99–120. Billington, J., I. Deschamps, S. C. Erck, J. L. Gerberding, E. Hanon, S. Ivol, J. W. Shiver, J. A. Spencer, and J. van Hoof. 2020. Developing Vaccines for SARS-CoV-2 and Future Epidemics and Pandemics. Applying Lessons from Past Outbreaks. Health security 18 (3): 241–9. Buonansegna, E., S. Salomo, A. M. Maier, and J. Li-Ying. 2014. Pharmaceutical new product development. Why do clinical trials fail? R&D Management 44 (2): 189–202. Cooper, R.G. 2021. Accelerating innovation: Some lessons from the pandemic. Journal of Product Innovation Management. 38: 221-232. Danzon, P. M., S. Nicholson, and N. S. Pereira. 2005. Productivity in pharmaceutical-biotechnology R&D. The role of experience and alliances. Journal of health economics 24 (2): 317–39. Deeds, D. L., D. Decarolis, and J. Coombs. 2000. Dynamic capabilities and new product development in high technology ventures. Journal of Business Venturing 15 (3): 211–29. Fernald, K. D. S., H. P. G. Pennings, J. F. van den Bosch, H. R. Commandeur, and E. Claassen. 2017. The moderating role of absorptive capacity and the differential effects of acquisitions and alliances on Big Pharma firms' innovation performance. PloS one 12 (2): e0172488. George, G., S. A. Zahra, K. K. Wheatley, and R. Khan. 2001. The effects of alliance portfolio characteristics and absorptive capacity on performance. The Journal of High Technology Management Research 12 (2): 205–26. Grant, R. M. 1996b. Toward a knowledge-based theory of the firm. Strategic Management Journal 17 (S2): 109–22. Grigoriou, K., and F. T. Rothaermel. 2017. Organizing for knowledge generation. Internal knowledge networks and the contingent effect of external knowledge sourcing. Strategic Management Journal 38 (2): 395–414. Kogut, B., and U. Zander. 1992. Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology. Organization Science 3 (3): 383–97. Milken Institute. 2021. COVID Tracker. Available at: https://covid-19tracker.milkeninstitute.org/ [15.11.2021]. Schuhmacher, A., O. Gassmann, N. McCracken, and M. Hinder. 2018. Open innovation and external sources of innovation. An opportunity to fuel the R&D pipeline and enhance decision making? Journal of translational medicine 16 (1): 119. Schuhmacher, A., P.-G. Germann, H. Trill, and O. Gassmann. 2013. Models for open innovation in the pharmaceutical industry. Drug discovery today 18 (23-24): 1133–7.

AutorInnen

Daniel Laufs, Kiel University - Technology Management Research Group

Tetyana Melnychuk, Kiel University - Technology Management Research Group

Carsten Schultz, Kiel University - Technology Management Research Group

Einleitung / Introduction

COVID-19 pandemic has had unprecedented effects on many aspects of our lives. Even though the primary objective during the pandemic is to keep the COVID-19 related mortality and morbidity rate low, underutilization of health care services, especially lower well-child visits and lower screening rates for cancer can lead to unintended long-term public health problems. In this work, we examined the effect of policy measures taken to fight the pandemic on health care utilization.

Methode / Method

We used monthly health care utilization data obtained from Zentralinstitut für die kassenärztliche Versorgung by state from 01.2019-06.2021. We considered cancer screenings (colonoscopy, mammography, and melanoma), obstetrics and well-child visits, and aggregate outpatient visits. We employed an event study framework to examine the effect of policy measures such as lockdowns taken during the pandemic on health care utilization. We included state fixed effects and weather controls. Since policy measures are expected to be imposed depending on the progression of the pandemic, we controlled for the progression of the pandemic by including rates of deaths and confirmed cases in the state to avoid the bias introduced by non-random assignment of policy measures or time-varying treatment effects. Furthermore, we examined the association between demographics (shares of elderly and foreigners) and political orientation of the population and health care utilization to explain the residual variation in health care utilization by including the interactions of time fixed effects and the relevant state characteristics.

Ergebnisse / Results

Policy measures caused an immediate decline and did not have a long-term effect on health care utilization. The effect became insignificant one month after the removal of the policy measures for all health care services we considered. Interestingly, the effect of policy measures became insignificant once demographics and political orientation of the population were taken into account. Higher share of elderly was positively associated with cancer screenings, and negatively associated with aggregate outpatient visits. Higher vote share of AfD was positively associated with aggregate outpatient visits, negatively associated with colonoscopy and melanoma screenings, and was not significantly related to mammography, well-child and obstetrics visits. Share of foreigners was positively associated with utilization of all health care services we considered.

Zusammenfassung / Conclusion

Policy measures taken to fight COVID-19 only had an immediate effect on health care utilization. Hence, they are not a source of concern for underutilization of preventive health care services. However, lower screening rates for cancer in states with certain characteristics call for attention to achieve health improvements in Germany.

AutorInnen

Esra Eren Bayindir, Universität Hamburg- Hamburg Center for Health Economics

Jonas Schreyögg, Universität Hamburg- Hamburg Center for Health Economics