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Calculation of the annual costs associated with each of the vaccine candidates entails three major components: 1) the reduction in morbidity costs; 2) the vaccination program costs; and 3) the costs of development of the vaccine. The costs of adverse reactions also should be calculated, if applicable.

Reduction in Morbidity Costs The general procedure for calculation of the direct costs associated with each disease is discussed in Chapter 4. The protocols developed to represent the typical treatment of each disease’s cases, complications, and sequelae are presented in Appendixes C through P. The annual costs associated with vaccine preventable illness are calculated in a similar fashion and are included in the relevant appendixes. The costs associated with vaccine preventable morbidity are adjusted for various factors as shown in Figure 7.2, to derive an annualized present value of expected reductions in morbidity costs.

Vaccination Program Costs Calculation of the vaccination program costs is shown in Table 7.3. The annual number of new potential vaccine recipients is derived as shown in Table 7.1. Table 5.1 indicates the predicted cost/dose of each vaccine to the private sector and the number of doses required.

Program costs have been calculated for a fully private sector vaccine delivery program and for the situation that the committee considers most likely, namely, federal and state intervention to support certain (pediatric) vaccine programs. For the latter situation (termed a mixed public-private program), which is used in the central analysis, it is assumed that half of the total number of doses of pediatric vaccines would be delivered through public programs, and that bulk purchase would reduce the price of the vaccine (for those doses) by half. (The average cost per dose would thus be reduced to 75 percent of the cost predicted in Table 5.1.)

Surveys of charges for vaccine administration indicate differences between public and private settings and between pediatric and adult patients (Office of Technology Assessment, 1981). Calculations are made assuming a delivery charge per dose for pediatric vaccines of $15 in a private setting and $5 in a public program. (Thus, with a 50:50 mixed publie-private program for pediatric vaccines the average delivery charge would be $10.) The charge per dose for adults is assumed to be $10. Any delivery of adult vaccines through public programs is considered to be too limited to affect the price per dose or the average cost of delivery. The charges noted above are consistent with charges reported by the Office of Technology Assessment (1981), adjusted to 1984 levels using an annual inflation rate of 10 percent.

For the improved pertussis vaccines, incremental costs are calculated rather than total costs. The cost of delivery of a new

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