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a more stable level of use has been reached. During this period of instability, both costs and health benefits will vary from year to year in ways that are difficult to estimate and that will differ from the typical costs and health benefits expected at steady-state levels of use. Several factors are likely to contribute to the early variation and instability in patterns of use. As the health care system and the public become more familiar with a vaccine, levels of use in a vaccine’s planned target population are likely to increase over time. The initial period of vaccine use is also likely to be affected by efforts to “catch up” on coverage. For preventive vaccines, this would involve administering additional doses of vaccines to groups beyond the target population, thus increasing the cost of vaccine delivery and altering the assumptions regarding the timing of health benefits relative to vaccination. Similarly, for some therapeutic vaccines, a catch-up effort might include administering the vaccine to a portion of the population of patients who already have a condition in addition to newly diagnosed cases. Treating these patients might contribute some added health benefits in the early years of vaccine use, as well as added costs, that would not match the levels associated with what the committee’s analysis has assumed to be a typical level of vaccine use. (In the case of diabetes and perhaps other therapeutic vaccines, however, such catch-up vaccination efforts will not be effective in treating established cases of illness.)

Time Horizon and Discounting

The conditions that the committee studied have different time lines for development of a vaccine, the age at which the vaccine would be given, and the age at which health effects and related costs would be experienced. For example, one vaccine might be available in 3 years for use in infants to prevent a condition that usually occurs within the first 2 years of life. Another vaccine might require 15 years in development for use in adolescents to prevent a condition that usually occurs at about age 50. For the first vaccine, benefits might be observable within 5 years, but for the second one, more than 50 years would be needed to realize the benefits of the vaccine.

To provide a common point of comparison for the analysis, the health effects and costs for each case are calculated on an “annualized” basis and are discounted to their present values. The annualized estimates reflect the lifetime stream of health effects and costs that result from cases occurring during 1 year. The costs of vaccine development, which are assumed to be independent of the number of people who will use the vaccine, are prorated, or “amortized,” to produce an estimate of annual costs.

Determining the “present value” of these health effects and costs requires the use of discounting to adjust their value on the basis of the interval between the present and the time at which the health effect or the cost will occur in the future. A standard assumption in cost-effectiveness analysis is that future dollars and health benefits have a lower value than dollars and health benefits available in the present. The scale of this “time preference” for present over future con-

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