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Prevention and control of animal diseases worldwide
Part I: Economic analysis: prevention versus outbreak costs
6.4. Comparison of prevention costs to outbreak costs
In the case of HPAI, the most recent global needs assessments of prevention and response to HPAI
suggest that some US$ 2.27 billion would be required over a 3-year period (as discussed in section 4.2).
Of this amount, prevention and preparedness costs as such account for just over US$ 1 billion (Table 4). It
is noted that these calculations do not take into account the incremental operational costs involved, which
can be a significant part of the cost of strengthening VS.
Against this assessment, outbreak costs under the ‘most likely’ scenario and for H5N1 countries only are
estimated at US$ 5.34 billion per year for the direct production costs and losses alone (excluding
consequential losses) (Figure 20).
Adding consequential on-farm losses, the total direct impact comes to US$ 11.75 billion per year.
Assuming the impact of an outbreak spread over a period of 2 years (‘most likely scenario’) the total
direct impacts would be US$ 10.7 billion excluding consequential on-farm losses and US$ 23.5 billion if
these losses are included.
Moving towards scenarios B and C these costs increase further to US$ 12.3 billion and US$ 26.9 billion
respectively (in the case of scenario B) and to US$ 19.4 billion and US$ 42.7 billion respectively (in the
case of scenario C).
Before even considering the indirect impacts, the benefits of improved prevention by far outweigh the
potential outbreak costs and losses.
Adding potential ripple effects (only in terms of the potential losses in domestic and export markets) to the
above scenarios would bring the total impact to US$ 41.6 billion over a 2 year period.
The ‘benefit’ of improved prevention in this case is defined as the potential savings that could/should be
made on outbreak costs if an effective prevention and emergency preparedness structure is in place. It is
noted, however, that this relies on the assumption that a certain investment would result in gains in
productivity and export earnings. The extent to which this will occur will depend on the effective design
and implementation of the investment, to ensure the effective control of the disease. A risk factor will be
the re-appearance of the disease, as is often the case in practice. It is also noted that as several countries
start embarking on improving their prevention and control systems and strengthening their VS, some of
these losses would be mitigated; however, the timeframe of the calculations here (2-3 years) is relatively
short for such effects to be felt through.
In addition, other benefits include the potential contribution to poverty alleviation, as discussed in section
3.7, given that a significant number of the countries included in these estimates are defined as LDCs or
low income countries (Annex 3). Under the most likely scenario, in the event of an HPAI outbreak the
estimated direct impact (excluding consequential losses) for the LDCs as agroup ranges from US$ 72.6
million in scenario A (only 4 LDCs affected) to US$ 258 million in scenario B (8 LDCs affected) and
nearly US$ 600 million if all LDCs were to be affected (scenario C).
Furthermore, the investment in strengthening the control of a particular disease, e.g. HPAI, can have
important spill-over benefits on the entire VS.
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