COVID-19 Vaccines – An Injection of Hope?

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Four companies have now announced that trials of their vaccine have shown an effectiveness rate of between 70 and 95% against COVID-19.

Renewed optimism flows and this is clearly great news, but it did leave me wondering what 90% (say) effectiveness means. We know the key risk factor for COVID mortality is age (see the XPS COVID-19 Tracker). So, does 90% mean 99% effective for a 30 year old but 50% effective for an 80 year old? The pharmaceutical companies have reported that in some cases the over 65s have been well protected in their trials, but we do not know how many of these people were in the most vulnerable group, the over 80s. The companies concerned have not yet published data segmented by age or sex.

As we have seen, particularly in the second wave of the pandemic, the infection rate was driven by the younger generation and then progressed to the older and more vulnerable population which is when the number of deaths increased significantly. Hence an important consideration is whether a vaccine just stops you getting ill (this is the vaccine trials effectiveness test) or whether it stops transmission too, particularly for asymptomatic cases. If it doesn’t prevent transmission, or the virus mutates, this means the disease will continue to spread to those who are vulnerable where the vaccine may be less effective.

Table 1 shows the effectiveness of the flu vaccine (as a comparator reduces with age.) The overall effectiveness is lower than the anticipated COVID-19 vaccine because the flu virus mutates more frequently, and a new flu vaccine has to be developed every year to protect against the most predicted common strains.

Table 1 - Vaccine Effectiveness (VE) in the UK*

Table 2- Number of deaths due to the flu in the UK*

Where vaccines become less effective or are less effective for those most vulnerable, more people can succumb to the disease and it can have a multiple effect. See Table 2 and; in particular, the 2017/18 flu season. It is not difficult to conclude that the number of deaths without a flu vaccine might be at least as serious as COVID-19. Conversely, if the high effectiveness of the COVID-19 vaccine is maintained across the most vulnerable and older age groups, the recent vaccine announcement could be very good news indeed. What about take up rates? Table 3 shows the figures for the flu jab.

Table 3 – Flu vaccine take up rate in the UK*

The take up rate is fairly stable for the flu, and it is not universally offered free of charge, so it is difficult to estimate the take up rate of the COVID-19 vaccine. Vaccination programs generally work on the theory of herd immunity, so unless there is a reasonable take up (or people have immunity otherwise) it may take a while for COVID-19 to become rare. However, the proposed plans of giving the vaccine to the most vulnerable first should decrease the death rate as long as the take up rate in these groups is high.

There’s lots of other factors such as length of immunity and how frequently the vaccine will need to be repeated, but the evidence that the flu vaccine reduces effectiveness with age together with partial take up rates suggests COVID-19 could be with us, albeit mitigated, for sometime yet. In addition, the direct impact of long COVID-19 and the indirect impact of recession and delays to NHS operations means the impact on longevity will be felt over the coming years.

XPS have extensively researched and built a model to assess the impact of COVID-19 on future longevity for pension schemes which is dependent on their members’ vulnerability to the underlying causes of the disease as well as exposure to the indirect impacts such as deprivation. A vaccine is built into the model and our best estimate scenario is a liability reduction of between 1.5% and 3.5% depending on a scheme’s membership characteristics. We are beginning to integrate this work with accounting year ends and triennial valuations for our clients and more information is here (XPS COVID-19 Analytics) so both trustees and corporate sponsors can allow for the impact of the pandemic in their assumptions for different valuation requirements as well as assess the uncertainty of such assumptions. Please do take a look.To view our XPS COVID-19 Impact Analytics and videos, click here

If you would like more information or to comment please contact Matthew Plail.

To view our XPS COVID-19 Impact Analytics and videos, click here.

Sources: This data is available from here and can be accessed from Public Health England. See the Open Government Licence for the terms of sharing this data. Click here