Please ensure Javascript is enabled for purposes of website accessibility

The True Cost of This Disease Is Higher Than You Realize

By Sean Williams - Sep 6, 2015 at 1:18PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Influenza is so common you might dismiss it altogether, but this infectious disease hides a major intangible cost.


Source: Flickr user William Brawley. 

According to IMS Health, global pharmaceutical sales topped a whopping $1 trillion in 2014, and they're on pace to grow to as much as $1.3 trillion by 2018. These figures shouldn't come as a huge surprise with the costs of cancer treatment and certain infectious diseases, such as hepatitis C, soaring.

But sometimes, the cost to treat (or not treat) a disease is a lot higher than believed if you examine certain intangible factors.

A surprisingly "costly" disease
When we think about costly illnesses, influenza, or the common flu, may not be the first to come to mind. However, intangibly, it can be among the most costly to the average American. Based on a recent study from CVS/Pharmacy, a part of CVS Health (CVS 1.38%), almost two in five Americans in its survey (37%) missed a life event due to influenza.

The online poll of 2,000 people, which was conducted by Harris Poll, showed that 37% of respondents had missed get-togethers with friends, family gatherings, or an important work meeting because of flu-like symptoms. Furthermore, respondents stated they would be most upset if their flu-like symptoms kept them from missing a vacation getaway (63% of respondents affirmed this), family gathering (56%), wedding (54%), graduation (47%), or birthday party (43%).

Source: Flickr user Courtney Carmody.

Yet, when respondents were asked whether or not they get a flu shot annually, or if they planned to get one this year, just 58% affirmed that they do, although slightly more than three-quarters of seniors (76%) were part of the "yes" crowd. These results are actually much higher than the Centers for Disease Control and Prevention has recently noted. Between 2009 and 2013, the CDC notes that child vaccination rates (six months to 17 years) rose substantially to 56.6% from 43.7%. By contrast, adult vaccination rates (age 18 and up) were essentially flat, moving from 40.4% to 41.5%. 

CVS/Pharmacy's poll also tried to probe into the minds of these 2,000 individuals to determine what may have driven them to (or not to) get a flu shot. Nearly two in five (38%) suggested that convenience plays a role in deciding whether or not to get a flu shot. Additionally, of the 58% who responded that they get a flu shot annually, or planned to get one this year, 65% affirmed they believed it was the best method to prevent against getting the flu, with 38% overall believing it was the smartest move they could make to protect their family from catching the flu.

As Tom Davis, vice president of Pharmacy Professional Practices at CVS/Pharmacy, notes:

The simple fact is that getting an annual flu shot is the best protection available against catching or spreading the flu. 

Some flu facts you should know
Despite the prevalence of the flu, it remains one of the most undertreated diseases or disorders, based on the CDC's statistics.

I suspect the biggest reason for that, other than convenience, is the fact that the influenza vaccine is merely a best guess by researchers and vaccine developers. Vaccine makers can't make nearly enough flu vaccine overnight, so they rely on historical data and other factors from researchers to best forecast what strains of influenza might be most prevalent in the upcoming year. Amazingly, researchers are right a lot of the time, but it isn't a foolproof method. If vaccine makers produce an ineffective vaccine, there's not much that can be done to correct the error.

The other factor working against vaccine makers is that a flu vaccine isn't a cure, nor is it well understood. Personally, I must hear a few dozen people each year discussing how their flu shot got them sick, which is far from the case. Flu shots involve using inactive strains of the flu that teach your immune system what to be on the lookout for. FluMist, which is made by MedImmune, a subsidiary of AstraZeneca (AZN -0.18%), is a Food and Drug Administration-approved nasal spray that does use live attenuated strains, but that's not high enough in dosing to give you the full effects of the flu. In reality, a flu shot or spray will not give you the flu. 


Source: AstraZeneca. 

But, it also may not stop you from getting the flu. A flu shot isn't a cure-all. Instead, it's a means to teach your immune system what to be on the lookout for, and to hopefully lessen the severity of your symptoms should you contract the flu. Although influenza shots are strongly recommended for children and the elderly, who have weaker immune systems to begin with, it's adults between 18 and 64 who are a major target as well, because if this group is getting a flu shot, there's a good chance their less severe symptoms will keep them out of hospitals and primary care clinics. This leaves doctors available to care for those who really need it, such as children and the elderly.

The push for awareness
So, how do we spread this message? It's partially the responsibility of the CDC, which in August runs its National Immunization Awareness Month campaign. However, the CDC is really relying on word of mouth, businesses, and healthcare providers to be at the front line of their message.

It's possible the Affordable Care Act, perhaps known better as Obamacare, could be a driving force that pushes flu vaccine rates higher. Obamacare is geared, first and foremost, at reducing the rate of uninsured people in this country. With more than 11 million people enrolled through Obamacare exchanges, and the uninsured rate falling to 9.2% in the first quarter per the CDC, it's plausible to presume that more people will be visiting their primary care physician than ever before. One of the basic reasons for that visit could be as simple as getting a flu vaccination.

Vaccine makers also have a new trick up their sleeve. While you can still find trivalent vaccines floating around -- trivalent vaccines focus on two type A influenza strains and one type B strain -- most have shifted their focus to quadrivalent vaccines -- two type A & B influenza strains. Type B influenzas are particularly prevalent toward the later half of the flu season, so these quadrivalent's should help lessen the final push that the flu unleashes each cycle.

Source: Sanofi.

Clearly, any uptick in flu vaccination rates could be great news for vaccine makers -- well, most anyway. Poor AstraZeneca with FluMist has never quite taken off, despite its convenience. I suspect its higher price point may be the culprit holding FluMist back from markedly higher sales. Instead, CSL's soon-to-be vaccines, Fluvirin and Flucelvax (CSL is in the process of acquiring these vaccines from Novartis, with the deal expected to close in the second-half of the year), and Sanofi's (SNY 1.96%) FluZone are the likely beneficiaries.

The focus on quadrivalents is not only good for consumers because it could presumably offer better Type B strain protection, but vaccine makers can charge a bit more for this next-generation flu shot, so it could lead to a little more in the profit department for these two companies.

Specifically, it could be a boost for Sanofi and FluZone, by far the largest player in this space. FluZone's broad target audience is what sets it apart from its peers, with the product marketed at infants as young as six months. Most peers have an age cut-off for children that's markedly higher. Additionally, FluZone can be administered with a needle that's 90% shorter than normal, thus making an injection as painless as possible for needle-phobic people. Finally, there are also multiple dose options, because one-size-fits-all doesn't always work. Having topped the billion-dollar plateau in sales before, it's possible FluZone could do it with regularity if vaccination rates improve among adults.

It remains to be seen if Obamacare or ongoing vaccine education campaigns will have any effect on vaccine rates, but it's plainly evident from CVS/Pharmacy's report that something should be done; otherwise, the intangible costs of influenza may continue to grow.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sanofi Stock Quote
Sanofi
SNY
$51.01 (1.96%) $0.98
CVS Health Corporation Stock Quote
CVS Health Corporation
CVS
$93.94 (1.38%) $1.28
AstraZeneca PLC Stock Quote
AstraZeneca PLC
AZN
$65.95 (-0.18%) $0.12

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.