Dengvaxia and the Economic and Social Implications of Immunization in the Philippines

Samantha Nepomuceno and Bernice Parayno

Immunization enables an individual’s immune system to become resistant to a certain type

of infectious disease. Immunization is not only beneficial to an individual, but also to those
surrounding him or her. We know that when a significant amount of individuals are immunized
there is a positive spillover to society. Known as the ‘herd immunity’, the group of individuals
who do get immunized provide protection to those who are not by decreasing the chances of
catching and spreading the contagious disease. In turn, society’s marginal social benefit curve
increases, and only those who were immunized shoulder the cost. This is a positive externality.
However, when handled poorly, this program can also bring about the opposite effect. For this
reason, will analyze the specific case of the Dengvaxia controversy in the Philippines.

Immunization is a type of positive externality, allowing a third-party to reap its benefits.

The positive spillover to society can be depicted by the marginal social benefit, which is the sum
of the marginal external and private benefit. The marginal external benefit is the benefit gained by
those who may or may not be vaccinated, while the marginal private benefit is the benefit gained
by the individual who got vaccinated. According to Bloom, Canning & Seiguer (2011), investment
in an individual’s health causes an increase in human capital. Thus, increasing worker productivity
and economic value and creating a boost in economic growth. The overall marginal social benefits
of immunization can be categorized into health care cost savings, care-related, outcome-related
and behavior-related productivity gains, community health and economic externalities, risk
reduction and health gains (Barnighausen et al, 2014).

Immunization can decrease health expenditure costs because of the prevention of further
hospital check-ups, medicine purchases and burden on caretaker for recovery. Outcome and
behavior related productivity gains is significant in children who get vaccinated. According to
Bloom, Canning & Seiguer (2011), comparing cognitive test scores of children who were and
weren’t vaccinated in the Philippines, there is a significant effect of vaccination in the children’s
cognitive test scores. Given that children are more susceptible to infectious diseases, vaccination
can improve their cognitive function and educational attainment at a young age. Improvement of
the population’s health through immunization can affect the economic productivity of the nation

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(Barnighausen et al, 2014). It reduces time lost to illness and increases healthy days of vaccinated
and unvaccinated people, increasing their utility and productivity.

The market must produce where marginal social

benefit and marginal cost are equal, which is point A
in Graph 1, in order to obtain efficiency. Although at
this point, the immunization provided by the market
is not at its optimum. This is when the government
can subsidize the production of the good or service so
that more is provided to reach optimum production.
The government subsidy is the blue box illustrated in
Graph 1.

Vaccination programs in itself are beneficial to society because it prevents the spread of
contagious diseases to the one being administered the vaccine, as well as to the rest of society.
This was the intended effect of the Dengvaxia vaccination program that the Philippine government
launched back in 2016. Dengvaxia, a dengue vaccine created by the French pharmaceutical giant,
Sanofi, was administered to over 830,000 Filipino children from the NCR, Region III, Region IV-
A, and Region VII (GMA Network, 2018). Initially, this received positive attention with the
Philippines being the first Asian country to clear dengue vaccine (France-Presse, 2015). Dengue
is the fastest spreading mosquito-borne disease in the world and has plagued the Philippines for
years. In 2015 alone, there was a reported 200,000 cases of dengue in the Philippines (Herriman,
2016).

With this disease rampaging throughout the country, the vaccine was a ray of hope to many
Filipino parents seeking to save their children from contracting the disease. From April 2016 to
December 2017, over 830,000 schoolchildren were vaccinated with Dengvaxia in the hopes of
reducing the cases of dengue. However, the controversy started when an 11-year-old boy died
several days after receiving the vaccination. The boy had a heart condition prior to this vaccination
and later, autopsy reports show that the boy died of a congenital heart failure not linked to the

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Dengvaxia vaccine. However, some speculate that the vaccine triggered this death (Refraccion &
Orejas, 2016).

In the months to come, several more cases of children being hospitalized were speculated
to have been linked to the Dengvaxia (Aurelio, 2018). The program’s hasty implementation was
also later questioned by officials. According to, physician Edsel Maurice Salvana, the program
was implemented shortly after the vaccine’s approval in the Philippines. Vaccination programs
such as these would have usually gone through years of use in private practice and post-marketing
studies to collect more data. The vaccine program; however, was implemented in the Philippines
months before the World Health Organization (WHO) had approved it (Salvana, 2018).

In November 2017, Sanofi released an updated report on the vaccine. The report says that
the vaccine was found to increase the risk of contracting a more severe form of dengue for those
who took the vaccination but had not been previously infected with dengue. This caused major
outrage among the public which led to the suspension of the vaccination program as well as the
withdrawal of the vaccine itself from the market (GMA Network, 2018).

In the months after, many news reports of Dengvaxia-vaccinated children who were
hospitalized surfaced. This, along with the media’s rampant reporting of the vaccine’s adverse
effects and speculated vaccine-caused deaths, as well as the public’s already negative response to
the vaccine has led to the decrease in immunization rates in the Philippines and the phenomenon
called Vaccine Hesitancy, which is the refusal or delay of administering vaccines despite
availability (Fatima & Syed, 2018). Effects of this controversy can be seen in the measles outbreak
in 2019. Because of the rise in vaccine hesitancy, less and less Filipinos are getting vaccinated for
other diseases such as measles -which is easily prevented with two doses of measle vaccine
(Cabico, 2019).

Despite all this, we can still argue that society as a whole still benefits from the Dengvaxia
vaccination program. According to Dr. Maurice, the reason the government went ahead with the
program was because statistics showed that the vaccine was indeed safe. The effects on those who
had not been infected with dengue had only appeared later on and was promptly dealt with by

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Sonafi, which updated the label (Salvana, 2018). “Previous studies had shown that nearly 90% of
Filipino children in the vaccinated age group had been previously infected with dengue, and the
remaining 10% were likely going to get it in the next few years anyway. So from an overall
perspective, the potential harm to seronegatives (those who have not been infected with dengue)
far outweighed the benefit to the seropositives (those who had been infected with dengue),”
(Salvana, 2018).

We can see in the Graph 1 that the marginal social benefit of getting vaccinated with
Dengvaxia far exceeds the marginal private benefit. The marginal social benefit includes health
expenditure savings, physical, mental and intellectual gains and community health and economic
externalities, regardless of whether they were vaccinated. Improvement of the population’s health
through immunization increases strength of the immune system and reduces days of sickness. This
results from an increase in health stock and investment thus leading to more productive days.

So there is indeed a positive externality caused by the

program if we were to follow the statistic that there are more
children, who were infected with dengue previously,
vaccinated and thus, more children reaping the expected
benefits of the vaccine. The one’s bearing the cost are those
who were administered the vaccine. However, since not all
those who were vaccinated had the same effect we can also
argue that for the children who were not infected with dengue
previously, were affected by a higher marginal damage which raises the marginal social cost
causing a negative externality.

On one hand, the vaccine seemed to have done its intended purpose and left no side effects
for those who had already caught the dengue virus. On the other hand, those who had never been
infected with the dengue virus suffer from more serious symptoms aggravated by the vaccination.
The question of ‘which effect dominates’ is still ambiguous and would require more empirical
research.

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 Regardless, overall immunization coverage has decreased significantly. Immunization
programs were met with uncertainty and hesitancy, affecting mostly the susceptible population,
which are the infants and younger children. Parents are now afraid to have their children vaccinated
for fear of unfortunate results. There was a reported 20,287 cases of measles with 199 deaths in
2018 ( World Health Organization, UN Children's Fund, 2019). The measles outbreak can be seen
as an effect of the prevalence of anti-vaccination among Filipinos caused by the Dengvaxia
controversy. The increase in immunization programs skepticism decreased the overall
immunization coverage, thus causing lower resistance among younger children, decreasing the
presence of herd immunity.

Overall, the significance of analyzing the economic and social implications of

immunization in the Philippines is to understand the impact on society, to find a solution to the
problem and to avoid future circumstances of the same nature. As said before, immunization can
have both positive and negative externalities when not handled correctly. Thus, knowing its effect
on society enables us to draft and adjust current policies to adapt to current societal conditions.
Aside from this, analyzing the causes and effects of the immunization problem in the Philippines
allows us to find the root cause of the problem and create a solution for it. The government cannot
let slip ups like the Dengvaxia controversy happen again because of the detrimental cost it has to
society. The government must take into account all the significant benefits and costs to correctly
assess the next plan of action.
References

Aurelio, J. M. (2018). No Dengvaxia link yet to 14 deaths. Retrieved from Inquirer:

https://newsinfo.inquirer.net/959489/no-dengvaxia-link-yet-to-14-deaths/amp

Bloom, David E., David Canning, and Erica S. Shenoy. 2012. The effect of vaccination on
children’s physical and cognitive development in the Philippines. Applied Economics 44, no. 21:
2777 - 2783. doi:10.1080/00036846.2011.566203.

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Barnighausen, T., Bloom, D. E., Cafiero-Fonseca, E. T., & O'Brien, J. (2014). Valuing
Vaccination. Proceedings of the National Academy of Sciences of the United States America,
111(34), 12313-12319. doi:10.1073/pnas.1400475111

Cabico, G. K. (2019, March 6). Beyond the Dengvaxia scare: Complacency, devolution of health
system also account for measles outbreak. Retrieved from PhilStar:
https://www.philstar.com/headlines/2019/03/06/1898870/beyond-dengvaxia-scare-complacency-
devolution-health-system-also-account-measles-outbreak

Fatima, K., & Syed, N. I. (2018, December 8). Dengvaxia controversy: impact on vaccine
hesitancy. J Glob8 Health.

France-Presse, A. (2015, December 23). Philippines the first Asian country to clear dengue
vaccine. Retrieved from ABS-CBN: https://news.abs-cbn.com/focus/12/23/15/philippines-the-
first-asian-country-to-clear-dengue-vaccine

GMA Network. (2018, February 28). Dengvaxia: A timeline. Retrieved from GMA Network:
https://www.gmanetwork.com/news/news/specialreports/644950/dengvaxia-a-timeline/story/

Herriman, R. (2016, February 10). Philippines reports more than 200,000 dengue cases in 2015.
Retrieved from Outbreak News Today: http://outbreaknewstoday.com/philippines-reports-more-
than-200000-dengue-cases-in-2015/

Refraccion, G., & Orejas, T. (2016, April 26). DOH: Boy who died after anti-dengue injection had
heart condition. Retrieved from Inquirer: https://newsinfo.inquirer.net/781773/doh-boy-who-died-
after-anti-dengue-injection-had-heart-condition

Salvana, E. M. (2018, February 6). What went wrong with the breakthrough dengue vaccine? (K.
F. Eng, Interviewer)

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World Health Organization, UN Children's Fund. (2019). UNICEF-WHO Philippines: Measles
Outbreak, Situation Report 8, 2 April 2019. ReliefWeb.