News - Avian flu outbreak would slam U.S. economy, report finds

A severe avian flu outbreak would cost the U.S. economy $625 billion - about 5 percent of the gross domestic product - as employers struggled with absenteeism, lost production and a sharp decline in consumer spending, a new government report has found.

The economic impact, driven in part by fear and confusion, would be equivalent to a recession, according to the Congressional Budget Office report. The estimates are based on a pandemic that would sicken 90 million people in the United States and kill about 2 million.

The findings are the government's first attempt at a detailed look at the cost of what could be the most devastating public-health threat in nearly a century. The analysis, while neither definitive nor exact, provides a clear understanding in dollar terms of why an influenza pandemic presents not only a health crisis but also a threat to national security and the economy.

The CBO report estimates that 30 percent of the American population would become ill in a three-month outbreak, and about one-third of the U.S. work force would miss three weeks of work.

Senate Majority Leader Bill Frist, R-Tenn., who requested the CBO report, told a National Press Club gathering Thursday that the findings were a "a grim prognosis" for a nation that's struggling to regain its economic footing.

"Voluntary quarantining would reduce turnout at restaurants, shopping malls, sporting events, churches and schools. Demand would fall by 80 percent in entertainment, arts, recreation, restaurants and lodging for a period of up to three months. Retail trade would fall by 25 percent. The demand for medical and hospital services would surge. And a fear of travel, coupled with likely government-imposed restrictions, would lead to a dramatic decline in domestic travel as well as international travel," Frist said.

Avian flu has been centered mainly in Southeast Asia but is moving westward through migratory birds. The disease is transmitted from animal to animal, mostly among birds. Humans are contracting the highly lethal disease after close contact with infected animals.

If the virus, known as H5N1, mutates into a form that passes easily from person to person, the world would be hit with a catastrophic pandemic because virtually no one would have immunity to the new virus.

To date, 133 people in five Asian countries have contracted the avian flu virus and 68 have died, according to the World Health Organization.

In testimony Thursday on Capitol Hill, Dr. Michael Osterholm told the House International Relations Committee that a U.S. flu pandemic would affect the world.

"The global economy will literally shut down," said Osterholm, the director of the Center for Infectious Disease Research and Policy at the University of Minnesota. "Pharmaceutical supplies, including drugs and very important childhood vaccines not intended for influenza but for our everyday lives, will be in extreme short supply, if available at all. Health-care systems will be overwhelmed and, frankly, panic will reign."

The CBO report estimates that a mild outbreak, similar to the 1968 flu pandemic, would infect 75 million people, kill 100,000 and cost the economy $160 billion, about 1.5 percent of the gross domestic product, the total value of goods and services.

The Bush administration has asked Congress for $7.1 billion to prepare for a flu pandemic. Part of it would go to increase the U.S. stockpile of antiviral drugs such as Tamiflu from 2.3 million full treatments to 81 million.

President Bush also wants $1.2 billion to purchase 20 million full treatments of an experimental H5N1 vaccine and $2.8 billion for research into a cell-based flu vaccine that would allow American manufacturers to produce enough for the entire U.S. population within six months of a flu outbreak.

Health and Human Services Secretary Michael Leavitt said the CBO report shows "it is time for Congress to act on the president's request so we can immediately begin to implement our plans to prevent and contain a pandemic."

Roche Pharmaceuticals, which manufactures Tamiflu, is in discussions with several drug companies, including Teva Pharmaceuticals and Mylan Laboratories, to increase production of Tamiflu as demand increases worldwide, Roche spokesman Terry Hurley said.

KRT Wire | 12/08/2005 | Avian flu outbreak would slam U.S. economy, report finds