Lessons from the Pandemic on the Value of Research Infrastructure Laurence S
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Roope et al. Health Res Policy Sys (2021) 19:54 https://doi.org/10.1186/s12961-021-00704-2 COMMENTARY Open Access Lessons from the pandemic on the value of research infrastructure Laurence S. J. Roope1,2* , Paolo Candio1,2, Vasiliki Kiparoglou2,3, Helen McShane2,4, Raymond Duch5 and Philip M. Clarke1,2,6 Abstract The COVID-19 pandemic has shed a spotlight on the resilience of healthcare systems, and their ability to cope ef- ciently and efectively with unexpected crises. If we are to learn one economic lesson from the pandemic, arguably it is the perils of an overfocus on short-term allocative efciency at the price of lack of capacity to deal with uncertain future challenges. In normal times, building spare capacity with ‘option value’ into health systems may seem inef- cient, the costs potentially exceeding the benefts. Yet the fatal weakness of not doing so is that this can leave health systems highly constrained when dealing with unexpected, but ultimately inevitable, shocks—such as the COVID-19 pandemic. In this article, we argue that the pandemic has highlighted the potentially enormous option value of bio- medical research infrastructure. We illustrate this with reference to COVID-19 response work supported by the United Kingdom National Institute for Health Research Oxford Biomedical Research Centre. As the world deals with the fallout from the most serious economic crisis since the Great Depression, pressure will soon come to review government expenditure, including research funding. Developing a framework to fully account for option value, and understand- ing the public appetite to pay for it, should allow us to be better prepared for the next emerging problem. Keywords: Option value, Research funding, Research infrastructure, Resilience Main text insurance, investing in spare capacity for emergency ser- Te coronavirus disease 2019 (COVID-19) pandemic has vices may seem inefcient in the short term, but has clear shed a spotlight on the resilience of healthcare systems, option value due to the ability it provides to respond to and their ability to cope efciently and efectively with uncertain emergencies. unexpected crises. If we are to learn one economic lesson Te concept of option value has evolved into two broad from the pandemic, arguably it is the perils of an overfo- separate, though closely related, versions. One version, cus on short-term allocative efciency at the price of lack sometimes referred to as ‘quasi-option value’, emerged of capacity to deal with uncertain future challenges. mainly from the literature on environmental economics In a seminal study, Weisbrod developed the concept and has emphasized the so-called ‘irreversibility efect’ that has evolved into ‘option value’ [1]. Te insight is that of environmental degradation from certain investments there can be value in having access to use of a public good [2–4]. A second version, sometimes referred to as ‘real or service, even if there is uncertainty as to whether or option value’ was motivated mainly by business invest- not it will ever actually be used. For example, rather like ment decisions, where the future value of an irrevers- ible investment is uncertain [5]. Tis version developed *Correspondence: [email protected] the similarity between investment decisions and fnan- 1 Health Economics Research Centre, Nufeld Department of Population cial options. Te two concepts are very similar, with only Health, University of Oxford, Old Road Campus, Headington, Oxford OX3 subtle diferences. Quasi-option value can be character- 7LF, UK Full list of author information is available at the end of the article ized as capturing the value of learning (and so reducing © The Author(s) 2021. Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. 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Health Res Policy Sys (2021) 19:54 Page 2 of 4 uncertainty) while preserving options; real option value Social Care, is to translate basic scientifc developments captures the value of preserving options, conditional and laboratory research into clinical benefts and the on learning [6]. Common to both concepts is that irre- clinical setting. It is one of 20 BRCs in England to have versibility of decisions, in the sense of removing future received funding during 2017–2022, following a competi- options, together with uncertainty over the consequences tive bidding process. It is divided into 20 themes and four of irreversibility, adds to the value of preservation [6]. In clusters: Precision Medicine; Technology and Big Data; this article, in contrast to considering investment deci- Immunity and Infection; and Chronic Diseases. Its total sions that may irreversibly erode option value, we will funding during 2017–2022 comprises around £114 m. consider the option value that investment in a public In contrast to funding granted to conduct specifc good can provide. studies (which cannot generally be diverted), research Te pandemic has presented some obvious examples infrastructure funding has the fexibility to facilitate of goods with major option value. Many countries have researchers to respond quickly and efectively to uncer- struggled, for example, with shortages of personal pro- tain major health issues as they arise, allowing pilot stud- tective equipment, health professionals, intensive care ies to be undertaken while seeking dedicated funding. In unit beds and mechanical ventilators—not to mention the case of COVID-19, the enabling nature of research capacity to test for the virus [7]. In the case of ventilators, infrastructure funding meant that some funding could be there is evidence that the problem was not necessarily repurposed at short notice to tackle the emergency. Tus, shortage of actual numbers, but rather a lack of infor- a number of research groups were able to rapidly divert mation infrastructure [8]. In the United Kingdom, in the resources from existing projects to address an emerg- frst wave of the pandemic, occupancy of beds compat- ing issue. Subsequently, many received signifcant funds ible with mechanical ventilation never exceeded 62% from other sources, but without the initial infrastructure at the national level, yet 30% of hospitals across Eng- support critical time would have been lost. Further, data land reached full saturation at some point [8]. Investing infrastructure, such as NHS DigiTrials [15], has allowed in infrastructure that makes real-time bed occupancy rapid analysis by having a system that routinely links data available to front-line workers could have enabled administrative data to outcomes of participants in clini- nearby hospitals to ease pressure on those exceeding cal trials. recommended bed occupancy. In normal times, build- Quantifying the value of research in general [16], and ing capacity in such ways may seem inefcient, the costs research infrastructure in particular, is a difcult multi- potentially exceeding the benefts. Yet the fatal weak- dimensional and intertemporal problem that is gaining ness of not adopting such strategies is that this can leave increasing attention [17, 18]. Using the Oxford BRC as healthcare systems highly constrained when dealing with an example, we posit that a major overlooked source of unexpected, but ultimately inevitable, shocks—such as value of research funding in general, and research infra- the COVID-19 pandemic. While in the last year there structure in particular, is its option value. Specifcally, the have been some extraordinary eforts to expand capac- option value from Oxford BRC funding attributable to ity [9–11], better preparation, including development of COVID-19 could be staggeringly high. Consider frst the infrastructure that would make capacity available when prospect of the Oxford vaccine making a substantial con- needed, would have saved many lives as well as, in the tribution towards ending the pandemic. Tis now seems long run, being more efcient economically. likely given that it has been found efective in Phase II/ We argue that a less obvious—but perhaps no less III trials [19] and is substantially cheaper and more eas- important—lesson from the pandemic on infrastructure ily stored than Pfzer and Moderna’s efective mRNA is on the option value of research. At the University of vaccines [20]. Te International Monetary Fund (IMF) Oxford, for example, researchers working on high-profle has estimated that COVID-19 will decrease world eco- projects, such as the Oxford vaccine [12], the RECOV- nomic output by a total US$ 11 trillion in 2020 and 2021 ERY (Randomized Evaluation of COVID-19 Terapy) [21]. Tis amounts to US$ 458 billion a month. A simple trial [13] and the Ofce for National Statistics (ONS) calculation suggests that if BRC infrastructure sped up Coronavirus Infection Survey [14], have been supported the development of an efective vaccine by just 1 day, the by the National Institute for Health Research (NIHR) value to the global economy could be up to US$ 15 bil- Oxford Biomedical Research Centre (Oxford BRC). lion.