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LAM: Healthcare Solutions to COVID-19
NCPERS hosted a webinar with Lazard Asset Management, “Life on the Other Side of COVID-19” with Ronald Temple. Ron broke down the COVID-19 crisis into 4 parts: healthcare, the economy, policy responses, and investment implications. In this blog we will breakdown the healthcare topic.
The healthcare topic focuses on testing, therapies, and a vaccine. We need widespread testing to identify the people who have COVID-19. We need effective therapies to reduce the severity of the virus and reduce death rates. Finally, we need a vaccine to immunize people over time and get back to life as normal.
LAM: Healthcare Solutions to COVID-19
NCPERS hosted a webinar with Lazard Asset Management, “Life on the Other Side of COVID-19” with Ronald Temple. Ron broke down the COVID-19 crisis into 4 parts: healthcare, the economy, policy responses, and investment implications. In this blog we will breakdown the healthcare topic.The healthcare topic focuses on testing, therapies, and a vaccine. We need widespread testing to identify the people who have COVID-19. We need effective therapies to reduce the severity of the virus and reduce death rates. Finally, we need a vaccine to immunize people over time and get back to life as normal.
Widespread Testing
Currently, the U.S. has only administered 7.1 million tests for COVID-19. If you divide that by the population, that implies 2.45% of the population has been tested, but keep in mind that not every one of these tests is a different person.We have made progress in terms of the pace of testing; during the week of April 26th, we tested 1.6 million people. Unfortunately, this is still far from where we need to be. For example, the United Arab Emirates has already tested 12% of its population. Countries such as Italy, Portugal, and Spain have administered significantly more tests per capita than the U.S. The U.S. is currently testing approximately 200,000 to 300,000 people per day. That might seem like good progress, but unfortunately, it is very far from where we need to be.
How much testing should we be doing?
There is considerable disagreement on this. For example, Dr. Scott Gottlieb, the former head of the FDA, estimates that we need approximately 3 million tests per week in the U.S. before we can start reopening safely. A panel of experts at Harvard University published a report, “Roadmap to Pandemic Resilience”; indicated that we would need to test 5 million people per day to reopen the economy safely. There are also arguments for 20 million tests per day.We are making progress, but the point is, it is not fast enough. We have had some achievements, such as COVID test results in 15 minutes which represents tremendous progress versus two months ago when you had to wait 3 to 4 days for test results.
Effective Therapies
There are 2 primary therapies at this point. The first therapy, remdesivir, was developed by Gilead to treat Ebola. The drug was never approved because the Ebola crisis ended, but the drug is now being tested, and it's showing positive results in two separate trials. In the first trial, the National Institute for Allergies & Infectious Diseases tested 1,063 patients across 47 cities in the U.S., and in 21 countries in Europe and Asia. This trial found that patients admitted to the hospital and given remdesivir as a treatment were discharged after 11 days, opposed to 15 days for patients given the placebo. That is over a 30% reduction in the amount of time at the hospital. This is very important because hospitals are overwhelmed and any reduction in the duration of hospitalization frees up beds for additional patients.In the same trial, it was also determined that the death rate declined to 8% for patients treated with remdesivir versus 11.6% for patients who were given the placebo. This is a meaningful decrease in death rates.
In a second trial released on the same day, Gilead tested a 5-day treatment versus a 10-day treatment and found that the 5-day treatment was just as effective. This is very important because Gilead currently only has 1.5 million units of the drug. If patients can be treated in half the time with half the does, Gilead's stockpile should treat twice as many patients. It is worth noting that remdesivir is administered intravenously to patients in a hospital. Hence it is only for severe cases, but this is still promising as it significantly reduces death rates and cuts the length of hospitalization.
The second therapy is a combination of hydroxychloroquine and azithromycin. We are less optimistic about this treatment based on medical professional opinions as the medication is already being used in hospitals with no notable benefits to date.
Vaccine
Hopefully, at some point, we will have developed therapies to make COVID-19 less severe, so people will go about their lives just like they did before during flu season. There's a risk, but if you've been immunized, you should be safe. What is important to note about the vaccine process is that we have never before had so many resources, people, or money spent on a single vaccine globally. The critical thing to keep in mind is that it has generally taken between 4 and 10 years to develop vaccines. Most people are currently talking about having a vaccine within a year. We are optimistic, but worry that expectations are too high.Stay tuned for the economy section of the COVID-19 crisis.
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