Financing Sustainable Public Health: Design of a Herpes Zoster Prevention Bond to Fund Vaccination
Author(s)
Lefteris Zarkadoulas, FHAS CERA MBA1, Alen Marijam, MSc, PharmD1, Aikaterini Molla, FHAS MSc2, Nikos Kotsopoulos, MSc, PhD3, Mark Connolly, BA, MSc, PhD1, Maarten Jacobus Postma, PhD1.
1University of Groningen, Groningen, Netherlands, 2Bank of Greece, Athens, Greece, 3Health Economist, University of Athens, Athens, Greece.
1University of Groningen, Groningen, Netherlands, 2Bank of Greece, Athens, Greece, 3Health Economist, University of Athens, Athens, Greece.
OBJECTIVES: To design a novel financial instrument that is, an outcome-linked vaccine bond for Herpes Zoster (HZ), aimed to mobilize private capital to fund prevention of morbidity among aging populations hence, promoting sustainable, value-based investment in adult immunization
METHODS: We propose a 10-year Horizon-Linked Vaccine Bond that combines capital protection with performance-based value sharing. Investors receive a guaranteed 2% annual compounded return, providing a predictable baseline payout regardless of program outcomes. The bond is also designed with a tiered Return On Investment (ROI) structure, ranging from 1.5× to 3.5× of the initial investment, and sharing return agreement with 30% to investors and 70% to the public sponsor. This blended model aligns long-term investor incentives with the delivery of public health outcomes.
RESULTS: For a €10 million investment, the bond guarantees a €12.19 million payout at maturity, representing the 2% floor. In a 1.5× ROI scenario (total program value = €15M), the investor receives €13.03 million, and the government retains €1.97 million, yielding an IRR of 2.71%. In a 2.5× ROI scenario (€25M), the investor receives €16.03 million and the public retains €8.97 million, for an IRR of 4.69%. This structure ensures predictable baseline returns while distributing the majority of performance upside to the public.
CONCLUSIONS: Outcome-linked vaccine bonds, especially with longer-term horizons, offer a scalable, ROI-driven mechanism to align public health value with private capital. The structure preserves fiscal sustainability by retaining most savings for public payers, while delivering competitive, risk-adjusted returns tied to vaccine performance. This approach supports transparent, accountable, and innovative investment in adult immunization. While this design serves as an illustrative case, alternative structures for vaccine bonds should be explored to address varied policy objectives and investment profiles.
METHODS: We propose a 10-year Horizon-Linked Vaccine Bond that combines capital protection with performance-based value sharing. Investors receive a guaranteed 2% annual compounded return, providing a predictable baseline payout regardless of program outcomes. The bond is also designed with a tiered Return On Investment (ROI) structure, ranging from 1.5× to 3.5× of the initial investment, and sharing return agreement with 30% to investors and 70% to the public sponsor. This blended model aligns long-term investor incentives with the delivery of public health outcomes.
RESULTS: For a €10 million investment, the bond guarantees a €12.19 million payout at maturity, representing the 2% floor. In a 1.5× ROI scenario (total program value = €15M), the investor receives €13.03 million, and the government retains €1.97 million, yielding an IRR of 2.71%. In a 2.5× ROI scenario (€25M), the investor receives €16.03 million and the public retains €8.97 million, for an IRR of 4.69%. This structure ensures predictable baseline returns while distributing the majority of performance upside to the public.
CONCLUSIONS: Outcome-linked vaccine bonds, especially with longer-term horizons, offer a scalable, ROI-driven mechanism to align public health value with private capital. The structure preserves fiscal sustainability by retaining most savings for public payers, while delivering competitive, risk-adjusted returns tied to vaccine performance. This approach supports transparent, accountable, and innovative investment in adult immunization. While this design serves as an illustrative case, alternative structures for vaccine bonds should be explored to address varied policy objectives and investment profiles.
Conference/Value in Health Info
2025-11, ISPOR Europe 2025, Glasgow, Scotland
Value in Health, Volume 28, Issue S2
Code
EE471
Topic
Economic Evaluation, Health Policy & Regulatory, Study Approaches
Topic Subcategory
Novel & Social Elements of Value
Disease
Vaccines