The Homeland Security Research Corp. (HSRC) has released a new report that predicts that COVID-19 will be extremely lucrative for companies that offer products that can help control the spread of the disease. The cumulative market for the four-year period between 2020 and 2024 could be worth anywhere from $1.7 to $2.2 trillion depending on how long it takes to get the disease under control.
Much of the demand for COVID-related products will come form the U.S., which is expected to account for 22 to 25 percent of the roughly $2 trillion total. The country will spend anywhere from $55 billion to $112 billion on COVID products every single year, with the former number reflecting a best-case scenario in which mass vaccination is ready by the summer of 2021. The latter number is more likely if the vaccine is not ready until 2024.
The numbers are not all that surprising given the fact that the U.S. annually spends far more on healthcare ($3.3 trillion) than any other country in the world. However, the HSRC notes that that expenditure has not yet corresponded to positive COVID-19 outcomes, which is to say that the U.S. is spending more money and getting worse results. The country has already had more than 120,000 deaths (and counting), while China’s total is closer to 4,500 even though it was the epicenter of the outbreak and has a much larger population.
The HSRC attributed the discrepancy to the dramatically different policy responses of the two countries, noting that the U.S. treated COVID-19 as a political issue rather than a health issue, and that the Trump administration still does not have a consistent mitigation strategy. In the meantime, many uninsured people have chosen not to seek medical care to try and avoid the high costs of treatment.
China, on the other hand, implemented a sweeping lockdown and leveraged its extensive surveillance network to help track the spread of the disease. The citizens were also far more willing to wear masks, while the government was willing to invest in public health initiatives to contain the disease. In light of the poor response of the Trump administration, the report hypothesizes that U.S. consumers will ultimately spend more on COVID-19 products because that is currently the only viable option they have to fend off the pandemic.
June 30, 2020 – by Eric Weiss