Cost-Benefit Analysis in the Context of Public Finance

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Pfizer-BioNTech COVID-19 vaccination program at Dubai Health Authority was established with an initial cash outflow of AED 5,550,000. The program was estimated to generate AED 1,950,000 in the first year. Its revenue is expected to grow at the rate of 15% each year afterward for a period (t=5years). The average cost of funds to the government is r=9%.

Pfizer-BioNTech COVID-19 Vaccination Program and its Objectives

Pfizer-BioNTech COVID-19 vaccination program at Dubai Health Authority is designed to develop an adaptive vaccination with higher efficacy than traditional and optimized vaccines. The program is a roadmap that places Dubai as a global medical destination that offers a comprehensive integration of high-quality healthcare services. The program aims at directing resources that ensure a happy and healthy environment for all tourists visiting Dubai (McArthur, 2021). Besides, the program integrates the current international guidelines issued by the Dubai Health Authority to improve the efficiency and integrity of public vaccination services. Therefore, it has invested in governance systems to develop regulatory policies that improve patient safety and promote tourism growth.

The program’s objectives have been to improve the quality and excellence of healthcare services in Dubai while enhancing patient experience, satisfaction, happiness, and trust. Through the Health Regulation Sector (HRS), the program licenses inspection facilities and healthcare professionals to comply with the best healthcare practices. The program also manages patient complaints and upholds all the rights by controlling the vaccines’ adverts, availability, and accessibility. Moreover, the program has developed digital infrastructure that strengthens the health of the tourists and manages e-health innovations to book appointments or report complications. Besides, it outlines the facility and professional requirements by disseminating the currently available information about vaccine preparation and administration.

The Project’s Revenue Over the Lifetime of the Project

Pfizer-BioNTech COVID-19 vaccination program expects to increase its revenue by 15% every year, which will cover all the operational costs during its lifetime. Based on the assumed figures, the program will realize some profits if it maximizes its operations and enhances the delivery of vaccines at the lowest level of resource wastage (Thomas et al., 2021). Most of its revenue will be generated from grants and tenders while participating in open opportunities.

Maintenance Over Lifetime Opportunity Cost

Cost Components: Investment

Pfizer-BioNTech COVID-19 vaccination program incurs the establishment cost, a sum of funds spent by the government to start it up. These include research expenses, the business plan with objectives, campaigning and advertisement costs, and digital infrastructural development. For instance, the WhatsApp integration for vaccination appointment booking is part of the required digital infrastructure (McArthur, 2021). The assumption of the initial capital invested at the start of the program is AED 5,550,000.

Cost Components: Operation and Maintenance

The operational costs include all the expenses incurred when running the program throughout its operational time. In this case, the direct costs include the laboratory activity fees and employees’ wages. Additionally, the program incurs costs to maintain the digital infrastructure and licensing processes that remain recurrent throughout the program’s lifetime. The initial investment is expected to cover all the expenses and address all the Pfizer-BioNTech COVID-19 vaccination program objectives. The program is eager to extend the protection of affordable care, which is subject to regulatory authorization based on the results from the foundation.

The Project’s Opportunity Costs, showing where and why these Costs will differ from Market Prices

The project’s opportunity costs exist because its provisions are distributed across several services. Notably, the Pfizer-BioNTech COVID-19 vaccination program responds to both mild and severe symptoms. One of the most critical opportunity costs is determining chemical stability and sterility limits by which the vaccines can be used or transported. Additionally, the program wants to maintain positive results to administer the vaccine to many people for better clearance. While addressing these challenges, the program has been accused of causing heart inflammations. Therefore, the program has choices between distributing more adaptive vaccines to places with baseline vaccines or addressing the cardiac side effects. Both choices demand research staff and intensive contracting services that would include hospitalization facilities. The integration of digital infrastructure is beneficial but hard to run because the software fails periodically and could time out manufactured vaccines.

The Benefits of Pfizer-BioNTech COVID-19 Vaccination Program

Pfizer-BioNTech COVID-19 vaccination program has many benefits, including positive results on the first trial conducted on children below 12 years. The vaccinations have a 90.7 success when applied to children, data that is submitted to United Arab Emirates (UAE) regulatory agencies for clearance. The score is higher than all the other clinical trials that have been earlier on. Therefore, the UAE cleared the project for children because its benefits outweigh the rare cardiac side effects. The adaptive vaccination designed under the Pfizer-BioNTech COVID-19 program has reduced the chances of causing heart inflammations. A literature review shows that unvaccinated individuals who previously had COVID-19 are completely immunized and have lower chances of getting infected (Ethicist, 2018). The vaccination appears to enhance the immunized insurance compared to the open risk that faces the unimmunized. The project has also invested in hospitalization facilities from which complications and myocarditis cases are analyzed. The admissions still prevent the Covid-19 complications when similar cases are observed from a couple of patients.

The Project’s Other considerations, limitations, and Risks

Pfizer-BioNTech COVID-19 vaccination program must consider the ethical issues accepted in different societies and regions intended to use the vaccine. Again, it has to consider that recommendations to vaccination of children below the age of 11 differ from individuals of other ages. Coronavirus immunizations currently supported and approved by the UAE are viable in forestalling actual results of COVID-19, including severe infection, hospitalization, and demise. Advisory Committee on Immunization Practices (ACIP) and Centers for Disease Control and Prevention (CDC) consider individual and general medical advantages and dangers alongside elements, for example, populace esteems, adequacy, and the possibility of execution when making antibodies recommendations. Ethicist (2018) believes that these clinical contemplations give medical care experts and general wellbeing authorities extra data on the utilization of COVID-19 immunizations.

The Pfizer-BioNTech COVID-19 vaccination program has its limitations and shortcomings that the consumers and the suppliers experience. Accepting the vaccine to the target market is a crucial factor. Some states do not believe in the vaccine and have the authority to fight the supply, making it hard for the program to reach the consumers. Having specific or different people with different complications must be considered because they might have worse side effects when they use the vaccine. For instance, lactating mothers or children under the age of 5 need to be vaccinated, but they cannot be vaccinated with the same drug other people use. Thus, the project ought to consider these cases and develop a new or advanced way to give the vaccination to the people. To cub these limitations, the organization should know what is expected from the market or target audience. After they have those in consideration, they should assess the project’s risks to yield considerable income.

The Net Present Value (NPV/PI/PBP) of the Project

Net Present Value (NPV) and Internal Rate of Return (IRR) are firmly related ideas in that the IRR of a venture is the rebate rate that would make that speculation have an NPV of nothing. One more perspective is that NPV and IRR are attempting to answer two separate however related inquiries. For NPV, the inquiry is, “What is the aggregate sum of cash that will make on the off chance that continues with this speculation, after taking into account the time worth of cash?” For IRR, the inquiry is, “If the organization continues with this venture, what might be the same yearly pace of return that it would get?” (Kabir et al., 2020). To get the Net Present Value, one must use the Net cash flow, the discounted rate, and the cash flow time.

Use the tables below for NPV calculations:

NPV

Table Table

The profitability index is given by the present value of future cash flow divided by the initial investment 12, 421, 500 / 5, 550, 000= 22.38

Therefore, the present value benefits of the projects generate 2238% more than the expenses.

Payback Period (PBP)

Year	Investment	Cash flows	Cumulative Cash flows
Year 0	5,550,000	1,774,500	1,774,500
Year 1	5,550,000	1,774,500	3,549,000
Year 2	5,550,000	1,774,500	5,323,500
Year 3	5,550,000	1,774,500	7,098,000
Year 4	5,550,000	1,774,500	8,872,500
Year 5	5,550,000	1,774,500	10,647,000
Total			12,421,500

Payback Period (PBP)

Pfizer-BioNTech COVID-19 vaccination program’s limited compensation period will consistently be lower than the restitution time frame. The project uses limited income, which will consistently be lower than the typical income. Therefore, one can take the initial investment of AED 5,550,000 against the periodic outcome after tax to get the time taken to recoup the initial investment in the business (5,550,000 ÷ 10,647,00) = 0.52. This means that it has taken 2.5 years for the program to recoup the initial investment.

The Rational of the Project’s Acceptance

Pfizer-BioNTech COVID-19 vaccination program is viable and should be accepted and implemented for its high-profit gains. The project’s NPV is greater than $0, making it suitable to implement and finance accordingly. According to Vatin et al. (2019), a greater NPV above $0 shows that the undertaking will want to pay revenue on all capital put resources into the venture. Therefore, it will acquire an abundance return or genuine benefit equivalent to the NPV. When in doubt, all activities with a positive NPV ought to be sought after. Additionally, the profit index shows that the project is profitable and can sustain its current expenses right after implementation. With a payback period of 2.5 years, the project is viable and likely to realize more profits than competing interests. The primary considerations influencing present worth are the receipt and the markdown loan cost. The higher the rebate rate is, the lower is the current worth of use at a predefined time later on, and their markdown rate for this undertaking is 9%. The undertaking with the briefest compensation period is less dangerous than the task with a more extended recompense period. The compensation period is regularly utilized when liquidity is a significant model to pick a task. When the venture has more limited restitution, it is likely to yield positive results.

Non-financial benefits associated with the establishment of the government entity

Most non-profit organizations are government initiated, and they are implemented regardless of the cost-benefit calculations for the benefit of society. The tasks that an administration chief in all likelihood use money-saving advantage examination is the kind of innovation utilized inside the school. The hardware required in the cafeteria to give solid or undesirable snacks and the gear required for craftsmanship offices inside the school presents a concise money-saving advantage. The main problem with money-saving advantage investigation is that each administration organization has a motivator to gauge good proportions for its ventures. Under all considerations, it must contend with different offices for reserves. Nobody can be sure with regards to the profits expected from a water system waterway or a roadway.

Pfizer-BioNTech COVID-19 vaccine project is aimed at helping society by eliminating and cubbing the spread of the COVID-19 and is therefore easy to convince the government to be cheap in and help run the project. The underlying assumption is that the government will use the public funds to finance the projects and take care of some external factors that might otherwise affect the project. The limitation is that the government can take advantage of the project by the private entity and take it as its own, which might affect the operational freedom of the central project managers. Therefore, taking advantage of money-saving advantages is the best approach that Pfizer can apply to overcome the apparent limitations of the ruling government.

A money-saving advantage investigation may neglect to represent significant monetary worries for exceptionally enormous undertakings with an interminable time skyline. The most common experienced financial worries include expansion, loan fees, changing incomes, and the current worth of cash. Fortunately, the government attempts to stay away from them since they run huge tasks. Takhtravanchi & Pathirage (2018) argue that money-saving advantage investigation or CBA is a valuable technique for business growth. Therefore, it is likely to enhance the operations being undertaken by Pfizer by allowing more access to resources and fewer governmental restrictions.

References

Ethicist, P. (2018). Reviewing student research: Can we consider bad science to be ethical?Journal of Empirical Research on Human Research Ethics, 14(1), 88-89.

Kabir, M., Lahlimi, A., Junaidu, A., Sham-Una, I., & Ahmad, M. (2020). Working capital relationship with firm profitability and size.International Journal of Economics, Business, and Accounting Research (IJEBAR), 4(03).

McArthur, R. (2021). Dubai introduces WhatsApp vaccine appointment bookings. Healthcare IT News is a publication of HIMSS Media.

Takhtravanchi, M., & Pathirage, C. (2018). Knowledge integration challenges and critical success factors within construction traditional procurement system. Knowledge and Performance Management, 2(1), 24-37.

Thomas, M., Lal, V., Baby, A., Rabeeh VP, M., James, A., & Raj, A. (2021). Can technological advancements help to alleviate the COVID-19 pandemic? a review. Journal of Biomedical Informatics, 117, 103787.

Vatin, I., Gorshkov, A., Kazimirova, A., Gureev, K., & Nemova, D. (2019). Calculation of payback period mineral wool with longitudinal fibers of ITE PARAISO (PAREXLANKO). Journal of Applied Engineering Science, 12(3), 207-216.

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