Oliver Wyman

Thanks for the question Christine. I would structure the problem in three dimensions: Effect of crisis on Humans health and society, Effect of crisis on Science and Pharmaceutical development, Effect of crisis on larger economy Effect on Humans health and society: COVID-19 is twice as contagious as the seasonal flu. This is based on the current data, it might well be that it is much more contagious due to cases we are not able to measure. Having rigorous scientific epidemiological studies will be key to establish this The infectious period is a median of 5.5 days (up to 14 days), while the annual flu is commonly a 3-day period; data suggests that viral shedding continues beyond symptom resolution Case fatality rates are trending at 4.9% globally (vs. 0.1% for the flu). Same applies as for contagiousness: rigorous studies will be needed to assess how many people were infected. Diamond Princess testing estimated asymptomatic rate of 17.9%; emerging sources in Asia suggest potentially higher rates. No herd immunity exists yet as the virus is novel in humans: Social distancing (quarantines, WFH, school closures) is the only “brake” to slow the spread Other effect on Health & Wellbeing: it’s early to define other effects of crisis on overall Health & Wellbeing of people, however there are some first indicators: Mental Health: In the US Suicide Hotlines are experiencing very high volumes of calls, as the social isolation, fear of unemployment and disease is having a toll on people’s mental wellbeing. The problem is for sure not only an American one Domestic violence: there have been several media reports across countries (e.g. US, Switzerland) that this is becoming a major problem due to the curfews. Reduced ability to work out with consequences both on mental and physical health Effects on Healthcare delivery Capacity of ICUs / number of respirators are mentioned often in the media. One additional important point is the training and availability of care personnel. Several countries have called retired medical personnel to fill the gaps Low and Middle-Income countries will have a much tougher time and need not to be forgotten while we focus on our own problems. There are also reports that the situation in refugee camps are catastrophic Oliver Wyman has developed a tool to predict hospital supply and demand, and is helping several healthcare providers to prepare for impact (You can find the model here: https://oliverwymangroup.wufoo.com/forms/s12hwj5h0qqcxx1/) Effects on Science Being a scientist by training, I have to say that this is one area I see mostly positive developments Scientific community and publishing of results: Increased collaboration by the scientific community across the globe Use of pre-print services for scientific publications for quicker knowledge dissemination Quick crowd review of results, with timely retractions of wrong findings Extended open-access to published literature: Elsevier has made free access available for 20,000 related articles. Let’s hope this is the beginning of a trend of easier to access scientific knowledge On the downside: many universities across the world are ramping down research in biomedical sciences due to employer safety and social distancing rules, resulting in slower progress in overall research Development of vaccines and therapeutics It took Moderna Therapeutics only 42 days from the sequencing of SARS-CoV-2 to develop a new vaccine candidate, clinical trials started last week. However, the development of a new vaccine will likely take more than a year. And a year is an unseen success in vaccine development Other therapeutics are currently in development and will likely come to market earlier than a vaccine. However, those drugs will not help stop the spread of the disease, but only reduce mortality and time in ICU and therefore have a positive impact on health systems Infectious diseases, while having a heavy toll on global health, were not in the focus of most pharmaceutical producers and public due to low impact on the developed world. We are currently seeing a shift in both Effects on overall economy Oliver Wyman has developed three scenarios and their impact on the overall economy Scenario 1 (Outbreak suppression in 4-6 months): Supply chain shocks in some sectors; Chinese manufacturing shutdown in part tempered by inventories stockpiled in advance of Lunar New Year Corporate and government-mandated travel restrictions lead to drop-off in demand in airlines and hotels and impact some retail supply and demand Earnings dented for 1-2 quarters post outbreak with gradual recovery and rebounding consumer confidence allowing companies to return to normal 2-3 quarters later Small local businesses (e.g., restaurants, gyms, salons) struggle to tread water during suppression measures, some do not reopen Central bank intervention and government stimulus implemented As international travel restrictions and quarantines are lifted, recovery in travel and hospitality begins Scenario 2 (6–12 months to rein in pandemic): Employers reluctant to relax travel and WFH mandates without guidance from public health officials Vulnerable industries experience a continued drop in demand driven by suppressive measures and shaken consumer confidence; take measures to stabilize balance sheets and ensure liquidity Supply chain shocks play out over a six+ month period, after which momentum could begin to stabilize and recover Moderate to potentially severe recession in impacted countries; larger, more diversified economies with less dependence on international trade and/or foreign income than other economies prove better able to weather slowing growth Significant central bank intervention and government support programs (e.g., extended unemployment insurance, credit support for SMEs) are implemented Some governments may choose to remove suppression measures to resuscitate economy, leading to restart of once dormant economic sectors, but re-emergence of COVID cases suggests more suppression measures may be needed Scenario 3 (12+ months; ongoing pandemic): Severe recession on the order of Global Financial Crisis in 2020, possibly into 2021 Dramatic drop in demand (consumer confidence, access to supply, part-time/gig economy workers with less discretionary income) results in severe contraction in Q2 and Q3 with uncertain recovery in Q4 Companies in particularly vulnerable industries (travel, energy, hospitality) require additional liquidity, and may trigger complications for related industries Massive central bank intervention plus government stimulus injected to protect vulnerable workers and businesses on a scale exceeding TARP Some governments may choose to remove suppression measures to resuscitate economy, leading to restart of once dormant economic sectors, but re-emergence of COVID cases suggests more suppression measures may be needed For more information about those three scenarios: https://www.oliverwyman.com/our-expertise/hubs/coronavirus.html