Input variables are shown in Table 1. Conservative values favoring no action were used to justify alternative strategies. The study was conducted on Singapore's 2004 midyear population of 4,240,300 (16), divided into 3 age groups, each consisting of 2 risk groups (low and high risk, according to underlying medical conditions predisposing the patient to influenza complications), for a total of 6 groups that represented differing infection outcomes and drug responses (13).

The clinical attack rates during the 1918 and 1957 pandemics were 29.4% and 24%, respectively (23), and attack rates in Singapore during the 1967 pandemic were 12.8%–36.4% (22). This study assumed a base clinical attack rate of 30% (range 10%–50%), corresponding to rates in other studies (4,13,24).

Case-fatality rates were derived from Singapore's excess deaths from interpandemic influenza; hospitalization and death were assumed to occur only in clinical influenza. To reflect hospitalization rates in relation to case-fatality rates, both rates were correlated. For outpatient visits, clinical influenza patients were assumed to seek medical care and take medical leave. However, some patients may not be treated effectively within 48 hours of infection, and they were assumed not to benefit from treatment.

For pandemic duration, influenza activity in tropical climates commonly rises above the baseline for >12 weeks (31,33), compared to 6 weeks in temperate climates (34). This study assumed a 12-week pandemic duration base value with a range from 6 weeks (average temperate duration) to 24 weeks (assumed vaccine development).

Individual economic value was calculated from the net present value of future earnings for average-aged persons in the respective age groups, adjusted for age. Other costs included were hospitalizations and work days lost; all costs were standardized to 2004 Singapore dollars.

This study relied on international studies on oseltamivir. Oseltamivir has a good safety profile with insignificant rates of severe adverse events and drug withdrawal (9). Costs from side effects were thus assumed to be insignificant compared to costs for pandemic illness and deaths. The known safe administration duration of 8 weeks represents only studied durations (35). Extension is assumed possible, and the model included up to 24 weeks' prophylaxis. Oseltamivir trials have lacked the power to detect mortality reductions because influenza deaths in trials are rare (14), and wide ranges were used to account for uncertainty. Oseltamivir is also less effective in the elderly (24). Immunity after prophylaxis among those without clinical infection was assumed to be 35%, as shown during an influenza study in which 38% of study participants on prophylaxis had serologic infection but no clinical infection (12). Oseltamivir's pharmacologic action is selective and is assumed to be inactive against noninfluenza illnesses.

Stockpile use depends on the probability of an influenza pandemic occurring. Antigenic shifts and reappearances of past variants were estimated to have pandemic potential every 8–10 years (31,32). Using oseltamivir's shelf-life of 4 years and patent expiration in 2016, the model assumed a conservative base value of 2.25 stockpile cycles before use (range 1–3.5 cycles) to account for significantly reduced costs after patent expiration. The model assumed that all unused stockpiles are lost.

Stockpiling is insurance in planning for pandemics with high case-fatality rates, in which more severe outcomes and higher risks demand higher premiums. Policymakers should consider lives saved even if economic costs outweigh incremental benefits. Prophylaxis of high-risk groups balances saving lives with economic benefits. Prophylaxis also reduces hospitalizations, which may otherwise overwhelm the healthcare system. Analysis of peak pandemic healthcare use is required to determine the effects of prophylaxis. Other options to reduce a pandemic's impact, including reducing influenza attack rates by quarantine or closing borders, should be considered as alternative strategies.

The current avian influenza (H5N1) outbreak in Asia, which has a high case-fatality rate, indicates the need for decisive action. Oseltamivir is effective against H5N1 and is used as treatment in Vietnam (36,37). Although resistance has been detected, resistant strains have poor infectivity (37). Prophylaxis with oseltamivir will reduce illness, deaths, and economic costs and may reduce spread. If avian influenza develops species crossover with case fatalities exceeding those of the 1918 Spanish influenza pandemic, then stockpiling for treatment and prophylaxis accrues substantial benefits.

The decision to stockpile requires predetermined objectives; noneconomic, moral, and ethical implications should be considered. Treatment-only maximizes economic benefits, while prophylaxis saves most lives. Policymakers have to act decisively, and determine the subpopulations to be given priority, to enable preparedness plans to succeed.

Antiviral stockpiles will be used on clinical influenza cases according to the pandemic distribution curve, assumed to be normally distributed (14). Baseline influenzalike illness rates are assumed to be constant.

The population proportion with clinical influenza left untreated because of treatment stockpile deficiencies is calculated as follows:

No. of doses required = (influenzalike illness per week × pandemic duration) + no. of clinical influenza cases

Shortfall of doses for treatment = no. of doses required – no. of doses available

The proportion untreated is the shortfall of treatment doses matched to the number of case-patients who require treatment, according to the pandemic distribution curve.

The cost of treatment was calculated as follows:

Total cost of treatment age_{risk group} = cost of treatment per course × stockpile percentage × population_{age, risk group}

The cost of prophylaxis for 1 stockpile cycle was calculated as follows:

Total cost of prophylaxis_{age, risk group} = cost of prophylaxis per week × no. weeks of prophylaxis × population_{age, risk group}

The medical cost of outpatient clinical influenza was calculated as follows:

Outpatient medical costs_{age, risk group} = population_{age, risk group} × attack rate × consultation and treatment cost

The cost of outpatient lost days was calculated by using work days lost for the adult population and unspecified days lost for the young and elderly populations, as follows:

Economic cost of outpatient lost days_{age, risk group} = population_{age, risk group} × attack rate × outpatient days lost × value of a day lost_{age, risk group}

The hospitalization cost for influenza-related complications was calculated by summing direct hospitalization cost with cost of additional days lost after hospitalization.

The direct hospitalization cost was calculated as follows:

Economic cost of hospitalization_{age, risk group} = population_{age, risk group} × attack rate × hospitalization rate _{age, risk group} × length of stay _{age, risk group} × (hospitalization cost + value of a day lost _{age, risk group})

The cost from additional days lost was calculated as follows:

Economic cost of additional days lost after hospitalization = population _{age, risk group} × attack rate × hospitalization rate_{age, risk group} × additional days lost_{age, risk group} × value of a day lost_{age, risk group}

The cost from influenza deaths is calculated as follows:

Economic cost from influenza deaths = population_{age, risk group} × attack rate × case-fatality rate_{age, risk group} × net present value of future earnings_{age, risk group}

For cost-benefit comparisons, the following equation is used:

Overall benefit = overall cost_{treatment only or prophylaxis} – overall cost_{no action}

For the cost-effectiveness comparisons, the following equation is used:

Cost per-life-saved compared to no action = (cost excluding cost per life_{treatment-only or prophylaxis} – cost excluding cost per life_{no action}) / (deaths_{no action} – deaths_{treatment-only or prophylaxis})

The individual costs that constitute the total costs are calculated for the strategies of no action, treatment-only, and prophylaxis as follows:

Overall cost_{no action, treatment-only, prophylaxis} = Σ (population_{age, risk group} × probability of outcome_{clinical influenza, hospitalization, death} × cost of outcome_{clinical influenza, hospitalization, death} × effectiveness_{treatment-only, prophylaxis}) + cost of strategy_{treatment-only, prophylaxis}