The health scare of COVID-19 amidst pandemics and the immune-related pharmaceutical products spillovers in the USA

Abstract

In view of the sector-wide effect of the nCOVID-19 pandemic in the USA and the probable effect on certain over-the-counter (OTC) pharmaceutical products, the current study examined potential inflation in the pharmaceutical industry arising from the pandemic-related uncertainty. In this case, the USA’s producer price indexes vis-à-vis inflation of the immune-related pharmaceutical items: multivitamin, vitamins nutrients and hematinic (V-N-H), other vitamins (other-V), antidepressant, and antidiabetic were examined alongside the uncertainties arising from the world pandemic and economic policy. Thus, the (Diebold and Yilmaz in Int J Forecast 28(1): 57–66, 2012) result implied that the world pandemic uncertainty contributed a significantly huge shock to the examined pharmaceutical compounds, thus affirming the vulnerability of certain pharmaceuticals to pandemic-related uncertainty. The total spillover increased from 34.2% (with economic policy uncertainty) to 47.6% (when pandemic uncertainty is incorporated). In specific, there are negative net spillovers from the multivitamins, other vitamins, antidiabetic, and antidepressant especially due to high pandemic and economic policy uncertainties. However, the statistical evidence implied that higher uncertainty arising from the pandemic is responsible for the severity of shock received by the indicated pharmaceutical products as against economic policy uncertainty. Thus, a relevant policy inference is posited from the result of the study.