THE BLOG
03/18/2010 05:12 am ET Updated May 25, 2011

Don't Underestimate the Impact of H1N1

For the American economy, this holiday season meant two things: shopping and travel. The financial ramifications of shopping are clear enough: companies hoped consumers would spend a lot; consumers hoped to get good deals and to spend within their budgets. Holiday travel would seem to follow the same dynamics. Except during these final days of the holiday season and as we begin the New Year, air travel has added a few more concerns into the business equation: exceedingly heightened security, inconvenience and health risks.

The health concern is of particular importance because of H1N1, previously known as the "swine flu." Holiday and vacation travel already occurs during the flu season, but what makes H1N1 especially worrisome is that as a new virus, most people have little or no immunity to it. This may explain why the disease has spread rapidly even among young people (ages 10 to 45).

The Center for Disease Control estimates that between April and mid-October, between 14 million and 43 million people had the H1N1 flu. Even with the announcements of declining cases and pandemic fears waning, H1N1 is the type of virus that shouldn't be considered yesterday's concern.

It's not just the spread of the virus that's attracted attention, but it's that the impact on those infected with the virus has been severe. The Center for Disease Control estimates that the H1N1 virus has been responsible for the death of 10,000 Americans, with an additional 200,000 Americans being hospitalized since the CDC starting tracking the disease in March.

Dr. Anthony Fiore, medical epidemiologist for the Influenza Division of the CDC, adds, "It's clear that the 2009 H1N1 influenza pandemic has already had a major impact on health in the United States."

But what impact will H1N1 have on the nation's economy? Overall, probably not that much. However, individual industries and companies will certainly be affected by it. Airlines and hotels already took their hit from H1N1 when it initially spread (though that impact was easily buried in the larger hit taken by those industries because of the financial crisis). And what will happen when the next form of influenza virus surfaces and begins to infect our communities? How quickly can we react, test and treat those affected?

The H1N1 virus has even had an impact on the sports and entertainment industry. The National Football League team, St. Louis Rams, recently had to cancel practice because team officials were concerned that several players might have been infected with the H1N1 flu.

There are some industries, though, that have benefited and will continue to benefit from H1N1. Pharmaceutical companies, for example, will experience some positive impact, as they develop and produce vaccinations that people seek to prevent catching the virus.

The large drug manufacturers seem poised to be the main beneficiaries. The U.S. awarded Swiss pharmaceutical company Novartis nearly $500 million in contracts to build an H1N1 vaccine production facility in North Carolina. French drug manufacturer Sanofi-Aventis received an initial order of $190 million from the U.S. Department of Health and Human Services to produce the vaccine (though the company suffered an embarrassing recall of 800,000 doses of their vaccine in mid-December).

Medical device companies might benefit as well. Today, patients are treated on the assumption of pandemic infection, only receiving an official diagnosis after days of waiting for laboratory results. Such an approach is neither cost nor time effective.

PositiveID Corporation (NASDAQ: PSID) is a company developing a solution. The company's point-of-care virus detection system for the H1N1 virus could allow caregivers to administer more efficient treatment based on an instant diagnosis. PositiveID's system will not only target H1N1 but will be able to be adapted to specifically identify and diagnose new strains of flu and other pandemic viruses, which may enable the health care community to more effectively manage future outbreaks.

The St. Louis Rams could certainly have benefited from such a device. Right now, there are only two types of tests available for H1N1: a polymerase chain reaction (PCR) test or a culture approach, neither of which is quick or inexpensive. The quick tests that are currently available are ones that only tell you whether or not you have the regular flu.

So without really knowing if the several players with flu-like symptoms were actually infected with the H1N1 flu, team officials (wisely) just had to assume the worst and cancel practice. They couldn't risk the possibility that the players were indeed infected with the H1N1 flu and might spread it to the rest of the team. With a device like the one PositiveID is developing, they wouldn't have had to guess.

That's the beauty of the American economy. It turns problems into new solutions. Crises are transformed into opportunities. And the companies in the economy that are best poised to capitalize are the innovators, the ones able to respond the most efficiently, with the best research and development, and with the highest quality products. All with the objective of giving the American consumer the ability to live, work and play with the level of convenience, health and safety that we've grown accustomed to.

So, in the early days of this New Year, shop on, America. And travel safe. Just make sure you've gotten your flu vaccinations beforehand.