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The short answer, as discussed below, is probably not, but it’s a fast-moving narrative that warrants some level of concern (though not panic). Here’s what we know and don’t know at this point and my thoughts on some of the potential implications.
Omicron is a new variant of COVID-19 that was first identified in South Africa, where it’s now the dominant strain of the virus. As of this writing, it has already spread to a sizable number of other countries and regions across the globe. According to initial reports, most of the cases seen so far are concentrated among younger patients, who tend to be either unvaccinated or not fully vaccinated. (For context, South Africa’s vaccination rate is approximately 26%1.)
Our health care analysts tell me that the mRNA vaccine is best positioned to be modified to provide protection from new COVID variants. An Omicron-specific version of the mRNA vaccine could potentially be available in as little as six weeks, but clinical testing, mass production, and distribution of it would likely take up to six months (even for developed countries).
Three key questions around the Omicron variant center on: 1) its transmissibility; 2) its virulence; and 3) vaccine efficacy against it. While it’s too soon to have any definitive answers yet, early data suggest a potential base case of high transmissibility and largely unknown virulence (due to the relatively small number of cases right now), but at least some degree of vaccine efficacy. We should have more clarity on these and other characteristics of the variant in the coming weeks.
Another critical question: Could the Omicron variant usher in a third wave of the pandemic? Hard to say just yet, but it’s possible. Much will of course depend on the above answers. For example, if it turns out to be a less virulent strain, and if existing vaccines prove even somewhat effective against it, we’d already have a leg up on it (unlike in previous COVID episodes.)
Of all the wildcards at play here, of which there are many, I think vaccine efficacy against the Omicron variant is going to be the most important data point to keep an eye on going forward. Efficacy of more than 50% would, in my view, bode well for further progress on COVID vaccination rates and booster shots, as well as for the resumption of the economic recovery.
1 Source: Our World in Data, December 2021.
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Source: Wellington Management
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