The relationship between pediatric combination vaccines and market effects.

We explored market factors that affect pediatric combination vaccine uptake in the US public-sector pediatric vaccine market. We specifically examined how Pediarix and Pentacel earned a place in the 2009-2012 lowest overall cost formulary. Direct competition between Pediarix and Pentacel is driven by the indirect presence of the Merck Haemophilus influenzae type b vaccine and the Recommended Childhood Immunization Schedule requirement for a hepatitis B birth dose. The resulting analysis suggests that Pentacel would never have earned a place in the lowest overall cost formulary for 2009-2012 federal contract prices for any cost of an injection unless the Merck H influenzae type b advantage was ignored and the hepatitis B birth dose administration cost was recognized by health care providers in designing the lowest overall cost formularies.

Pricing strategies for combination pediatric vaccines based on the lowest overall cost formulary.

This paper analyzes pricing strategies for US pediatric combination vaccines by comparing the lowest overall cost formularies (i.e., formularies that have the lowest overall cost). Three pharmaceutical companies compete pairwise over the sale of monovalent and combination vaccines. Particular emphasis is placed on examining the price of Sanofi Pasteur's DTaP-IPV/HIb under different conditions. The main contribution of the paper is to provide the lowest overall cost formularies for different prices of DTaP-IPV/HIb and other Sanofi Pasteur vaccines. The resulting analysis shows that DTaP-IPV/HIb could have been more competitively priced compared with the combination vaccine DTaP-HepB-IPV, for federal contract prices in 2009, 2010 and 2011. This study also proposes the lowest overall cost formularies when shortages of monovalent vaccines occur.

Pricing strategies for combination pediatric vaccines and their impact on revenue: Pediarix or Pentacel?

This paper analyzes pricing strategies for pediatric combination vaccines and their impact on the United States pediatric vaccine market. Three pharmaceutical companies compete pairwise with each other over the sale of vaccines containing two or three antigens per injection. Specific emphasis is placed on examining the competition between two pentavalent vaccines: GlaxoSmithKline's Pediarix (DTaP-HepB-IPV) and Sanofi Pasteur's Pentacel (DTaP-IPV/Hib). The main contribution of the paper is to provide a methodology for analyzing pricing strategies of directly competing, partially overlapping, and mutually exclusive combination vaccines in the United States pediatric vaccine market, with the goal of maximizing each pharmaceutical company's expected revenue. The resulting analysis shows that Pentacel is not competitively priced when compared to Pediarix, its strongest competitor, for federal contract prices ending 31 March 2010. Accordingly, Sanofi Pasteur should expect to generate low revenue upon market entry, while Pediarix remains well priced, with GlaxoSmithKline able to generate a high level of revenue at the expense of Sanofi Pasteur. The proposed pricing approach suggests an appropriate price for Pentacel whereby a substantial increase in expected revenue can be realized.

Maximizing the effectiveness of a pediatric vaccine formulary while prohibiting extraimmunization.

The growing-complexity of the United States Recommended Childhood Immunization Schedule has resulted in as many as five required injections during a single well-baby office visit. To reduce this number, vaccine manufacturers have developed combination vaccines that immunize against several diseases in a single injection. At the same time, a growing number of parents are challenging the safety and effectiveness of vaccinating children. They are also particularly concerned about the use of combination vaccines, since they believe that injecting a child with multiple antigens simultaneously may overwhelm a child's immune system. Moreover, combination vaccines make it more likely that extraimmunization (i.e., administering more than the required amount of vaccine antigens) occurs, resulting in greater concerns by parents and vaccine wastage costs borne by an already strained healthcare system. This paper formulates an integer programming model that solves for the maximum number of vaccines that can be administered without any extraimmunization. An exact dynamic programming algorithm and a randomized heuristic for the integer programming model is formulated and the heuristic is shown to be a randomized xi-approximation algorithm. Computational results are reported on three sets of test problems, based on existing and future childhood immunization schedules, to demonstrate their computational effectiveness and limitations. Given that future childhood immunization schedules may need to be solved for each child, on a case-by-case basis, the results reported here may provide a practical and valuable tool for the public health community.

A web-based tool for designing vaccine formularies for childhood immunization in the United States.

This article describes the motivation, development, and implementation of a software tool, www.vaccineselection.com, introduced to assist health care professionals and public health administrators in managing pediatric vaccine purchase decisions and making economically sound formulary choices. The tool integrates general operations research methodologies with specific local practice choices to solve for the lowest overall cost set of vaccines required to immunize a child according to the Recommended Childhood Immunization Schedule. A description of the tool's capabilities is provided. RESULTS on the use of the software tool are reported and discussed.

Survey of vaccine distribution and delivery issues in the USA: from pediatrics to pandemics.

Vaccine distribution and delivery has become an issue of significant interest, given the threat of a pandemic influenza outbreak and the resulting need for coordinated efforts to distribute and deliver pandemic influenza vaccines into the hands of healthcare workers responsible for administering them. This review provides an overview of the issues that are most relevant to vaccine distribution and delivery, including routine pediatric immunization, combination vaccines, vaccine shortages and stockpiling, seasonal influenza vaccines and, of most current interest, a discussion on pandemic influenza outbreak issues and a list of future distribution and delivery challenges that may be faced during such an event.

An analysis of the pediatric vaccine supply shortage problem.

In 2002, several factors resulted in pediatric vaccine manufacturers not being able to produce a sufficient number of vaccines to vaccinate all the children in the United States according to the Recommended Childhood Immunization Schedule. The resulting vaccine supply shortage resulted in thousands of children not being fully immunized according to this schedule, and hence, created an unnecessary risk for epidemic outbreaks of several childhood diseases. The Centers for Disease Control and Prevention responded to this crisis by using pediatric vaccine stockpiles to mitigate the impact of future shortages. This paper presents a stochastic model that captures the vaccine supply during production interruptions. This model is used to assess the impact of pediatric vaccine stockpile levels on vaccination coverage rates, by considering the probability that all children can be immunized according to the Recommended Childhood Immunization Schedule over a given time period and the expected minimum vaccine supply. The model is also used to assess the proposed pediatric vaccine stockpile levels recommended by the United States Department of Health and Human Services. The results of this analysis suggest that the proposed vaccine stockpile levels are adequate to meet future vaccine production interruptions, provided that such production interruptions do not last more than six months (which is not surprising, given that is the time period for which they were designed). However, given that recent vaccine production interruptions have lasted (on average) for over one year, the proposed vaccine stockpile levels are insufficient to meet the nation's pediatric immunization needs during such time periods, which in turn could lead to localized and/or widespread disease outbreaks. Moreover, a moderate investment in higher vaccine stockpile levels would lead to a significantly reduced risk of such events.

Stockpile levels for pediatric vaccines: how much is enough?

In recent years, several factors have led to pediatric vaccine manufacturers experiencing vaccine production interruptions that resulted in vaccine supply shortages. One unfortunate consequence of such events is that not all children in the United States could be vaccinated on time, as set forth by the Recommended Childhood Immunization Schedule, and hence, created the potential for epidemic outbreaks of several childhood diseases. The Centers for Disease Control and Prevention (CDC) have responded to such events by releasing vaccine supplies from the national pediatric vaccine stockpiles, which were designed to mitigate the impact of vaccine production interruptions. This paper analyzes the CDC-proposed vaccine stockpile levels using a stochastic inventory model. The results from this analysis examine the adequacy of the proposed pediatric vaccine stockpile levels, as well as provide insights into what the appropriate pediatric vaccine stockpile levels should be to achieve prespecified vaccination coverage rates. Given that the average pediatric vaccine production interruption has lasted more than 1 year, the model is used to compute appropriate pediatric vaccine stockpile levels sufficient to absorb the effect of such vaccine production interruptions. The level of funding needed to create such pediatric vaccine stockpile levels is also reported.

Engineering the economic value of two pediatric combination vaccines.

Combination vaccines for pediatric immunization have become an effective means to reduce the number of separate injections required to immunize children according to the United States Recommended National Childhood Immunization Schedule. This paper reports the results of using operations research methodologies to analyze the price and value of two pentavalent combination vaccines for pediatric immunization: diphtheria-tetanus-acellular pertussis, hepatitis B, inactivated polio (DTPa-HBV-IPV) and diphtheria-tetanus-acellular pertussis, Haemophilus influenzae type B, inactivated polio (DTPa-HIB-IPV). These two combination vaccines are analyzed both individually and head-to-head, as a function of the cost of administering (or avoiding) an injection and the number of doses of the vaccine required to be in the lowest overall cost vaccine formulary. The main contribution of the paper is to provide a methodology for analyzing the impact of combination vaccines on pediatric vaccine formularies. This analysis shows that the DTPa-HBV-IPV vaccine may provide a good value at the current federally negotiated price of 32.75 dollars for a wide spectrum of health-care environments, though the actual number of injections that it reduces may be fewer than the optimistic numbers claimed by its manufacturer. The analysis also shows that if the DTPa-HIB-IPV vaccine is approved by the Food and Drug Administration (FDA), then under current market prices, it may need to be priced below the sum of its vaccine component prices to favorably compete with the DTPa-HBV-IPV vaccine.

Assessing the impact of wastage on pediatric vaccine immunization formulary costs using a vaccine selection algorithm.

Pediatric immunization is an important factor in providing protection against numerous common preventable diseases. The success of the pharmaceutical industry in developing new pediatric vaccines has resulted in a crowded recommended immunization schedule requiring several clinic visits over the first 12 years of life. Operations research models have been developed and used to make economically sound procurement choices from among a growing number of competing vaccine products. One factor that has not been incorporated into such models is the economic impact of wastage on such decisions. This paper reports results obtained from a vaccine selection algorithm that incorporates vaccine wastage data. The lowest overall cost formularies comparing no wastage costs with wastage costs are presented. A sensitivity analysis of the vaccine formulary with respect to the wastage rates associated with each available vaccine is provided. The maximum permissible wastage rate for each vaccine is determined for which the vaccine earns a place in the lowest overall cost formulary. This research provides health maintenance organizations and healthcare providers information that can be used to gain a better understanding of wastage and its impact on pediatric formulary costs.

Designing pediatric vaccine formularies and pricing pediatric combination vaccines using operations research models and algorithms.

The National Immunization Program, housed within the Centers for Disease Control and Prevention in the USA, has identified several challenges that must be faced in childhood immunization programs to deliver and procure vaccines that immunize children from the plethora of childhood diseases. The biomedical issues cited include how drug manufacturers can combine and formulate vaccines, how such vaccines are scheduled and administered and how economically sound vaccine procurement can be achieved. This review discusses how operations research models can be used to address the economics of pediatric vaccine formulary design and pricing, as well as how such models can be used to address a new set of pediatric formulary problems that will surface with the introduction of pediatric combination vaccines into the US pediatric immunization market.

Analyzing the economic value of the hepatitis B--Haemophilus influenzae type B combination vaccine by reverse engineering a formulary selection algorithm.

Combination vaccines for pediatric immunization provide a means to reduce the number of separate injections required to immunize children. This paper reports the results of reverse engineering a vaccine selection algorithm to evaluate the economic value of a hepatitis B-Haemophilus influenzae type B combination vaccine that is currently under federal contract in the United States. This analysis captures the tradeoff between the cost assigned to administering an injection and the price of the vaccine that earns it a place in the lowest overall cost formulary. Given the current United States federally negotiated price for this combination vaccine (as of 9 August 2002), it provides a good economic value for those health-care providers or payers who value the cost associated with administering an injection to be at least US$ 4.02 or 5.01. These two values are a function of the number of doses of the combination vaccine required to be in the lowest overall cost formulary and whether the perinatal hepatitis B dose is administered. Moreover, as the cost of an injection increases, the combination vaccine provides a better value than monovalent vaccines.

Using Monte Carlo simulation to determine combination vaccine price distributions for childhood diseases.

The Recommended Childhood Immunization Schedule provides guidelines that allow pediatricians to administer childhood vaccines in an efficient and effective manner. Research by vaccine manufacturers has resulted in the development of new vaccines that protect against a growing number of diseases. This has created a dilemma for how to insert such new vaccines into an already crowded immunization schedule, and prompted vaccine manufacturers to develop vaccine products that combine several individual vaccines into a single injection. Such combination vaccines permit new vaccines to be inserted into the immunization schedule without requiring children to be exposed to an unacceptable number of injections during a single clinic visit. Given this advantage, combination vaccines merit an economic premium. The purpose of this paper is to describe how Monte Carlo simulation can be used to assess and quantify this premium by studying four combination vaccines that may become available for distribution within the United States. Each combination vaccine is added to twelve licensed vaccine products for six childhood diseases (diphtheria, tetanus, pertussis, haemophilus influenzae type B, hepatitis B, and polio). Monte Carlo simulation with an integer programming model is used to determine the (maximal) inclusion price distribution of four combination vaccines, by randomizing the cost of an injection. The results of this study suggest that combination vaccines warrant price premiums based on the cost assigned to administering an injection, and that further developments and innovations in this area by vaccine manufacturers may provide significant economic and societal benefits.