Analysis of the United States pediatric immunization market: A game theoretic approach

Immunization against infectious diseases is the single factor that has had the most considerable impact on world health. In the United States, the Centers for Disease Control and Prevention (CDC) is the primary public health organization responsible for research, analysis, and fulfillment of immunization programs. A small number of vaccine manufacturers produce all the pediatric vaccines required to fully immunize a child against infectious diseases. To ensure adequate societal immunization coverage levels, the CDC negotiates the prices of the vaccines sold in the public sector with vaccine manufacturers. The economic competition between vaccine manufacturers and the impact of the negotiations between the CDC and the vaccine manufacturers are of particular interest. This dissertation applies game theory and operations research techniques to analyze the pricing strategies in the United States Pediatric vaccine market. The market is studied from four different aspects. First, integer programming is applied to analyze pricing strategies for pediatric combination vaccines by comparing the lowest overall cost formularies for a fixed cost of an injection. Specific emphasis is placed on examining the price of combination vaccine PentacelRTM under different conditions. Second, the market factors that impact the uptake of pediatric combination vaccines in the United States public sector pediatric vaccine market are analyzed. Particularly, the direct competition between PediarixRTM and PentacelRTM is studied considering the indirect presence of several market factors. Next, Bertrand-Edgeworth-Chamberlin price game is used to examine the prices of the monovalent vaccines in the United States pediatric vaccine market. The proposed game captures oligopolistic interactions between symmetric, capacity-constrained manufacturers (i.e., manufacturers with equal and limited production capacity) in a differentiated, single- product market with linear demand. Vaccines are differentiated based upon the number of reported adverse medical events for that vaccine. Using the proposed game theoretic model, equilibrium prices are computed for competing monovalent vaccines. Finally, The Bertrand-Edgeworth-Chamberlin price game is employed to analyze the competition between asymmetric capacity-constrained manufacturers (i.e., manufacturers with unequal and limited production capacities) producing differentiated products in a market with linear demand. The competing vaccines are differentiated based upon the number of reported adverse medical events, the number of different antigens, and special advantages of those vaccines. Using the proposed game theoretic model, equilibrium prices are computed for competing monovalent and combination vaccines. The results presented in this dissertation should appeal to the pediatric healthcare community, including federal government officials (who negotiate the vaccine prices with vaccine manufacturers) and vaccine manufacturers (who seek effective pricing strategies).