Pediatric vaccine procurement policy: The monopsonist's problem

Matthew J. Robbins, Sheldon H. Jacobson

Research output: Contribution to journalArticlepeer-review


Vaccination against infectious disease is an extremely important public health endeavor. Yet, in the past 40 years, the manufacture of pediatric vaccines has become less profitable due to rising costs and limited demand, inducing many pharmaceutical companies to leave the market. To ensure the safe, secure, and reliable provision of vaccines, the economic interests of the vaccine industry must be considered by public health policy makers. The monopsonistic market power of the federal government uniquely positions it to significantly influence the pediatric vaccine market by negotiating contractual agreements that increase the vaccine manufacturers' financial incentives to remain in the market. The Monopsonist Vaccine Formulary Pricing and Purchasing Problem (MVF3P) is introduced, which seeks pediatric vaccine prices and purchase quantities that ensure a birth cohort is fully immunized according to the recommended childhood immunization schedule at an overall minimum system cost while also ensuring that vaccine manufacturers each attain a reservation profit level. The practical value of MVF3P is demonstrated by analyzing and assessing pricing and purchasing policies that the Centers for Disease Control could adopt in attempting to actively manage the long-term provision of pediatric vaccines.

Original languageEnglish (US)
Pages (from-to)589-597
Number of pages9
Issue number6
StatePublished - Dec 2011


  • Cost models
  • Mathematical programming
  • Operational/OR
  • Policy analysis

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research
  • Information Systems and Management


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