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

Matthew J. Robbins, Sheldon H. Jacobson, Edward C. Sewell

Research output: Contribution to journalArticlepeer-review

Abstract

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.

Original languageEnglish (US)
Pages (from-to)54-64
Number of pages11
JournalHealth Care Management Science
Volume13
Issue number1
DOIs
StatePublished - Feb 1 2010

Keywords

  • Combination vaccines
  • Economics
  • Immunization
  • Operations research
  • Pediatric vaccine formularies

ASJC Scopus subject areas

  • Medicine (miscellaneous)
  • Health Professions(all)

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