TY - JOUR
T1 - Pricing strategies for combination pediatric vaccines and their impact on revenue
T2 - Pediarix® or Pentacel®?
AU - Robbins, Matthew J.
AU - Jacobson, Sheldon H.
AU - Sewell, Edward C.
PY - 2010/2
Y1 - 2010/2
N2 - 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.
AB - 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.
KW - Combination vaccines
KW - Economics
KW - Immunization
KW - Operations research
KW - Pediatric vaccine formularies
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UR - http://www.scopus.com/inward/citedby.url?scp=77349123269&partnerID=8YFLogxK
U2 - 10.1007/s10729-009-9109-8
DO - 10.1007/s10729-009-9109-8
M3 - Article
C2 - 20402282
AN - SCOPUS:77349123269
SN - 1386-9620
VL - 13
SP - 54
EP - 64
JO - Health Care Management Science
JF - Health Care Management Science
IS - 1
ER -