Analytics for vaccine economics and pricing: insights and observations

Pediatric immunization programs in the USA are a successful and cost-effective public health endeavor, profoundly reducing mortalities caused by infectious diseases. Two important issues relate to the success of the immunization programs, the selection of cost-effective vaccines and the appropriate pricing of vaccines. The recommended childhood immunization schedule, published annually by the CDC, continues to expand with respect to the number of injections required and the number of vaccines available for selection. The advent of new vaccines to meet the growing requirements of the schedule results: in a large, combinatorial number of possible vaccine formularies. The expansion of the schedule and the increase in the number of available vaccines constitutes a challenge for state health departments, large city immunization programs, private practices and other vaccine purchasers, as a cost-effective vaccine formulary must be selected from an increasingly large set of possible vaccine combinations to satisfy the schedule. The pediatric vaccine industry consists of a relatively small number of pharmaceutical firms engaged in the research, development, manufacture and distribution of pediatric vaccines. The number of vaccine manufacturers has dramatically decreased in the past few decades for a myriad of reasons, most notably due to low profitability. The contraction of the industry negatively impacts the reliable provision of pediatric vaccines. The determination of appropriate vaccine prices is an important issue and influences a vaccine manufacturer's decision to remain in the market. Operations research is a discipline that applies advanced analytical methods to improve decision making; analytics is the application of operations research to a particular problem using pertinent data to provide a practical result. Analytics provides a mechanism to resolve the challenges facing stakeholders in the vaccine development and delivery system, in particular, the selection of cost-effective vaccines and the appropriate pricing of vaccines. A review of applicable analytics papers is provided.