A decision support system for localized planning of reclaimed water around wastewater treatment plants

Exploding population, industrialization, and an increase in water pollution has led to acute shrinkage in freshwater availability. Numerous countries have started exploring municipal wastewater as a new potential source of water to bring a paradigm shift from linearity to obtaining circularity in human water cycle management. This study aims to develop a decision support system for integrated water and wastewater management (DSS_IWWM), targeted towards reuse-focused selection of appropriate wastewater treatment technology, and localized planning around STPs in terms of reclaimed water demand identification, estimation, allocation, and sustainable pricing. The developed DSS_IWWM comprises of a repository of fourteen reuse purposes, reuse quality criteria, and 25 wastewater treatment technologies (WWTTs) in 360 combinations. It is sensitive to local resource scenarios and applies a socioeconomic and technology-focused methodology for addressing the interests of the community and investing agencies and viably. To validate the application of the DSS_IWWM, it is first tested with data from three cities in the state of Uttar Pradesh (India)-Lucknow, Prayagraj, and Agra-and then extended to nine more Indian cities with varying influent quality characteristics, resource inputs, existing STP technologies, and same target quality and decision criteria prioritization, to present a comparison of appropriate WWTTs and associated average prices obtained in different scenarios. It is concluded that influent quality, existing technology, and target quality criteria play significant role in selection of appropriate WWTTs. The traditional technologies such as UASB and ASP are required to be augmented and supplemented with high-performing WWTTs, such as BIOFOR-F with (C + F + RSF) and SBT + WP to obtain desired effluent quality. High-performing advanced oxidation process (AOP)-based systems such as A2O, SBR, and BIOFOR-F require WWTTs with relatively lower average costs (such as SBT and OP). The developed DSS_IWWM may prove to be very useful and beneficial for policymakers, government officials, engineers, and scientific community as it will facilitate rational decision-making for efficient investment planning in reuse focused wastewater treatment towards achieving circular economy in sustainable water resource management.

Dynamic optimization of battery recycling e-platforms under non-equalizing supply and demand: Recycling price and service commissions

With the rapid advancement of electric vehicles (EVs), the burgeoning increase in used power batteries necessitates the development of efficient battery recycling e-platforms. A key challenge in this field is the mismatch between supply and demand. In response, a dynamic optimization model is proposed to capture the non-equalizing supply-demand relationship and its linkage over continuous periods to enable dynamic simulations and predictions of transaction volume changes. Meanwhile, pricing and commission-setting strategies are optimized based on the objectives of maximizing social welfare and platform revenue. The result shows that due to the lower recycling volumes that result, increasing the recycling price usually increases platform revenues, exacerbates environmental costs, and leads to lower social welfare. Moreover, platform revenues are more sensitive to commission rates than social welfare, which is more vulnerable to recycling prices. Furthermore, prioritizing social welfare leads to a higher recycling volume compared to prioritizing revenue, but it also creates an imbalance between supply and demand, destabilizing the recycling market. With the dynamic pricing and commission strategies, this study enriches the literature in the third-party recycling mode for power batteries, offering a novel perspective that is more aligned with real-world operational conditions. Our findings help platforms clarify the impact of pricing and commission decisions on platform revenue and social welfare and thereby provide support for their decision optimization.

Public Science, Private Profit, and Lessons for the Future

This commentary highlights the scientific history of the NIH-Moderna COVID-19 vaccine and corroborates Sarpatwari's theme of private capture of value created by the public. The commentary also identifies missteps by the Trump and Biden Administrations and offers policy recommendations: better contracts with and incentives for pharmaceutical manufacturers and a not-for-profit "public option" for pharmaceutical development.

Is the price right? Paying for value today to get more value tomorrow

BACKGROUND

Contemporary debates about drug pricing feature several widely held misconceptions, including the relationship between incentives and innovation, the proportion of total healthcare spending on pharmaceuticals, and whether the economic evaluation of a medicine can be influenced by things other than clinical efficacy.

MAIN BODY

All citizens should have access to timely, equitable, and cost-effective care covered by public funds, private insurance, or a combination of both. Better managing the collective burden of diseases borne by today's and future generations depends in part on developing better technologies, including better medicines. As in any innovative industry, the expectation of adequate financial returns incentivizes innovators and their investors to develop new medicines. Estimating expected returns requires that they forecast revenues, based on the future price trajectory and volume of use over time. How market participants decide what price to set or accept can be complicated, and some observers and stakeholders want to confirm whether the net prices society pays for novel medicines, whether as a reward for past innovation or an incentive for future innovation, are commensurate with those medicines' incremental value. But we must also ask "value to whom?"; medicines not only bring immediate clinical benefits to patients treated today, but also can provide a broad spectrum of short- and long-term benefits to patients, their families, and society. Spending across all facets of healthcare has grown over the last 25 years, but both inpatient and outpatient spending has outpaced drug spending growth even as our drug armamentarium is constantly improving with safer and more effective medicines. In large part, this is because, unlike hospitals, drugs typically go generic, thus making room in our budgets for new and better ones, even as they often keep patients out of hospitals, driving further savings.

CONCLUSION

A thorough evaluation of drug spending and value can help to promote a better allocation of healthcare resources for both the healthy and the sick, both of whom must pay for healthcare. Taking a holistic approach to assessing drug value makes it clear that a branded drug's value to a patient is often only a small fraction of the drug's total value to society. Societal value merits consideration when determining whether and how to make a medicine affordable and accessible to patients: a drug that is worth its price to society should not be rendered inaccessible to ill patients by imposing high out-of-pocket costs or restricting coverage based on narrow health technology assessments (HTAs). Furthermore, recognizing the total societal cost of un- or undertreated conditions is crucial to gaining a thorough understanding of what guides the biomedical innovation ecosystem to create value for society. It would be unwise to discourage the development of new solutions without first appreciating the cost of leaving the problems unsolved.

The impact of an 'evergreening' strategy nearing patent expiration on the uptake of biosimilars and public healthcare costs: a case study on the introduction of a second administration form of trastuzumab in The Netherlands

In this paper, we explore dynamic market share and public healthcare costs of trastuzumab's evergreening (subcutaneous) variant during introduction of trastuzumab's competitive biosimilar variants in the Netherlands. We used a time series design to assess dynamic market share of trastuzumab's evergreening variant after introducing trastuzumab's biosimilar variants, focusing on the number of treatments and patients. The public healthcare costs of this evergreening strategy were estimated using administrative claims data. Our results show that the original trastuzumab was completely replaced by the subcutaneous and biosimilar variants. The uptake of the subcutaneous form peaked at 50% market share but after the introduction of biosimilars progressively reduced to a market share of 20%, resulting in a more competitive market structure. The public healthcare costs for trastuzumab significantly decreased after the introduction of the biosimilars. After the introduction of the biosimilars, a substantial price drop is visible, with the subcutaneous version, still under patent, also falling sharply in price but less strongly than the iv/biosimilar version. As the costs are publicly funded, we recommend a more explicit societal debate to consider if the potential benefits of subcutaneous Herceptin® (and other similar medicines) are worth the additional costs, and at which price it should be reimbursed as the part of the benefit package.

Lessons Learned from Europe

This paper reviews the main pricing policies in Latin American countries, discussing their shortcomings. It also gives an overview of the most common pricing and reimbursement policies in Europe and describes in detail three well-established approaches - international price referencing, value-based pricing, including setting up of health technology assessment, and generic and biosimilar policies - building on country examples.

Pricing and cost-saving potential for deep-learning computer-aided lung nodule detection software in CT lung cancer screening

OBJECTIVE

An increasing number of commercial deep learning computer-aided detection (DL-CAD) systems are available but their cost-saving potential is largely unknown. This study aimed to gain insight into appropriate pricing for DL-CAD in different reading modes to be cost-saving and to determine the potentially most cost-effective reading mode for lung cancer screening.

METHODS

In three representative settings, DL-CAD was evaluated as a concurrent, pre-screening, and second reader. Scoping review was performed to estimate radiologist reading time with and without DL-CAD. Hourly cost of radiologist time was collected for the USA (€196), UK (€127), and Poland (€45), and monetary equivalence of saved time was calculated. The minimum number of screening CTs to reach break-even was calculated for one-time investment of €51,616 for DL-CAD.

RESULTS

Mean reading time was 162 (95% CI: 111-212) seconds per case without DL-CAD, which decreased by 77 (95% CI: 47-107) and 104 (95% CI: 71-136) seconds for DL-CAD as concurrent and pre-screening reader, respectively, and increased by 33-41 s for DL-CAD as second reader. This translates into €1.0-4.3 per-case cost for concurrent reading and €0.8-5.7 for pre-screening reading in the USA, UK, and Poland. To achieve break-even with a one-time investment, the minimum number of CT scans was 12,300-53,600 for concurrent reader, and 9400-65,000 for pre-screening reader in the three countries.

CONCLUSIONS

Given current pricing, DL-CAD must be priced substantially below €6 in a pay-per-case setting or used in a high-workload environment to reach break-even in lung cancer screening. DL-CAD as pre-screening reader shows the largest potential to be cost-saving.

CRITICAL RELEVANCE STATEMENT

Deep-learning computer-aided lung nodule detection (DL-CAD) software must be priced substantially below 6 euro in a pay-per-case setting or must be used in high-workload environments with one-time investment in order to achieve break-even. DL-CAD as a pre-screening reader has the greatest cost savings potential.

KEY POINTS

• DL-CAD must be substantially below €6 in a pay-per-case setting to reach break-even. • DL-CAD must be used in a high-workload screening environment to achieve break-even. • DL-CAD as a pre-screening reader shows the largest potential to be cost-saving.

How healthy and affordable are foods and beverages sold in school canteens? A cross-sectional study comparing menus from Victorian primary schools

OBJECTIVE

Government policy guidance in Victoria, Australia, encourages schools to provide affordable, healthy foods in canteens. This study analysed the healthiness and price of items available in canteens in Victorian primary schools and associations with school characteristics.

DESIGN

Dietitians classified menu items (main, snack and beverage) using the red, amber and green traffic light system defined in the Victorian government's School Canteens and Other School Food Services Policy. This system also included a black category for confectionary and high sugar content soft drinks which should not be supplied. Descriptive statistics and regressions were used to analyse differences in the healthiness and price of main meals, snacks and beverages offered, according to school remoteness, sector (government and Catholic/independent) size, and socio-economic position.

SETTING

State of Victoria, Australia.

PARTICIPANTS

A convenience sample of canteen menus drawn from three previous obesity prevention studies in forty-eight primary schools between 2016 and 2019.

RESULTS

On average, school canteen menus were 21 % 'green' (most healthy - everyday), 53 % 'amber' (select carefully), 25 % 'red' (occasional) and 2 % 'black' (banned) items, demonstrating low adherence with government guidelines. 'Black' items were more common in schools in regional population centres. 'Red' main meal items were cheaper than 'green'% (mean difference -$0·48 (95 % CI -0·85, -0·10)) and 'amber' -$0·91 (-1·27, -0·57)) main meal items. In about 50 % of schools, the mean price of 'red' main meal, beverages and snack items were cheaper than 'green' items, or no 'green' alternative items were offered.

CONCLUSION

In this sample of Victorian canteen menus, there was no evidence of associations of healthiness and pricing by school characteristics except for regional centres having the highest proportion of 'black' (banned) items compared with all other remoteness categories examined. There was low adherence with state canteen menu guidelines. Many schools offered a high proportion of 'red' food options and 'black' (banned) options, particularly in regional centres. Unhealthier options were cheaper than healthy options. More needs to be done to bring Victorian primary school canteen menus in line with guidelines.

Pharmaceutical pricing and reimbursement policies in Algeria, Morocco, and Tunisia: comparative analysis

Objectives

In this paper, we outline and compare pharmaceutical pricing and reimbursement policies for in-patent prescription medicines in three Maghreb countries, Algeria, Morocco, and Tunisia, and explore possible improvements in their pricing and reimbursement systems.

Methods

The evidence informing this study comes from both an extensive literature review and a primary data collection from experts in the three studied countries.

Key findings

Twenty-six local experts where interviewed Intervieweesincluded ministry officials, representatives of national regulatory authorities, health insurance organizations, pharmaceutical procurement departments and agencies, academics, private pharmaceutical-sector actors, and associations. Results show that External Reference Pricing (ERP) is the dominant pricing method for in-patent medicines in the studied countries. Value-based pricing through Health Technology Assessment (HTA) is a new concept, recently used in Tunisia to help the reimbursement decision of some in-patent medicines but not yet used in the pricing of innovative medicines in the studied countries. Reimbursement decision is mainly based on negotiations set on Internal Reference Pricing (IRP).

Conclusion

Whereas each country has its specific regulations, there are many similarities in the pricing and reimbursement policies of in-patent medicines in Algeria, Morocco, and Tunisia. The ERP was found to be the dominant method to inform pricing and reimbursement decisions of in-patent medicines. Countries in the region can focus on the development of explicit value assessment systems and minimize their dependence on ERP over the longer-term. In this context, HTA will rely on local assessment of the evidence.

The pricing of European airbnb listings during the pandemic: A difference-in-differences approach employing COVID-19 response strategies as a continuous treatment

The COVID-19 pandemic has been a major shock to the global tourism industry. Given its peculiarity, this paper analyzes one of the most intriguing questions in the Airbnb literature - the pricing of Airbnb listings - by taking advantage of a difference-in-differences methodology that largely draws on variations in country-level policy responses to the pandemic. Relying on a dataset containing weekly information from 130,999 continuously active listings across 27 European countries from 2019 to 2020, this study first investigates the exogenous impact of response policies (proxied by the COVID-19 Stringency Index) on demand. Secondly, accounting for the endogeneity of both demand and prices, this research analyzes pricing responses to demand variations. Results show that: i) increases in the COVID-19 Stringency Index cause significant declines in Airbnb demand; ii) increases in demand cause, on average, increases in Airbnb prices; and iii) pricing strategies between commercial and private hosts differ substantially.

The association between drug pricing and drug shortage in Saudi Arabia: a retrospective database analysis

BACKGROUND

Previous studies have suggested that drug pricing could contribute to drug shortages; however, there is limited quantitative assessment of this potential causal association. This retrospective database analysis aimed to investigate the association between drug prices and drug shortage incidents in Saudi Arabia.

METHODS

This was a retrospective database analysis study. Drugs with shortage notifications sent to the Saudi Food and Drug Authority (SFDA) between January 2017 and December 2020 were included. Each drug's foreign-to-Saudi price ratio (FTSPR) was calculated by dividing the mean international price by the Saudi price. Drugs were categorized into three groups based on their FTSPR: Group 1 (FTSPR > 1), Group 2 (FTSPR = 1), and Group 3 (FTSPR < 1). The primary outcome was the ratio of mean counts (mCR) between the three groups, with Group 3 serving as the control group. The analysis was adjusted for the measured confounders using a negative binomial regression model.

RESULTS

A total of 900 drugs were included in the study, with 348 in Group 1, 345 in Group 2, and 209 in Group 3. The mean count in Group 1 was higher compared to Group 3 (mCR: 1.88; 95% confidence interval [CI] 1.24 to 2.83), while the mean counts between Group 2 and Group 3 were comparable (mCR: 1.39; 95% CI 0.92 to 2.09).

CONCLUSIONS

Our findings indicate an association between drug shortage incidents and higher prices of drugs outside Saudi Arabia. Further studies are needed to explore this causal relationship in different contexts.

The affordability of lecanemab, an amyloid-targeting therapy for Alzheimer's disease: an EADC-EC viewpoint

Lecanemab, an anti-amyloid antibody with effects on biomarker and clinical endpoints in early Alzheimer's Disease (AD), was granted accelerated approval by the FDA in 2023 and regulatory review in Europe is ongoing. We estimate the population potentially eligible for treatment with lecanemab in the 27 EU countries to 5.4 million individuals. Treatment costs would exceed 133 billion EUR per year if the drug is priced similarly as in the United States, amounting to over half of the total pharmaceutical expenditures in the EU. This pricing would be unsustainable; the ability to pay for high-priced therapies varies substantially across countries. Pricing similarly to what has been announced for the United States may place the drug out of reach for patients in some European countries. Disparities in access to novel amyloid-targeting agents may further deepen the inequalities across Europe in health outcomes. As representatives of the European Alzheimer's Disease Consortium Executive Committee, we call for pricing policies that allow eligible patients across Europe to access important innovations, but also continued investments in research and development. Infrastructure to follow up the usage of new therapies in routine care and new payment models may be needed to address affordability and inequalities in patient access.

Oral emergency contraception practices of community pharmacies: a mystery caller study in the capital of Germany, Berlin

BACKGROUND

In Germany, oral emergency contraception (EC) with the active ingredients levonorgestrel (LNG) and ulipristal acetate (UPA) is available as over-the-counter (OTC) medicine only from community pharmacies (CPs). Because of the window of effect, which is limited to only a few days, CPs have a great responsibility to provide rapid and unimpeded access, while also ensuring "adequate" counseling. The aim was-for the first time in Europe and thus also in Germany for the methodology used in this study-to investigate immediate availability, pricing, and aspects of counseling.

METHODS

Covert mystery calls were conducted in a random sample of CPs stratified by districts in the German capital Berlin. Each of the 263 CPs included was called once at random by one of two trained female student mystery callers. They simulated a product-based scenario for the UPA original ellaOne^®, citing a contraceptive failure one day ago as the reason.

RESULTS

Of 257 successfully called CPs, UPA preparations were immediately available in 98.4% (253/257) and LNG preparations in 86.8% (184/212) of CPs. Prices for UPA preparations varied from €15.95 to €42.95 (∆ 169%; median €35.00 [interquartile range (IQR) €5.91]) and for LNG preparations from €10.60 to €32.49 (Δ 207%; median €22.00 [IQR €5.76]). Information about the correct different window of effect of UPA and LNG preparations was provided in 69.8% (127/182) of CPs. UPA preparations were recommended in 63.1% (111/176) and LNG preparations in 17.2% (30/174) of CPs. Information was provided on how to take them as soon as possible in 30.8% (44/143) of CPs and on how to use them after vomiting in 46.0% (64/139).

CONCLUSIONS

Berlin CPs support access through high immediate availability, especially to UPA preparations. However, access is hampered by high absolute price ranges of both UPA and LNG preparations, which could ideally be minimized by a comparison app. It is positive that CPs promote the benefits of UPA preparations by recommending them noticeably more often than LNG preparations. However, there are deficiencies in giving advice, so there is a need to raise awareness among pharmacy staff to ensure "adequate" counseling in advance over the phone.

A reverse mechanism of advance selling driven by information asymmetry and competition

Enlightened by popular online business practices emerging in recent years, we aim to investigate a problem involving a flipped procedure in contrast with traditional advance selling, which is referred to as "reverse advance selling" (RAS) in this paper. We consider competition and information asymmetry in the market and discuss how they affect the decisions in reverse advance selling. We propose two models to evaluate the benefits of RAS and to characterize the conditions that optimize the pricing and ordering policies for retailers under competition. Furthermore, we examine the impact of factors such as market share, online review, and waiting time and provide insights for retailers to make decisions. The results demonstrate the advantage of adopting RAS when retailers or customers face uncertainty and it is beneficial to update review information. This paper also finds that market share positively affects the profit as well as the ordering quantities of the retailer, while online reviews have opposite impacts on its discount and ordering decisions. The results can guide retailers to make flexible ordering plans that better cater to market demand.

Analysis on trade-in strategy of manufacturers competing with informal recycling enterprises

Considering the competition of informal recycling enterprises in the waste and old product recycling market, this paper analyzes the trade-in strategy of manufacturers and discusses the effect of implementing trade-in on the competition in the recycling market by comparing changes in recycling market shares, recycling prices, and profits before and after the implementation of a trade-in program. Without a trade-in program, manufacturers are always in an inferior position in the competition with informal recycling enterprises in the recycling market. With the implementation of a trade-in program, the recycling prices provided by manufacturers and shares of recycling market of manufacturers not only increase with the earnings of processing a unit old product, but also increase with the total profit margin of sales of new products and recycling of old products. The implementation of a trade-in program can enhance the competitiveness of manufacturers in their competition with informal recycling enterprises, causing manufacturers to obtain more shares and profits in the recycling market, and promoting the healthy and sustainable development of manufacturers in the sale of new products and the recycling of old products.

To increase or to decrease the price? Managing public transport queues during COVID-19 in the presence of strategic commuters

The impact of COVID-19 on urban travel behavior has been unprecedented. It has significantly influenced the travel mode choices of different urban commuters in various countries across the globe. Given that the public transport providers need to tradeoff between minimizing the spread of COVID-19 and providing an affordable travel choice in this environment, we develop a strategic queueing model to analyze the effect of different pricing strategies on the commuter behavior. In particular, we consider a Markovian queue in front of a public transport ticket counter wherein strategic commuters arrive at the service facility and make joining or balking decisions based on their derived utilities. In contrast to conventional wisdom, we suggest that the public transport provider needs to decrease the price to filter out the wealthy commuters who possess feasible alternative travel options from using public transport and promote the commuters with no alternatives in using public transport.

Combination of pricing and inventory policies for deteriorating products with sustainability considerations

Economic, environmental, and social criteria are all being taken into consideration simultaneously when determining pricing policies or inventory levels in sustainable production management. The combination of pricing and inventory policies is an important source of leverage for the efficient management of perishable products. This paper, among the first studies, proposes the problem of devising optimal pricing and inventory management decisions simultaneously where the environmental and social criteria are contributed for perishable complementary products replenished and sold by the same company. This study considers two interrelated price-sensitive linear demand functions to consider the possibility of shortage with both budget and warehouse capacity constraints. Another contribution of the proposed model is to consider an upper bound for environmental pollution and a lower bound for job opportunities as the constraints to the model. As a complex optimization model, the challenge of complexity is addressed by a heuristic algorithm for finding an optimal solution. After an extensive analysis using numerical examples, some managerial insights are concluded from the results. One finding from these analyses confirms that the total capacity of the warehouse, the total available budget, carbon emissions, and variable job opportunities have a high impact on the optimal solution to find a balance between sustainability criteria for making pricing and inventory policies.

ODs with a positive TPR conclusion, not subject to a conditional approval, and approved without requering a pass would be more likely to be reimbursed in Spain

BACKGROUND

The present study aims to assess clinical and regulatory variables that would influence pricing and reimbursement (P&R) decisions for Orphan Drugs (ODs) in Spain. ODs approved by the European Commission (EC) between 2006 and 2021 were classified according to their P&R status in Spain: approved, undergoing decision and rejected. A statistical analysis was carried out to assess the potential association between clinical and regulatory variables and P&R decision of ODs in Spain: therapeutic area, rarity of disease, existence of alternative therapies, availability of survival-related outcomes, safety profile, type of population, conditional approval status granted by the European Medicines Agency (EMA) and a positive Therapeutic Positioning Report (TPR) opinion.

RESULTS

111 ODs have been approved by the EC and have obtained marketing authorisation in Spain between 2006 and 2021. Out of the 111 ODs, 57 (51.4%) were reimbursed, 24 (21.6%) were undergoing decision and 30 (27%) were rejected. According to the statistical analysis, ODs with a positive TPR conclusion (p-value < 0.01), not subject to a conditional approval by the EMA (p-value < 0.05) and approved without the obligation to conduct a post-authorisation safety study (PASS) (p-value < 0.05), were statistically significant, and therefore, would be more likely to obtain P&R approval in Spain.

CONCLUSIONS

This study shows that the TPR plays a key role in the P&R process in Spain and highlights that traditional evaluation tools, such us safety and efficacy, were the main drivers of P&R decisions for ODs. A positive conclusion of the TPR, non-conditional approval by the EMA and no obligation for a PASS seems to favourably affect P&R decisions in Spain.

Pricing extreme mortality risk in the wake of the COVID-19 pandemic

In pricing extreme mortality risk, it is commonly assumed that interest rate and mortality rate are independent. However, the COVID-19 pandemic calls this assumption into question. In this paper, we employ a bivariate affine jump-diffusion model to describe the joint dynamics of interest rate and excess mortality, allowing for both correlated diffusions and joint jumps. Utilizing the latest U.S. mortality and interest rate data, we find a significant negative correlation between interest rate and excess mortality, and a much higher jump intensity when the pandemic experience is considered. Moreover, we construct a risk-neutral pricing measure that accounts for both diffusion and jump risk premia, and we solve for the market prices of risk based on mortality bond prices. Our results show that the pandemic experience can drastically change investors' perception of the mortality risk market in the post-pandemic era.

A game-theoretic approach for pricing in a closed-loop supply chain considering product exchange program and a full-refund return policy: a case study of Iran

The increasing rate of manufacturers and consequently the production of the products gave rise to an increase in used products. The growth in old goods, as well as their negative environmental and social consequences, prompted supply chain operators to focus more on reverse logistics for collecting and reusing these items. However, there are a few key issues that should be handled in this manner, covering how to implement an effective collecting plan. What categories of used items should be collected? And how should they be handled for the aim of reusing them? To address these questions, the pricing issues are investigated in a CLSC with a manufacturer and two retailers. As an effective collection strategy, the first retailer, along with selling new products, benefits from the product exchange program (PEP). In this program, the retailer, by offering two types of discounts on a new product's price, is able to collect two types of products, including those without and with useful lifetime left as the first- and second-category products, respectively. In terms of used products management, the first-category products are sent to the manufacturer for recycling, and the second-category ones are sold as second-hand products by the first retailer. Besides, the first retailer exercises a full refund return policy, where the returned defective products, after being remanufactured by the manufacturer, are sold to customers by the second retailer in the secondary market. With respect to buy back price of first-category products from the first retailer, two scenarios are considered: 1) the manufacturer pays as much as the difference between the original retail price and discounted retail price in order to encourage the retailer to offer exercise the PEP for returned used items, or 2) by considering the discount on wholesale price, the manufacturer pays as much as the difference between the original wholesale price and discounted wholesale price. In this study, a real-world case study is considered based on an Iranian automotive industry to understand the issue better and obtain practical results. The findings show that the second scenario is more profitable due to lower selling prices and greater demand rates. It is proved that the PEP along with providing environmental benefits can improve supply chain financial profit even for the first or the second-category products.

The actual status of drug prices and adjustment factors for drug price calculation: an analysis of ultra-orphan drug development in Japan

BACKGROUND

Extremely high prices facilitate drug development for ultra-rare diseases (ultra-orphan drugs). However, various problems arise in terms of healthcare financing and fairness, and the status of ultra-orphan drug pricing remains ambiguous. In this study, we investigated ultra-orphan drug prices in Japan relative to that of other drugs. We examined the relationship between annual expected drug prices and expected sales, and the expected number of patients, for 393 drugs containing new active ingredients for therapeutic use that were listed on the National Health Insurance drug price list in Japan between April 16, 2010 and August 26, 2020. In addition, we compared prices, the drug price calculation method, and price calculation adjustment factors for ultra-orphan and other drugs.

RESULTS

Drug prices tended to increase as the expected number of patients to whom the drug was administered decreased; however, this trend diminished when the expected number of patients was less than 1000. On the other hand, the expected sales tended to decrease as the number of expected patients decreased, and this tendency was reinforced when the expected number of patients was less than 1000. The cost accounting method tended to be used for the price calculation of ultra-orphan drugs, but there were no price differences based on the drug price calculation method. Regarding the price calculation adjustment factors, the premium for usefulness tended to be higher for ultra-orphan drugs. The premium for marketability was higher for non-orphan drugs but did not differ from that for orphan drugs, except for ultra-orphan drugs.

CONCLUSIONS

The status of drug prices and expected sales differed beyond a threshold of 1000 expected patients, indicating that recovering the development cost for ultra-orphan drugs is difficult. In addition, the higher premium for usefulness for ultra-orphan drugs reflects the largely unmet need of the associated diseases. Scarcity among orphan drugs is not considered for marketability, highlighting the need for a new framework to promote the development of ultra-orphan drugs.

Benefit from a high store visiting cost in an omnichannel with BOPS

Omnichannel sales surge in the coronavirus pandemic. This paper establishes an analytical model to study when a firm can benefit from implementing the omnichannel strategy of buy-online and pick-up in-store (BOPS), where the market characteristics are captured by the two-dimensional heterogeneity of product valuation and online waiting cost. The increase in the store visiting cost will reduce BOPS consumers' willingness to pay, but it will also strengthen the encroachment of BOPS on traditional dual-channel. The results show that the firm can benefit from the BOPS strategy when the store visiting cost is relatively high. This well explains the rapid development of the omnichannel with BOPS because of a high store visiting cost during COVID-19. Furthermore, sharply contrasting to the traditional dual-channel sales in which a higher store visiting cost always hurts the firm, the profit under BOPS can be nonmonotonic in the store visiting cost and the firm can benefit from a higher store visiting cost. Specifically, the combination of cross-selling effect, BOPS encroachment effect and BOPS expansion reduction effect associated with the store visiting cost can result in a U-shaped or inverse U-shaped BOPS profit. In addition, introducing BOPS motivates the firm to either increase or decrease the optimal price, conditional on the store visiting cost. For consumers, online and offline consumers can also indirectly benefit from the BOPS strategy, though they may not enjoy the BOPS service.

Utilizing additive manufacturing and mass customization under capacity constraints

Additive manufacturing (AM), originally used for prototyping, is increasingly adopted for custom final part production across different industries. However, printing speed and production volume are two barriers for the adoption of AM for product customization at large scale. Nevertheless, manufacturers could aim to combine the benefits of AM for product customization with traditional mass customization (MC) technologies over the product life cycle (PLC). This approach is showcased in our paper as a manufacturing opportunity and is addressed via a non convex-concave optimization model that considers a monopolist manufacturer producing horizontally differentiated products at scale. To satisfy individual customer preferences under capacity considerations, the firm jointly decides on the inventory, production quantity, product variety, optimal technology-switching times (between AM and MC) and pricing strategy. Our approach can be implemented by decision-makers to leverage customer-centricity and benefit from this novel hybrid manufacturing practice. By deriving a closed-form solution for the production quantity based on an adaptive inventory policy, the resulting optimization problem is solved using the Sample Average Approximation framework grounded by analytical results. Our results demonstrate that the new usage of AM with MC can benefit a manufacturer for customer-centric driven strategies. Significant profit improvements can be achieved with an AM-MC-AM technology-switching scenario under certain capacity conditions and with an increasing-decreasing pricing strategy. Our results also indicate that the benefits of pricing flexibility are highest when capacity is unlimited or when the firm does not hold inventory. Under capacity constraints, a simple decreasing pricing policy combined with inventory performs very well.

A David and Goliath set-up: a qualitative study of the challenges of ensuring the introduction of cost-effective new cancer medicines in Finland

Background

To combat the global challenge of cancer, priority has been placed on the research and development of new cancer medicines (NCMs). NCMs are often approved for marketing in accelerated processes. Despite significant advances in treating cancer, the overall added value and high prices of NCMs has been questioned. While market authorisations for NCMs are granted at the EU level, the assessment of added value, price negotiations and purchase or reimbursement decisions are made by member states. This article explores the practices in Finland for assessing and deciding on purchasing or reimbursing NCMs.

Methods

Semi-structured interviews were conducted with 26 civil servants, hospital employees, scientists, and representatives of cancer NGOs and of the pharmaceutical industry in 2019 and 2020. The transcribed interviews were coded inductively using Atlas.ti software and analysed thematically under 3 major themes and 11 sub-themes.

Results

The clinical value of NCMs is considered to be high, especially regarding NCMs for certain types of cancer. Proper patient selection is important but difficult and not all NCMs can be considered as adding value. The prices are considered to often be very high, leading to concerns about the sustainability and equity of health systems. Equity concerns among cancer patients are raised concerning differences in the availability of NCMs between hospital districts and cost differences for patients between those receiving outpatient and inpatient treatment. The systems and processes in Finland for deciding on the introduction of NCMs are fragmentary, involving separate approaches for outpatient care and hospital medicines by under-resourced evaluation bodies. The scientific evidence available is often limited for evidence-based decisions on introduction. Individual hospital districts sometimes introduce NCMs without assessment by national bodies. This can hamper the proper assessment of some NCMs before their uptake and lead to unequal access to NCMs by hospitals. There is an increasing lack of transparency about pricing, due to the rapid increase of market entry agreements. Lack of transparency on information on prices poses a challenge for authorities responsible for equitable access to cost-effective care within the available resources.

Conclusions

Robust reform of the national introductory systems is needed. Internationally, efforts are needed to increase price transparency, to revise incentives within the system of market approval and to accumulate and assess evidence of comparable value and cost-effectiveness after the market approval of NCMs.

Supplementary Information

The online version contains supplementary material available at 10.1186/s40545-022-00449-5.

Indication-wide drug pricing: Insights from the pharma market

Background

Pharmaceutical spending has been increasing rapidly for years and is higher than ever before. To control the rising costs, countries are implementing regulatory frameworks such as (internal) reference pricing, price cuts or generics substitution. Internal reference pricing establishes a reference price within a country which serves as the maximum level of reimbursement for a group of pharmaceuticals. Price setting in the German market is especially relevant for many European countries, which use Germany as a reference country for their own price setting.

Methods

We evaluate pharmaceutical price dynamics for not reference priced pharmaceuticals (NRPs) as well as for reference priced pharmaceuticals (RPs) in Germany—referring to the internal reference price system. 64,862 medication packs have been extracted from the German pharmaceutical pricing register Lauer-Taxe. For each pack, we extracted detailed data on the company, manufacturer rebates, pharmacy retail prices, reference prices, co-payments, import quotas, and discount agreements. We then investigated price setting and dynamics of NRPs vs. RPs for all 14 indication areas by ATC code level 1.

Results

The average manufacturer price per pack was 604.84€ for NRPs and 112.11€ for RPs. Similar differences were found for the wholesale price and the pharmacy retail price. The reference price was—as expected—0.00€ for NRPs, and 154.40€ for RPs. NRP packs were imported in 42.38%, while RP packs were imported only in 24.62%. Highest average pharmacy retail prices could be found in the therapeutic areas ‘antineoplastic and immunomodulating agents’ (1711.47€), ‘systemic hormonal preparations’ (1331.95€), and ‘blood and blood forming organs’ (1260.58€). We detected high fluctuations in pharmacy retail prices per indication, as well as for reference prices per indication. The indications with the highest number of reference price regulated medical packs are ‘cardiovascular system’, ‘musculo-skeletal system’, and ‘nervous system’. Highest co-payments were found in the indications ‘antineoplastic and immunomodulating agents’, ‘blood and blood forming organs’, and ‘antiinfectives for systemic use’.

Conclusion

Price setting and price dynamics vary substantially between NRP and RP medication packs. Further, we saw major differences across all indication areas as well as when comparing medication packs launched by top 20 pharma companies vs. the rest.

Supplementary Information

The online version contains supplementary material available at 10.1186/s40545-022-00451-x.

Dynamic analysis of a dual-channel closed-loop supply chain with fairness concerns under carbon tax regulation

In this work, we study a dual-channel closed-loop supply chain (CLSC) where the manufacturer sells the new products via one fair caring retailer in the traditional channel and distributes the remanufactured products through her own direct channel in the presence of the carbon tax regulation. After solving the single-period Stackelberg game model by backward induction and analyzing the impacts of key parameters on the optimal pricing strategies and the performance of channel members, a multi-period dynamic Stackelberg game model with heterogeneous players is further established. The local stability of the Nash equilibrium point and complexity properties of the model are investigated by numerical simulation. The results reveal that (1) the retailer's fairness concern degree is negatively related to the optimal wholesale price as well as positively related to the optimal retail price of the new product. A high level of consumer discount perception for the remanufactured product is conducive to the manufacturer obtaining more profits while it is detrimental to the retailer. (2) The excessive value of the price adjustment speed, carbon tax rate or retailer's fairness concern degree has a strong destabilization effect on the system's stability. (3) The manufacturer suffers profit loss while the retailer's utility levels are elevated when the system falls into periodic cycles and chaotic motions. (4) The delay feedback control method can eliminate the chaos effectively in the dual-channel CLSC system.

Designing an optimization model for green closed-loop supply chain network of heavy tire by considering economic pricing under uncertainty

The conditions of global competition and environmental sensitivities have made organizations and factories to collect returned products, in such a way that these organizations have tried to rehabilitate, recycle, or destroy these products in order to protect the environment. This paper propose a mathematical model for the green closed-loop supply chain network of heavy tire by considering the economic pricing of its products under conditions of uncertainty, which economically determines the price and leads to more profitability. In addition, the relevant model is a two-objective fuzzy model, the first objective of which is to minimize costs and maximize profits, and the second objective is to minimize environmental issues. The proposed model can also determine the optimal location of each center based on potential locations, the optimal amount of production, distribution, collection, recycling, as well as the reproduction of products. The ε-constraint method is used to solve the model with two objective functions; this method ensures strong Pareto optimal answers and prevents weak Pareto answers. Independent two-sample t-test is used to verify the results of certain and uncertain models in the studied model. In order to evaluate the effectiveness and profitability of the proposed method, a case study in the field of heavy tires is finally used, through which very useful results are obtained.

Enhancing access to innovative cancer drugs: Cross-sector consensus on a way forward to benefit patients

New discoveries and technologies are driving major advances in our understanding of cancer and underpinning a new era of precision medicine and immunotherapy. However, advances in treatment have been uneven: whereas survival rates for some common cancers are improving rapidly, for others there has been much less progress. In addition, healthcare systems are finding it difficult to provide access to expensive new treatments. There is an urgent need for imaginative policy solutions to incentivise the creation of novel therapies that address the full range of cancer-causing mechanisms. We have worked with organisations across the medical research community to develop consensus statements on how to enhance access to innovative cancer drugs. Here, we present our reflections on these statements.

Value-based pricing for advanced therapy medicinal products: emerging affordability solutions

The emergence of advanced therapy medicinal products (ATMPs), a disruptive class of health technologies, is generating important challenges in terms of value assessment and their high prices introduce critical access and affordability concerns. The aim of this article is to analyze the challenges of traditional value assessment and price and reimbursement methods in the evaluation of ATMPs and to characterize the current and prospective financing solutions that may ensure patient access and affordability for these health technologies. Standard Health Technology Assessment (HTA) is not designed for ATMPs, and may delay access to these health technologies, thus a broader concept of value is required. As a consequence, value-based pricing methodologies have been gaining terrain to cope with the specific challenges of ATMPs. The pricing and reimbursement framework should ensure the balance between encouragements to innovation and maximization of value for money for payers, through the attribution of a fair price to new health technologies. Early scientific advice by regulatory and HTA bodies to developers is key, as it will contribute to diminish the perspective gap between developers, regulators and payers. The high efficacy/high price dynamic of many advanced therapies will demand novel financing models, both in the EU and US. Managed entry agreements (MEA), with financing being conditional to the submission of additional evidence, associated with methods of leased payments, may offer effective strategies to address the uncertainties caused by the evidence gap associated with ATMPs, ensuring affordable and sustained access.

Virtual currencies: different schemes and research opportunities

The digitization of money has led to the emergence of numerous virtual currencies. Despite their great financial relevance, virtual currencies have not received much attention in marketing research. We classify virtual currencies into three different schemes and highlight potential factors that influence consumer behavior related to these new payment methods. This article provides marketing researchers with a research framework as well as specific research questions to initiate discussions and future research on this novel topic.

Online revenue maximization for server pricing

Efficient and truthful mechanisms to price resources on servers/machines have been the subject of much work in recent years due to the importance of the cloud market. This paper considers revenue maximization in the online stochastic setting with non-preemptive jobs and a unit capacity server. One agent/job arrives at every time step, with parameters drawn from the underlying distribution. We design a posted-price mechanism which can be efficiently computed and is revenue-optimal in expectation and in retrospect, up to additive error. The prices are posted prior to learning the agent's type, and the computed pricing scheme is deterministic, depending only on the length of the allotted time interval and on the earliest time the server is available. We also prove that the proposed pricing strategy is robust to imprecise knowledge of the job distribution and that a distribution learned from polynomially many samples is sufficient to obtain a near-optimal truthful pricing strategy.

Social distancing in public transport: mobilising new technologies for demand management under the Covid-19 crisis

Dense urban areas are especially hardly hit by the Covid-19 crisis due to the limited availability of public transport, one of the most efficient means of mass mobility. In light of the Covid-19 pandemic, public transport operators are experiencing steep declines in demand and fare revenues due to the perceived risk of infection within vehicles and other facilities. The purpose of this paper is to explore the possibilities of implementing social distancing in public transport in line with epidemiological advice. Social distancing requires effective demand management to keep vehicle occupancy rates under a predefined threshold, both spatially and temporally. We review the literature of five demand management methods enabled by new information and ticketing technologies: (i) inflow control with queueing, (ii) time and space dependent pricing, (iii) capacity reservation with advance booking, (iv) slot auctioning, and (v) tradeable travel permit schemes. Thus the paper collects the relevant literature into a single point of reference, and provides interpretation from the viewpoint of practical applicability during and after the pandemic.

Social distancing in public transport: mobilising new technologies for demand management under the Covid-19 crisis

Dense urban areas are especially hardly hit by the Covid-19 crisis due to the limited availability of public transport, one of the most efficient means of mass mobility. In light of the Covid-19 pandemic, public transport operators are experiencing steep declines in demand and fare revenues due to the perceived risk of infection within vehicles and other facilities. The purpose of this paper is to explore the possibilities of implementing social distancing in public transport in line with epidemiological advice. Social distancing requires effective demand management to keep vehicle occupancy rates under a predefined threshold, both spatially and temporally. We review the literature of five demand management methods enabled by new information and ticketing technologies: (i) inflow control with queueing, (ii) time and space dependent pricing, (iii) capacity reservation with advance booking, (iv) slot auctioning, and (v) tradeable travel permit schemes. Thus the paper collects the relevant literature into a single point of reference, and provides interpretation from the viewpoint of practical applicability during and after the pandemic.

Comparing Costs and Outcomes of Treatments for Irritable Bowel Syndrome With Diarrhea: Cost-Benefit Analysis

BACKGROUND

Irritable bowel syndrome (IBS) is one of the most expensive gastroenterological conditions and is an ideal target for developing a value-based care model. We assessed the comparative cost-benefit of treatments for IBS with diarrhea (IBS-D), the most common IBS subtype from insurer and patient perspectives.

METHODS

We constructed a decision analytic model assessing trade-offs among guideline-recommended and recently FDA-approved drugs, supplements, low FODMAP diet, cognitive behavioral therapy (CBT). Outcomes and costs were derived from systematic reviews of clinical trials and national databases. Health-gains were represented using quality-adjusted life years (QALY).

RESULTS

From an insurer perspective, on-label prescription drugs (rifaximin, eluxadoline, alosetron) were significantly more expensive than off-label treatments, low FODMAP, or CBT. Insurer treatment preferences were driven by average wholesale prescription drug prices and were not affected by health gains in sensitivity analysis within standard willingness-to-pay ranges up to $150,000/QALY-gained. From a patient perspective, prescription drug therapies and neuromodulators appeared preferable due to a reduction in lost wages due to IBS with effective therapy, and also considering out-of-pocket costs of low FODMAP food and out-of-pocket costs to attend CBT appointments. Comparative health outcomes exerted influence on treatment preferences from a patient perspective in cost-benefit analysis depending on a patients' willingness-to-pay threshold for additional health-gains, but health outcomes were less important than out-of-pocket costs at lower willingness-to-pay thresholds.

CONCLUSIONS

Costs are critical determinants of IBS treatment value to patients and insurers, but different costs drive patient and insurer treatment preferences. Divergent cost drivers appear to explain misalignment between patient and insurer IBS treatment preferences in practice.

Advantages of 3PLs as healthcare supply chain orchestrators

Given the expansion of the COVID-19 cases and the average infection rate globally, constructing a robust healthcare supply chain system for the crisis is highly crucial. The third-party logistics providers (3PLs), who can match the market demand with reliable manufacturers worldwide, have emerged as orchestrators. In addition to the basic transportation and storage services, some 3PLs can also provide procurement assistance to relatively small retailers. To illustrate the value of the above-mentioned business model, we build a game-theoretic model to capture participants' optimal strategy in a healthcare supply chain consisting of a manufacturer, a 3PL provider, and a retailer. We also investigate the conditions where the performance in this business model outperforms the traditional model. It is concluded that the 3PL's positive effect appears when the decentralized supply chain is characterized by high logistics outsourcing costs and high-level price sensitivity. We further design an incentive mechanism that can coordinate the supply chain. Finally, a series of numerical experiments are carried out to demonstrate the effectiveness of our model.

Variables affecting pricing of orphan drugs: the Italian case

Background and aim

Evidence on determinants of prices for orphan medicines is scarce and not available for Italy. The aim of this paper is to provide an evidence on variables affecting the annual treatment cost of orphan drugs in Italy, testing the hypothesis of a negative correlation with the dimension of the target population and a positive correlation with the added therapeutic value of the drug and the quality of the evidence of pivotal studies.

Methods

Drugs with a European orphan designation reimbursed in Italy in the last 6 years (2014–2019) were considered. Univariate, cluster analysis and multiple regression models were used to investigate the correlation between the annual treatment cost and, as explanatory variables, the dimension of the target population, the existence of Randomized Clinical Trials as a proxy of the quality of the pivotal studies, the added therapeutic value.

Results

In the univariate analysis prevalence and added therapeutic value, as expected, have a negative and positive correlation with cost respectively. The correlation with RCT is not significant. In the multivariate model, coefficients for prevalence and added value are confirmed but for the latter are not significant anymore. We also found, through an interaction analysis, that the existence of an RCT has a positive impact on annual treatment cost when the target population is very small.

Conclusions

Our results suggest that value arguments and sustainability (dimension of the target population and its impact on budget impact) issues are considered for orphan drugs pricing: the role played by sustainability is systematically supported by our results. A more transparent and reproducible price negotiation process for orphan drugs is needed in Italy. This paper has contributed to highlight the implicit drivers of this process.

Assessing the prices and affordability of oncology medicines for three common cancers within the private sector of South Africa

BACKGROUND

Prices of cancer medicines are a major contributor to the cost of treatment for cancer patients and the comparison of these cost needs to be assessed.

OBJECTIVES

To assess the prices of cancer medicines for the three most common cancers ((breast, prostate and colorectal) in the private healthcare sector of South Africa.

METHODS

The methodology was adapted from the World Health Organization (WHO)/ Health Action International (HAI) methodology for measuring medicine prices. The Single Exit Price (SEP) variations between product types of the same medicine between the highest- and lowest-priced product and between Originator Brand (OB) and its Lowest Priced Generic (LPG) of the same medicine brand was compared, as of March 2020. The affordability of those medicines for cancer usage based on treatment affordability in relation to the daily wage of the unskilled Lowest-Paid Government Worker (LPGW) was also determined. Also, a comparison of the proportion of the population below the poverty line (PL) before (I_pre) and after (I_post) procurement of the cancer medicines was determined.

RESULTS

SEP Price differences ranged from 25.46 to 97.33% between highest- and lowest-priced products and a price variation of 72.09% more for the OB than the LPG medicine, except for one LPG that was more expensive than the OB. Affordability calculations showed that All OB treatments for all three cancers (breast, prostate and colorectal), except for paclitaxel 300 mg (0.2 days wage) and Fluorouracil (Fluroblastin) 500 mg (0.3 days wage) costs respectively were more than 1 day's wage, with patients diagnosed with colorectal cancer needing 32.5 days wages in order to afford a standard course of treatment for a month.

CONCLUSION

There was a considerable variation in the price of different brands of cancer medicines available in the South African private sector.

Competitive pricing of substitute products under supply disruption

There has been an increased interest in optimizing pricing and sourcing decisions under supplier competition with supply disruptions. In this paper, we conduct an analytical game-theoretical study to examine the effects of supply capacity disruption timing on pricing decisions for substitute products in a two-supplier one-retailer supply chain setting. We investigate whether the timing of a disruption may significantly impact the optimal pricing strategy of the retailer. We derive the optimal pricing strategy and ordering levels with both disruption timing and product substitution. By exploring both the Nash and Stackelberg games, we find that the order quantity with the disrupted supplier depends on price leadership and it tends to increase when the non-disrupted supplier is the leader. Moreover, the equilibrium market retail prices are higher under higher levels of disruption for the Nash game, compared to the Stackelberg game. We also uncover that the non-disrupted supplier can always charge the highest wholesale price if a disruption occurs before orders are received. This highlights the critical role of order timing. The insights can help operations managers to proper design risk mitigation ordering strategies and re-design the supply contracts in the presence of product substitution under supply disruptions.

Implications of marijuana purchase task based demand functions for optimal legal pricing of cannabis

BACKGROUND

Legalization of recreational cannabis use in Canada has prompted a wide array of new policy decisions to be made at all levels of government. Policies had to be designed and implemented to cover everything from the structure of production, distribution, and retail markets to zoning requirements governing the location of storefronts. Policies concerning price have proven particularly challenging due to a lack of observation data on price sensitivity of cannabis demand and the degree to which users are willing to substitute legal cannabis for illicit cannabis and other drugs.

METHOD

The most rigorous estimates of demand elasticity to date are derived from a sample of 289 cannabis users in Ontario who completed a hypothetical marijuana purchase task (Amlung & MacKillop, 2019). We calculate the optimal price of legal cannabis given a fixed illicit price based on this demand system for a range of parameters around the point estimates provided.

RESULTS

Our results clearly show a dichotomy between minimizing social harms and maximizing government revenue from legal cannabis net of production costs and social harm. In all cases the social harm minimizing legal price was below the illicit price while the net-revenue-maximizing price was above the illicit price.

CONCLUSIONS

The existence of the illicit market must be considered when designing legal cannabis pricing policies as it limits the effectiveness of price increases in controlling demand. Legal cannabis prices in Canada have so far been more consistent with revenue maximization than with minimizing social harms.

Assessing the pricing and benefits of oncology products: an update

Introduction: Oncology expenditure is outperforming all other health care sectors. In particular, the cost of oncology pharmaceuticals is soaring as it is fueled both by incremental costs and the introduction rate of new products. Due to the particularities of cancer as a disease, a significant multilayer of pressure is exerted toward the reimbursement of new treatments. Nevertheless, if the expenditure increase is left unattended, it may hamper the viability of any health care system worldwide.Areas covered: A literature review of the expenditure on oncology pharmaceuticals and the exploration of the root causes for the increase in expenditure was performed.Expert commentary: The surging oncology expenditure demonstrates a multi-layer causality that encompasses prices, the uncertainty of clinical trials, the specificities of cancer as a disease, and the artificial monopoly of oncology modalities. Moreover, laxity in the regulatory approval of new products was noted. In addition, the study design should be adequately justified. Finally, new reimbursement schemes, that explicitly reward and promote clinically meaningful and measurable outcomes, are also imperative.

Cooperation and decision making in a two-sided market motivated by the externality of a third-party social media platform

In recent years, with the rapid development of Internet technology, the integration of platform economy and e-commerce has become a popular business model. Two-sided platforms have a specific impact on sales, customer experience and transaction efficiency of both sides. In the current severe situation caused by the coronavirus pandemic, both the traditional unilateral market platform and the emerging two-sided market platform are in urgent need of a change in operation mode to reduce the marketing cost. Inspired by the cooperation between Meituan, a two-sided platform, and WeChat, a social media platform, this paper investigates the two-sided platform's scalable decisions on when to cooperate and how to optimize the pricing and investment decisions. We analyze how the two-sided platform makes decisions by considering the changes of network externalities from the cooperation with the social network platform. Compared with the scenario of non-cooperation, we derive the conditions under which platform cooperation can increase demands and increase platforms' profits, and analyze how cooperation affects the optimal pricing strategies. We find that the cooperation leads to a larger demand and a higher total profit, but might lead to higher registration prices for the platform users. Furthermore, we adopt the Nash bargaining framework and introduce platform bargaining power parameters to obtain the optimal cooperation and sharing strategy. Finally, we show how to adjust the investment strategy of the two-sided platform under platform cooperation.

Sales and pricing decisions for HIV self-test kits among local drug shops in Tanzania: a prospective cohort study

Background

Public health initiatives must look for ways to cost-effectively scale critical interventions to achieve high coverage. Private sector distribution channels, can potentially distribute preventive healthcare products to hard-to-reach populations, decongest public healthcare systems, and increase the sustainability of programs by getting customers to share costs. However, little is known about how sellers set prices for new products. By introducing a new product, HIV self-test kits, to local drug shops, we observed whether shops experimented with pricing, charged different buyers different prices, and whether prices converged within the local market over our study period.

Methods

From August to December 2019, we provided free HIV self-test kits, a new product, to 26 drug shops in Shinyanga, Tanzania to sell to the local community. We measured sales volume, price, customer age and sex using shop records. Using a multiple linear regression model, we conducted F-tests to determine whether shop, age, sex, and time (week) respectively were associated with price. We measured willingness-to-pay to restock test kits at the end of the study.

Results

514 test kits were sold over 18 weeks; 69% of buyers were male, 40% were aged 25–34 and 32% aged 35–44. Purchase prices ranged from 1000 to 6000 Tsh (median 3000 Tsh; ~$1.30 USD). Within shops, prices were 11.3% higher for 25–34 and 12.7% higher for 45+ year olds relative to 15–19-year olds (p = 0.029) and 13.5% lower for men (p = 0.023) on average. Although prices varied between shops, prices varied little within shops over time, and did not converge over the study period or cluster geospatially. Mean maximum willingness-to-pay to restock was 2000 Tsh per kit.

Conclusions

Shopkeepers charged buyers different prices depending on buyers’ age and sex. There was limited variation in prices within shops over time and low demand among shopkeepers to restock at the end of the study. Given the subsidized global wholesale price ($2 USD or ~ 4600 Tsh), further demand creation and/or cost-reduction is required before HIV self-test kits can become commercially viable in drug shops in this setting. Careful consideration is needed to align the motivations of retailers with public health priorities while meeting their private for-profit needs.

Supplementary Information

The online version contains supplementary material available at 10.1186/s12913-021-06432-1.

Challenges in valuing and paying for combination regimens in oncology: reporting the perspectives of a multi-stakeholder, international workshop

BACKGROUND

It is increasingly common for two or more treatments for cancer to be combined as a single regimen. Determining value and appropriate payment for such regimens can be challenging. This study discusses these challenges, and possible solutions.

METHODS

Stakeholders from around the world attended a 2-day workshop, supported by a background paper. This study captures key outcomes from the discussion, but is not a consensus statement.

RESULTS

Workshop attendees agreed that combining on-patent treatments can result in affordability and value for money challenges that delay or deny patient access to clinically effective treatments in many health systems. Options for addressing these challenges include: (i) Increasing the value of combination therapies through improved clinical development; (ii) Willingness to pay more for combinations than for single drugs offering similar benefit, or; (iii) Aligning the cost of constituent therapies with their value within a regimen. Workshop attendees felt that (i) and (iii) merited further discussion, whereas (ii) was unlikely to be justifiable. Views differed on the feasibility of (i). Key to (iii) would be systems allowing different prices to apply to different uses of a drug.

CONCLUSIONS

Common ground was identified on immediate actions to improve access to combination regimens. These include an exploration of the legal challenges associated with price negotiations, and ensuring that pricing systems can support implementation of negotiated prices for specific uses. Improvements to clinical development and trial design should be pursued in the medium and longer term.

Social distancing in public transport: mobilising new technologies for demand management under the Covid-19 crisis

Dense urban areas are especially hardly hit by the Covid-19 crisis due to the limited availability of public transport, one of the most efficient means of mass mobility. In light of the Covid-19 pandemic, public transport operators are experiencing steep declines in demand and fare revenues due to the perceived risk of infection within vehicles and other facilities. The purpose of this paper is to explore the possibilities of implementing social distancing in public transport in line with epidemiological advice. Social distancing requires effective demand management to keep vehicle occupancy rates under a predefined threshold, both spatially and temporally. We review the literature of five demand management methods enabled by new information and ticketing technologies: (i) inflow control with queueing, (ii) time and space dependent pricing, (iii) capacity reservation with advance booking, (iv) slot auctioning, and (v) tradeable travel permit schemes. Thus the paper collects the relevant literature into a single point of reference, and provides interpretation from the viewpoint of practical applicability during and after the pandemic.

A game-theoretic approach for decision analysis in end-of-life vehicle reverse supply chain regarding government subsidy

The presence of end-of-life vehicles (ELV) in the cities creates irreparable damage in environmental and economic terms. Thus, governments have been searching for ways to collect ELVs. An effective way to address ELVs is subsidies' policy. In this study, a supply chain including an ELV take-back center, an inspection center, and a repair center are considered. The decision variables are the purchase price of the ELVs, the sale price of the repaired vehicle, and the level of vehicle repair. In this supply chain, the government pays a subsidy to take-back centers that deliver their used vehicles. A Stackelberg game structure is considered with the government as the leader, the inspection center as the primary follower, and the collection and repair centers as the second followers. Using the game theory approach, the effects of government subsidies on equilibrium values of the decision-making variables of the centers in the ELV supply chain have been investigated in three scenarios. The scenarios comprise profit sharing, revenue sharing, and a centralized (cooperative) scenario. The results indicate that the centralized scenario has the most significant advantage compared to the two contracts of profit sharing and cost sharing. For example, the repair level of the ELVs, the amount of repaired vehicles demand, consumer surplus, and the whole supply chain's profit are at their maximum. The most significant impact of subsidy payment is related to the take-back center's profit and the ELV supply. On the other hand, the subsidy does not affect the profit of the repair center.

Value regimes and pricing in the pharmaceutical industry: financial capital inflation (hepatitis C) versus innovation and production capital savings for malaria medicines

The idea of this paper is to draw a parallel between two diametrically opposed political economies of medicine that coexist today. The first is embodied in the invention, appropriation, and distribution of antivirals for hepatitis C, particularly sofosbuvir, which was commercialized at an initial price of $85,000 in the United States, €56,000 in France, and $8000 in Brazil. These prices destabilized payers in both the North and the South. The second economy encompasses the invention, industrialization and distribution of new therapeutic combinations for malaria that were commercialized by Sanofi from 2007 onwards at a price of $1 per treatment for public markets. This price was set by a contract negotiated with Médecins sans Frontières. In this paper, I examine the pricing of these 2 classes of drugs, and I argue that the prices synthesize these political economies: they summarize the policy of appropriation of these molecules, aimed at their monopolization or a model of common good; they are referred to economic value regimes designed to optimize the profitability of advanced capital or to increase the accessibility of drugs for public payers and patients; and they are justified or contested by moral economies.

A Market Shaping Approach for the Biopharmaceutical Industry: Governing Innovation Towards the Public Interest

Enhancing research and development and ensuring equitable pricing and access to cutting-edge treatments are both vital to a biopharmaceutical innovation system that works in the public interest. However, despite delivering numerous therapeutic advances, the existing system suffers from major problems: a lack of directionality to meet key needs, inefficient collaboration, high prices that fail to reflect the public contribution, and an overly-financialized business model.

Legal cannabis market shares during Canada's first year of recreational legalisation

BACKGROUND

This study estimated legal products' share of Canada's total cannabis consumption during the first year of recreational legalisation, October 2018 to September 2019.

METHODS

Government data was used to estimate monthly recreational sales in dollars per capita, grams per user, and percentage share of kilograms or litres consumed. As explanatory factors, the analysis considered provincial differences in retail pricing (percentage mark-ups) and store density (stores per million users), as well as national monthly production of dry cannabis (kilograms) and cannabis oil (litres) finished products.

RESULTS

Legal recreational products' share of Canada's overall cannabis consumption began at 7.8% in October 2018 and grew to 23.7% by September 2019, with an average of 14.5% over the first 12 months. Sales growth was delayed by shortages of both dry cannabis products and licensed stores, but not cannabis oils. Across the 10 provinces, legal recreational shares in September 2019 varied from 13% to 70%; differences in store densities and retail prices partly explained the variation. Prince Edward Island's large 70% share seemed due to it having minimal product shortages, high store densities, and low prices.

CONCLUSIONS

Legal recreational products captured market share to the extent they were available, accessible, and low-priced. Problems with those factors slowed the initial expansion of legal product sales but also suggested ways to gradually increase their market share.

Islamic finance and food commodity trading: is there a chance to hedge against price volatility and enhance food security?

This paper evaluates current food commodity trading from the Shariah point of view, which is particularly relevant for the MENA region. It focuses on futures contracts as the main instrument for grain trading and analyzes the traders’ activities. Through a qualitative and multifaceted approach, the paper accumulates and evaluates the suggestions for 15 Shariah-based alternatives to futures by contemporary researchers. Sukuk, commodity funds and takaful programs are among potential structures that could be developed and broadly implemented. The research compares the current criticism of futures markets with the opinions of Islamic scholars and researchers, as well as Shariah standards. The paper also evaluates several recent suggestions by researchers to raise the efficiency of the international commodity trading market for the sake of food security. The results show that there is space for cooperation taking into account Islamic financial principles and conventional commodity exchange regulations, in combining existing best practices of the latter and the rulings of the former in engineering a sounder system of grain trading for the benefit of market players and the end consumers. This would require a joint effort and support from exchanges, standard-setting bodies, and regulators. Among the areas of cooperation are the approach towards corners (ihtikar), squeezes, speculation (gharar, maysir, and najash), and defining the border between reasonable and excess speculation; financial architecture using new technologies in developing a commodity trading contract conforming to the Shariah regulations and the exchange requirements. There is a need to develop the ideas for global food contracts and grain reserve systems, and to test the contracts based on existing exchanges.