Why Are Drugs More Profitable Than Vaccines?

In a simple representative consumer model, vaccines and drug treatments yield the same revenue for a pharmaceutical manufacturer, implying that the firm would have the same incentive to develop either ceteris paribus. We provide more realistic models in which the revenue equivalence breaks down for two reasons. First, drug treatments are sold after the firm has learned who has contracted the disease; in the case of heterogeneous consumers who vary with respect to the probability of contracting the disease, there is less asymmetric information to prevent the firm from extracting consumer surplus with drug treatments than with vaccines. We prove that, due to this aspect of pharmaceutical pricing, the ratio of drug-treatment to vaccine revenue can be arbitrarily high; we calculate that the ratio is about two to one for empirical distributions of HIV risk. The second reason for the breakdown of revenue equivalence is that vaccines are more likely to interfere with the spread of the disease than are drug treatments, thus reducing demand for the product. By embedding an economic model within a standard dynamic epidemiological model, we show that the steady-state flow of revenue is greater for drug treatments than for vaccines.

The Navy/NASA Engine Program (NNEP89): A user's manual

An engine simulation computer code called NNEP89 was written to perform 1-D steady state thermodynamic analysis of turbine engine cycles. By using a very flexible method of input, a set of standard components are connected at execution time to simulate almost any turbine engine configuration that the user could imagine. The code was used to simulate a wide range of engine cycles from turboshafts and turboprops to air turborockets and supersonic cruise variable cycle engines. Off design performance is calculated through the use of component performance maps. A chemical equilibrium model is incorporated to adequately predict chemical dissociation as well as model virtually any fuel. NNEP89 is written in standard FORTRAN77 with clear structured programming and extensive internal documentation. The standard FORTRAN77 programming allows it to be installed onto most mainframe computers and workstations without modification. The NNEP89 code was derived from the Navy/NASA Engine program (NNEP). NNEP89 provides many improvements and enhancements to the original NNEP code and incorporates features which make it easier to use for the novice user. This is a comprehensive user's guide for the NNEP89 code

Using Data to Drive State Improvement in Enrollment and Retention Performance

Outlines the RWJF Maximizing Enrollment program's core performance measures for Medicaid and Children's Health Insurance Program enrollment and retention, designed to assess state efforts to better utilize data to monitor and improve outreach and policy

The Identity of the Generator in the Problem of Social Cost

One of Coase\u27s central insights is that distinguishing between the generator and recipient of an externality is of limited value because externality problems are reciprocal. We reconsider the relevance of the identity of the generator in a model with non-contractible investment ex ante but frictionless bargaining over the externality ex post. In this framework, a party may distort its investment to worsen the other\u27s threat point in bargaining. We demonstrate that the presence of this distortion depends, among other factors, on whether the investing party is a generator. Social efficiency can sometimes be improved by conditioning property rights on the identity of the generator: for example, assigning damage rights if the rights holder is a generator and injunction rights if the rights holder is a recipient can be more efficient than either unconditional damage or injunction rights

An Empirical Study of Pricing Strategies in an Online Market with High Frequency Price Information

We study competition among a score of firms participating in an online market for a commodity-type memory module. Firms were able to adjust prices continuously; prices determined how the firms were ranked and listed (lowest price listed first), with better ranks contributing to firms’ sales. Using a year’s worth of hourly data, we document the pricing dynamics, cycles, and other patterns in this market. We then characterize empirically the factors which drive price changes, noting clear evidence of firm heterogeneity in the choice of pricing strategy. Finally, we develop a framework for simulating counterfactual market settings, using the simulations to examine counterfactuals involving different mixes of firms according to pricing strategies

Does Online Availability Increase Citations? Theory And Evidence From A Panel Of Economics And Business Journals

Does online availability boost citations? Using a panel of citations to economics and business journals, we show that the enormous effects found in previous studies were an artifact of their failure to control for article quality, disappearing once fixed effects are added as controls. The absence of aggregate effects masks heterogeneity across platforms: JSTOR has a uniquely large effect, boosting citations around 10%. We examine other sources of heterogeneity, including whether JSTOR disproportionately increases cites from developing countries or to ‘‘long-tail’’ articles. Our theoretical analysis informs the econometric specification and allows citation increases to be translated into welfare terms

Identifying the Effect of Open Access on Citations Using a Panel of Science Journals

An open‐access journal allows free online access to its articles, obtaining revenue from fees charged to submitting authors or from institutional support. Using panel data on science journals, we are able to circumvent problems plaguing previous studies of the impact of open access on citations. In contrast to the huge effects found in these previous studies, we find a more modest effect: moving from paid to open access increases cites by 8% on average in our sample. The benefit is concentrated among top‐ranked journals. In fact, open access causes a statistically significant reduction in cites to the bottom‐ranked journals in our sample, leading us to conjecture that open access may intensify competition among articles for readers\u27 attention, generating losers as well as winners

Countervailing Power In Wholesale Pharmaceuticals

Using data on wholesale prices for antibiotics sold to U.S. drugstores, we test the growing theoretical literature on ‘countervailing power’ (a term for the ability of large buyers to extract discounts from suppliers). Large drugstores receive a modest discount for antibiotics produced by competing suppliers but no discount for antibiotics produced by monopolists. These findings support theories suggesting that supplier competition is a prerequisite for countervailing power. As further evidence for the importance of supplier competition, we find that hospitals receive substantial discounts relative to drugstores, attributed to hospitals\u27 greater ability to induce supplier competition through restrictive formularies

Should Firms Be Allowed to Indemnify Their Employees for Sanctions?

Policymakers have questioned whether firms should be allowed to indemnify their employees for personal sanctions for corporate crimes. This article provides the first formal analysis of this form of indemnification. Targeting employees with unindemnifiable sanctions carries the social cost of exposing employees of law-abiding firms to the risk of mistaken government prosecution. Deterrence is typically achieved more efficiently by sanctioning the firm alone. We find the circumstances under which the government shouldadditionally sanction employees to be quite limited and the circumstances under which the government should ban indemnification of these sanctions to be more limited still. One circumstance is when an unindemnifiable employee sanction provides prosecutors with leverage to adjust the employee\u27s sanction in exchange for his cooperation against the firm

Lessons Learned During TBCC Design for the NASA-AFRL Joint System Study

NASA and the Air Force Research Laboratory are involved in a Joint System Study (JSS) on Two-Stage-to-Orbit (TSTO) vehicles. The JSS will examine the performance, operability and analysis uncertainty of unmanned, fully reusable, TSTO launch vehicle concepts. NASA is providing a vehicle concept using turbine-based combined cycle (TBCC) propulsion on the booster stage and an all-rocket orbiter. The variation in vehicle and mission requirements for different potential customers, combined with analysis uncertainties, make it problematic to define optimum vehicle types or concepts, but the study is being used by NASA for tool assessment and development, and to identify technology gaps. Preliminary analyses were performed on the entire TBCC booster concept; then higher-fidelity analyses were performed for particular areas to verify results or reduce analysis uncertainties. Preliminary TBCC system analyses indicated that there would be sufficient thrust margin over its mission portion. The higher fidelity analyses, which included inlet and nozzle performance corrections for significant area mismatches between TBCC propulsion requirements versus the vehicle design, resulted in significant performance penalties from the preliminary results. TBCC system design and vehicle operation assumptions were reviewed to identify items to mitigate these performance penalties. The most promising items were then applied and analyses rerun to update performance predictions. A study overview is given to orient the reader, quickly focusing upon the NASA TBCC booster and low speed propulsion system. Details for the TBCC concept and the analyses performed are described. Finally, a summary of "Lessons Learned" are discussed with suggestions to improve future study efforts