title: Pricing strategies for combination pediatric vaccines and their impact on revenue: Pediarix or Pentacel?
abstract: This paper analyzes pricing strategies for pediatric combination vaccines and their impact on the United States pediatric vaccine market. Three pharmaceutical companies compete pairwise with each other over the sale of vaccines containing two or three antigens per injection. Specific emphasis is placed on examining the competition between two pentavalent vaccines: GlaxoSmithKline's Pediarix (DTaP-HepB-IPV) and Sanofi Pasteur's Pentacel (DTaP-IPV/Hib). The main contribution of the paper is to provide a methodology for analyzing pricing strategies of directly competing, partially overlapping, and mutually exclusive combination vaccines in the United States pediatric vaccine market, with the goal of maximizing each pharmaceutical company's expected revenue. The resulting analysis shows that Pentacel is not competitively priced when compared to Pediarix, its strongest competitor, for federal contract prices ending 31 March 2010. Accordingly, Sanofi Pasteur should expect to generate low revenue upon market entry, while Pediarix remains well priced, with GlaxoSmithKline able to generate a high level of revenue at the expense of Sanofi Pasteur. The proposed pricing approach suggests an appropriate price for Pentacel whereby a substantial increase in expected revenue can be realized.
authors.affiliation: Department of Industrial and Enterprise Systems Engineering, University of Illinois, Urbana, IL, USA.
authors.forename: Matthew J
authors.initials: MJ
authors.lastname: Robbins
authors.forename: Sheldon H
authors.initials: SH
authors.lastname: Jacobson
authors.forename: Edward C
authors.initials: EC
authors.lastname: Sewell
mesh_terms: D000465:Algorithms; D002648:Child; D015721:Diphtheria-Tetanus-Pertussis Vaccine / Q000191:economics*; D018073:Haemophilus Vaccines / Q000191:economics*; D017325:Hepatitis B Vaccines / Q000191:economics*; D006801:Humans; D011054:Poliovirus Vaccine, Inactivated / Q000191:economics*; D011382:Programming, Linear; D014481:United States; D017778:Vaccines, Combined / Q000191:economics
chemical_list: D015721:Diphtheria-Tetanus-Pertussis Vaccine; D018073:Haemophilus Vaccines; D017325:Hepatitis B Vaccines; C472675:PEDIARIX; D011054:Poliovirus Vaccine, Inactivated; D017778:Vaccines, Combined; C512971:pentacel
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