Country versus Pharmaceutical Company Interests for Hepatitis C Elimination

62 Pages Posted: 11 Jun 2020

See all articles by Roy Lothan

Roy Lothan

Tel Aviv University - Fleischman Faculty of Engineering

Noa Gutman

Tel Aviv University - Fleischman Faculty of Engineering

Dan Yamin

Tel Aviv University - Department of Industrial Engineering

Date Written: May 1, 2020

Abstract

Hepatitis C virus (HCV) is one of the leading causes of liver disease, and responsible for massive health and economic burden worldwide. In its early stages, the disease is asymptomatic, but it can progress over time to fatal end-stage liver disease. Thus, the majority of individuals infected with HCV are unaware of their chronic condition. Recent treatment options for HCV can completely cure the infection but are costly. We developed a game model between a pharmaceutical company (PC) and a country striving to maximize the utility of its citizens. First, the PC determines the price of HCV treatment; then, the country responds with corresponding screening and treatment strategies. We employed an analytical framework to calculate the utility of the players for each selected strategy. Calibrated to detailed HCV data, we found that the PC will gain higher revenue by offering a quantity discount rather than using standard linear pricing, by indirectly forcing the country to conduct more screening than it desires. We also present several strategies to substantially mitigate this sub-optimal outcome for the country. Thus, policy makers worldwide should prudently consider recent offers by PCs to increase screening either directly, via covering HCV screening, or indirectly, by providing discounts following a predetermined volume of sales. Our approach provides a rational explanation for the current agreements between countries and PCs. It is applicable in other healthcare settings where screening is essential to determine treatment strategies.

Keywords: Game Theory; Hepatitis C Virus; Healthcare Management; Cost-Effectiveness Analysis; HCV Screening

Suggested Citation

Lothan, Roy and Gutman, Noa and Yamin, Dan, Country versus Pharmaceutical Company Interests for Hepatitis C Elimination (May 1, 2020). Available at SSRN: https://ssrn.com/abstract=3592319 or http://dx.doi.org/10.2139/ssrn.3592319

Roy Lothan (Contact Author)

Tel Aviv University - Fleischman Faculty of Engineering ( email )

Tel Aviv 69978
Israel

Noa Gutman

Tel Aviv University - Fleischman Faculty of Engineering ( email )

Tel Aviv 69978
Israel

Dan Yamin

Tel Aviv University - Department of Industrial Engineering ( email )

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