Research Brief: Operations Research

Type of Research: Operations Research

Motivation for Research: Millions of children in low-income countries still do not have access to routine immunization. To ensure a sustained supply, any efforts to make vaccines affordable must ensure that they remain profitable.

We rely on mathematical programming models, optimization, and simulation to explore how vaccine affordability and profit can be enhanced by studying a hypothetically coordinated vaccine market. In particular, we explore the impact on affordability and profit of:

• having a different number of decision-makers coordinating vaccine procurement for market segments in a non-cooperative environment.
• grouping countries in various market segments and exploring alternative segmentation criteria.
• procuring order in a non-cooperative market.
• buying vaccine in formularies.

• Increasing tiered pricing levels in the vaccine market increases affordability and profitability.
• Unlike current market dynamics that encourage larger single-price markets for low-income countries, our studies suggest that low-income countries should be organized in smaller market segments with their own pricing. In contrast, middle- and high-income countries should be organized in large single-priced market segments.
• Low- and low-middle income countries can increase affordability during a procurement cycle by buying vaccines before higher-income countries.
• The assignment of countries to different market segments can severely affect their affordability. Ordering countries in descending gni per capita and then grouping them into market segments with similar gni and population size help extract more savings and profit.

This work is the basis for Bruno’s dissertation which he expects to defend in the Summer 2021.

Bruno is adapting the studies on the vaccine market for pediatric vaccines to a hypothetical coordinated system for the Covid-Sars vaccine. Through optimization methods, Bruno aims to understand:

• How profit and affordability can be enhanced for the Covax project supported by CEPI, GAVI, and the WHO.
• The effect on affordability for a coordinated market that considers that a dollar in savings is different from a dollar in profit across the globe.