Pricing the COVID-19 vaccine: A mathematical approach
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2101.03234.pdf
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304.67 KB
Format
Adobe PDF
Checksum (MD5)
12a31fd5db57509e6db7e8d8fc9552e0
Author(s)
Martonosi, Susan E.
Behzad, Banafsheh
Cummings, Kayla
Date Issued
September 2021
Journal
Omega
Publisher
Elsevier BV
Citation
Martonosi, Susan E. et al. "Pricing the COVID-19 vaccine: A mathematical approach." Omega, 103 (September 2021): 102451.
Version
Original manuscript
Abstract
According to the World Health Organization, development of the COVID-19 vaccine is occurring in record time. Administration of the vaccine has started the same year as the declaration of the COVID-19 pandemic. The United Nations emphasized the importance of providing COVID-19 vaccines as a global public good, which is accessible and affordable world-wide. Pricing the COVID-19 vaccines is a controversial topic. We use optimization and game theoretic approaches to model the COVID-19 U.S. vaccine market as a duopoly with two manufacturers Pfizer-BioNTech and Moderna. The results suggest that even in the context of very high production and distribution costs, the government can negotiate prices with the manufacturers to keep public sector prices as low as possible while meeting demand and ensuring each manufacturer earns a target profit. Furthermore, these prices are consistent with those currently predicted in the media.
MIT Department
Massachusetts Institute of Technology. Operations Research Center
Terms of Use
Creative Commons Attribution-NonCommercial-NoDerivs License
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1016/j.omega.2021.102451
