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Country versus pharmaceutical company interests for hepatitis C treatment

Author

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  • Roy Lothan

    (Tel Aviv University)

  • Noa Gutman

    (Tel Aviv University)

  • Dan Yamin

    (Tel Aviv University)

Abstract

Hepatitis C virus (HCV) is one of the leading causes of liver disease and is responsible for massive health and economic burden worldwide. The disease is asymptomatic in its early stages, 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 its citizens' utility. 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 from Israel, we found that the PC will gain higher revenue by offering a quantity discount rather than using standard fixed pricing per treatment, by indirectly forcing the country to conduct more screening than it desired. By contrast, risk-sharing agreements, in which the country pays only for successful treatments are beneficial for the country. Our findings underscore that 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. More broadly, our approach is applicable in other healthcare settings where screening is essential to determine treatment strategies.

Suggested Citation

  • Roy Lothan & Noa Gutman & Dan Yamin, 2022. "Country versus pharmaceutical company interests for hepatitis C treatment," Health Care Management Science, Springer, vol. 25(4), pages 725-749, December.
    • Handle: RePEc:kap:hcarem:v:25:y:2022:i:4:d:10.1007_s10729-022-09607-2
    DOI: 10.1007/s10729-022-09607-2
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    References listed on IDEAS

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    Cited by:

    1. Dubois, Pierre & Magnac, Thierry, 2024. "Optimal intertemporal curative drug expenses: The case of hepatitis C in France," Journal of Health Economics, Elsevier, vol. 94(C).

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