“Reverse engineering” a formulary selection algorithm to determine the economic value of pentavalent and hexavalent combination vaccines

Abstract

Combination vaccines with overlapping, noncomplementary components are being introduced to reduce the number of separate injections required to immunize children. A vaccine selection algorithm using operations research techniques was developed as a tool for vaccine purchasers to assemble formularies of monovalent and combination vaccines that would satisfy the recommended immunization schedule. The algorithm weighs distinguishing features of economic consequence among competing vaccines to achieve the lowest overall cost to payers and/or to society for immunization. This method was adapted here to solve for the purchase price of several hypothetical future pentavalent and hexavalent combination vaccines that would permit each to “win” a place in such a lowest cost formulary. Integer programming and an iterative bisection search method determined the maximum “inclusion price” of 4 vaccines not licensed in the United States as of September, 2001 [diphtheria-tetanus-acellular pertussis (DTP a)-Haemophilus influenzaetype b (HIB)-hepatitis B (HBV), DTPa-HIB-inactivated polio vaccine (IPV), DTP a-HBV-IPV and DTPa-HIB-HBV-IPV], in competition with 15 existing formulations of licensed vaccines for these diseases at their March, 2000, federal contract discount prices. Both 5-visit and 6-visit scenarios were studied. Different preparation costs were assigned to lyophilized powder ($1.50), liquid ($0.75) and prefilled-syringe ($0.25) formulations/packaging. Injection costs were varied stepwise from $5 through $45 for each dose administered, shifting from a payer’s to a societal perspective. Overall inclusion prices (maximum price for each candidate vaccine to be included in a lowest cost formulary) ranged from $9 to $129 per dose depending on cost assumptions and usage frequency (values would be higher if competing against private-sector vaccine prices). The range was $27 to $68 per dose for DTP a-HIB-HBV, at optimal utilization to avoid extravaccination. Similarly, as injection costs varied from $5 to $45, DTPa-HIB-IPV ranged from $28 to $75. With the same assumptions, DTP a-HBV-IPV would earn a place in a best value formulary at prices from $35 to $76. As expected the inclusion prices for hexavalent DTPa-HIB-HBV-IPV, $40 to $123, were higher (reflecting more economic value) than for pentavalents. When the assumed injection costs rose to ≥$8, the more expensive HIB-HBV and DTPa-HIB tended to appear in lowest cost formularies, because their cost premium over separate monovalent and trivalent products was outweighed by the savings from one fewer injection. Reverse engineering the vaccine selection algorithm provides a tool to demonstrate the economic value of new combination vaccines and to make pricing decisions.