"Optimal Pricing, Purchasing, and Co-Development with Applications in Public and Private Sector Pharmaceutical Management"

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I will investigate a number of issues related to optimal purchasing contracts, optimal pricing, and optimal co-development opportunities, all of which are motivated by management problems in the pharmaceutical and biotechnology industries. These topics (pricing, purchasing and co-development) are closely related and tied together by the following trends: 1. The use of cost-effectiveness or net benefits analysis as a criteria for drugs to be listed on formularies; 2. The increasing use of "risk sharing" contracts between drug purchasers, such as government insurance plans, and drug manufacturers; 3. The development of very expensive drugs which are only effective for a portion of the population; and 4. The promise of genetic tests to help identify, and thus target, those who are most likely to benefit from new targeted therapies. These trends lead to a number of challenging management problems for managers of public sector drug plans, as well as manufacturers of drugs and genetic tests. In this research I will develop operations research models to help gain insight into these problems. Note that the focus of this research is not on the clinical or basic science issues underlying these trends but rather on the development of mathematical models to address the management issues, in both the public and private sector, that arise from these trends.