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Competitive dynamics in pharmaceutical markets: A case study in the chronic cardiac disease market

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Journal of the Operational Research Society

Abstract

A modelling project involved system dynamics simulation of chronic cardiac disease in Bulgaria, examining the dynamic behaviour of a cardiac drug molecule in the market. The system dynamics model was calibrated using market data sourced from the Bulgarian National Health Care Fund, the Bulgarian Generic Pharmaceutical Association and a market research firm. The main results of the study showed that the timing of access to market was a critical driver in reducing prices and providing wider, as well as more affordable, access for patients to medicinal therapy. Our findings indicate that healthcare authorities may obtain savings while, at the same time, they may provide conditions for more patients to be treated depending on the timing of access to market of new generic drugs.

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Notes

  1. Causal loop diagrams are used to illustrate feedback systems (Sterman, 2000). There are four main components: arrows, polarity, delays and feedback processes. Arrows indicate the direction of causality between two variables. Signs (‘+’ or ‘−’) at arrow heads indicate the polarity of relationships between two variables: a ‘+’ indicates that an increase (decrease) in a variable causes an increase (decrease) in the related variable, ceteris paribus. If the sign is ‘−’, an increase (decrease) in a variable will cause a decrease (increase) in the related variable. However, changes between variables may take some time before they occur. Delays between two variables are represented using a line crossing an arrow, for example the link between market share and patients treated with Gx in Figure 2. The nature of the feedback processes is represented using ‘loop identifiers’, such as R1, which indicate the type of feedback process. ‘R’ denotes a positive (self-reinforcing) feedback (Sterman, 2000).

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Acknowledgements

We are very grateful for the comments received from our reviewers as they help us to improve our paper substantially.

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Correspondence to M Kunc.

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Kunc, M., Kazakov, R. Competitive dynamics in pharmaceutical markets: A case study in the chronic cardiac disease market. J Oper Res Soc 64, 1790–1799 (2013). https://doi.org/10.1057/jors.2012.150

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