The cost-effectiveness of disease-modifying therapies for the treatment of relapsing-remitting multiple sclerosis

Background: The safety and efficacy of disease-modifying therapies (DMTs) for relapsing-remitting multiple sclerosis (RRMS) has been established; however, it is not clear which provides optimal value, given benefit-risk profiles and costs.

Aims: To compare the cost-effectiveness of current DMTs for patients with RRMS in the US.

Materials and methods: A Markov model predicting RRMS course following initiation of a DMT was created comparing outcomes (e.g. relapses, disease progression) and costs of natalizumab (NTZ), dimethyl fumarate (DMF), and peginterferon beta-1a (PEG) with fingolimod (FIN), glatiramer acetate (GA, 20?mg daily), and subcutaneous interferon beta-1a (IFN, 44?mcg), respectively, over 10 years. RRMS and secondary-progressive MS (SPMS) EDSS state transitions were predicted in 3-month cycles in which patients were at risk of death, relapse, or discontinuation. Upon DMT discontinuation, natural history progression and relapse rates were applied. Incremental cost-effectiveness ratios (ICERs) were estimated for the cost per relapse avoided, relapse-free years gained, progression avoided, and progression-free years gained. The impact of model parameters on outcomes was evaluated via one-way sensitivity analyses.

Results: Costs ranged from $561,177 (NTZ) to $616,251 (GA). NTZ, DMF, and PEG were dominant (less costly and more effective) compared to FIN, GA, and IFN, respectively, for all ICERs. Variability in drug costs and parameters that affected drug cost accrual (e.g. discontinuation rates and the decision to drop out after SPMS conversion) had a considerable impact on ICERs.

Limitations: Several simplifying assumptions were made that may represent potential limitations of this analysis (e.g. a constant treatment effect over time was assumed).

Conclusions: The results from this analysis suggest that the NTZ, DMF, and PEG are cost-effective DMT choices compared to FIN, GA, and IFN, respectively. The actual impact on a particular plan will vary based on drug pricing and other factors affecting drug cost accrual.     

Elevating Repositioning Costs: Strategy Dynamics and Competitive Interactions

Research summary: This article proposes an approach for modeling competitive interactions that incorporates the costs to firms of changing strategy. The costs associated with strategy modifications, which we term “repositioning costs,” are particularly relevant to competitive interactions involving major changes to business strategies. Repositioning costs can critically affect competitive dynamics and, consequently, the implications of strategic interaction for strategic choice. While the literature broadly recognizes the importance of such costs, game‐theoretic treatments of major strategic change, with very limited exceptions, have not addressed them meaningfully. We advocate greater recognition of repositioning costs and illustrate with two simple models how repositioning costs may facilitate differentiation and affect the value of a firm's capability to reduce repositioning costs through investments in flexibility. Managerial summary: This article illustrates how the decision to make a strategic change is affected by both the cost to the firm of making the various strategy modifications, as well as the cost to its rivals of changing their strategies in response. These “repositioning costs” are important because they shape the responses each competitor would likely make to a move by the other competitor, and should be anticipated when considering an initial change to one's own strategy. The paper shows how repositioning costs can be used strategically to facilitate differentiation, and to assess the value of potential investments in flexibility. Copyright © 2017 John Wiley & Sons, Ltd.     

OPTION PRICING AND HEDGING WITH SMALL TRANSACTION COSTS

An investor with constant absolute risk aversion trades a risky asset with general Itô‐dynamics, in the presence of small proportional transaction costs. In this setting, we formally derive a leading‐order optimal trading policy and the associated welfare, expressed in terms of the local dynamics of the frictionless optimizer. By applying these results in the presence of a random endowment, we obtain asymptotic formulas for utility indifference prices and hedging strategies in the presence of small transaction costs.     

How thick is the border: the relative cost of Canadian domestic and cross-border truck-borne trade, 2004–2009

Despite the elimination of tariff barriers between Canada and the United States, the volume of trade between the two countries is less than would be expected in the absence of impediments. While considerable work has been done to gauge the degree of integration between the Canadian and U.S. economies through trade, relatively little analysis has parsed out the underlying costs of the border. The costs of crossing the border can be divided into formal tariff barriers, non-tariff barriers, and the cost of the transport system. This paper focuses on the latter by estimating the cost of shipping goods by truck between Canada and the U.S. during the 2004–2009 period. The incremental cost of import and export over domestic shipments is measured in both absolute and ad valorem terms. The latter provides an estimate of the border increment in transportation cost as a tariff equivalent. The incremental cost is further broken down into fixed and variable (line-haul) components. Higher fixed costs are consistent with border delays and border compliance costs being passed on to the consumers of trucking services. Higher line-haul costs may result from difficulties obtaining backhauls for a portion of the trip home, which may stem from trade imbalances and regulations that restrict the ability of Canadian-based carriers to transport goods between two points in the U.S.     

利益相关者与资本结构决策

传统权衡理论中的破产成本主要考虑的是,由重组或清算所带来的法律成本和管理成本之类的直接破产成本,以及由股东和债权人之间的矛盾而引起的在企业财务危机期间发生的间接破产成本。现代权衡理论基于利益相关者的考虑拓展了以前的间接破产成本内涵,主要是考虑了企业财务危机或破产清算给其他利益相关者带来的危害。这不但使企业的资本结构决策渗入了更多的战略因素,而且可以解释现实中许多企业的看似保守的融资行为。     

Taking the Lab to the Field: Experimental Tests of Alternative Mechanisms to Procure Multiple Contracts

The first part of the paper reports the results from a sequence of laboratory experiments comparing the bidding behavior for multiple contracts in three different sealed bid auction mechanisms; first-price simultaneous, first-price sequential and first-price combinatorial bidding. The design of the experiment is based on experiences from a public procurement auction of road markings in Sweden. Bidders are asymmetric in their cost functions; some exhibit decreasing average costs of winning more than one contract, whereas other bidders have increasing average cost functions. The combinatorial bidding mechanism is demonstrated to be most efficient. The second part of the paper describes how the lab experiment was followed up by a field test of a combinatorial procurement auction of road markings.     

Rent control with rationing by search costs: A note

This note derives the long-run implications of rent controls when rent-controlled apartments are implicitly rationed to tenants who are more efficient in searching for apartments in the controlled sector. Rent controls are shown to involve transfers that essentially are from some to other tenants, as well as dead-weight losses due to higher search costs that are borne by tenants. Key to this analysis is the condition that, at the margin, rent plus the higher cost of search for a rent-controlled apartment must equal rent in the noncontrolled sector.     

Social incidence and economic costs of carbon limits

This paper discusses both distributional and allocational effects of limiting carbon dioxide emissions in a small and open economy. It starts from the assumption that Switzerland attempts to stabilize its greenhouse gas emissions over the next 25 years, and evaluates costs and benefits of the respective reduction program. From a methodological viewpoint, this paper illustrates, how a computable general equilibrium approach can be adopted for identifying economic effects of cutting greenhouse gas emissions on the national level. From a political economy point of view it considers the social incidence of a greenhouse policy. It shows in particular that public acceptance can be increased and economic costs of greenhouse policies can be reduced, if carbon taxes are accompanied by revenue redistribution.     

Absorption versus direct costing: the relevance of opportunity costs in the management of congested stochastic production systems

This paper investigates the relative performance of absorption versus direct costing procedures. Traditionally, absorption costing procedures have been defended on the basis of them acting as a proxy for hard to measure opportunity costs. We question the validity of this traditional defence by explicitly considering the extent to which absorption costing-based accounting calculations actually provide good proxies. Our analysis shows that in some situations absorption costing so over estimates opportunity costs that it would be preferable to use direct costing even though this implicitly assumes opportunity costs are zero. Thus, given that we establish that one can notalwaysuse the existence of opportunity costs as a defence for the adoption of absorption costing procedures we next identifyspecificconditions for which if satisfied, we can unambiguously defend the adoption of absorption costing. We develop an ‘open acceptance condition’ which if satisfied insures that a production system directed by absorption costs out performs a system based upon direct costs.     

PORTFOLIO MANAGEMENT WITH TRANSACTION COSTS: AN ASYMPTOTIC ANALYSIS OF THE MORTON AND PLISKA MODEL

We examine the Morton and Pliska (1993) model for the optimal management of a portfolio when there are transaction costs proportional to a fixed fraction of the portfolio value. We analyze this model in the realistic case of small transaction costs by conducting a perturbation analysis about the no-transaction-cost solution. Although the full problem is a free-boundary diffusion problem in as many dimensions as there are assets in the portfolio, we find explicit solutions for the optimal trading policy in this limit. This makes the solution for a realistically large number of assets a practical possibility.