Cost-effectiveness of telaprevir in combination with pegylated interferon alpha and ribavirin in previously untreated chronic hepatitis C genotype 1 patients

Background:

Telaprevir (T, TVR) is a direct-acting antiviral (DAA) used for the treatment of genotype 1 chronic hepatitis C virus (HCV) infection. The sustained virological response (SVR) rates, i.e., undetectable HCV RNA levels 24 weeks after the end of treatment, is what differentiate treatments. This analysis evaluated the cost-effectiveness of TVR combined with pegylated interferon (Peg-IFN) alfa-2a plus ribavirin (RBV), with Peg-IFN and RBV (PR) alone or with boceprevir (B, BOC) plus Peg-IFN alfa-2b and RBV, in naïve patients.

Methods:

A Markov cohort model of chronic HCV disease progression reflected the pathway of naïve patients initiating anti-HCV therapy. SVR rates were derived from a mixed-treatment comparison including results from Phase II and III trials of TVR and BOC, and trials comparing both PR regimens. SVR has significant impact on survival, quality-of-life, and costs. Incremental cost per life year (LY) gained and quality-adjusted-life-year (QALY) gained were computed at lifetime, adopting the (National Health Service) NHS perspective. Cost and health outcomes were discounted at 3.5%. Uncertainty was assessed using deterministic and probabilistic sensitivity analyses. Sub-group analyses were also performed by interleukin (IL)-28B genotype and fibrosis stage.

Results:

Higher costs and improved outcomes were associated with T/PR relative to PR alone, resulting in an ICER of £12,733 per QALY gained. T/PR retained a significant SVR advantage over PR alone and was cost-effective regardless of IL-28B genotype and fibrosis stages. T/PR regimen ‘dominated’ B/PR, generating 0.2 additional QALYs and reducing lifetime cost by £2758. Sensitivity analyses consistently resulted in ICERs less than £30,000/QALY for the T/PR regimen over PR alone.

Limitations:

No head-to-head trial provides direct evidence of better efficacy of T/PR vs B/PR.

Conclusion:

The introduction of TVR-based therapy for genotype 1 HCV patients is cost-effective for naïve patients at the £30,000 willingness-to-pay threshold, regardless of IL-28B genotype or fibrosis stage.     

Reputation and Corporate Social Responsibility Aberrations,Trends, and Hypocrisy: Reactions to Firm Choices in the Stock Option Backdating Scandal

Drawing on strategic corporate social responsibility (CSR) and reputation theory, this paper examines the market reaction to firm disclosures of involvement in the US stock option backdating scandal. We examine how a firm's prior signals regarding ethical behaviour and values, as demonstrated through CSR initiatives, may both ameliorate and exacerbate market reactions. CSR initiatives may buffer a firm against general wrong‐doing but expose it to greater scrutiny and sanction for related wrong‐doing. Our results show that firms with enhanced overall reputations for CSR are partially buffered from scandal revelations. However, we find that when firms possess an enhanced reputation for CSR associated with corporate governance, violations pertaining specifically to governance are viewed as hypocritical and more harshly sanctioned. We also find lower and negative market reactions for firms that delay but self‐disclose their involvement in the scandal. The study extends the emergent, related literatures on strategic CSR and reputation management, and documents dynamics in the relationship between corporate social and financial performance.     

Tracking Progress Towards Statistical Capacity Building Efforts: The African Statistical Development Index

This paper presents the development of the African Statistical Development Index, a composite index that aims at supporting the monitoring and evaluation of the implementation of the Reference Regional Strategic Framework for Statistical Capacity Building in Africa. It also helps to identify, for each African country, weaknesses and strengths of the National Statistical Systems so that support interventions can be developed. The paper first gives the rationale behind the development of the index as well as the context. It then elaborates on the methodology used to develop the index, including the selection of components and variables, the scaling of the variables, the weighting and aggregation schemes, and the validation process. The methodology is applied to a sample of African countries. Finally, the paper compares the proposed index to existing statistical capacity building indicators and highlights the related limitations.     

A CONTINGENT VALUATION STUDY OF UNCERTAIN ENVIRONMENTAL GAINS

Acid deposition in a present and future cause of biodiversity losses in vulnerable upland areas of Scotland important for nature conservation. However, the exact nature of damages under the status quo, and both the timing and extent of recovery of upland ecosystems if deposition is reduced, are subject to uncertainty. this uncertainty complicates damages cost estimation. In this paper, we have explored the use of CVM to measure the willingness to pay (WTP) of the Scottish population for uncertain recovery/damage scenarios from reduced acid rain deposition. An optimally-designed referendum format was used utilising the distribution of open-ended bids from a pilot study to determine bid amounts and sampling size for each bid amount. Eight explanatory variables, including future damage level were selected in a non-linear step-wise regression analysis. Average household WTP for abatement of acid rain was £247 and £351 per year when faced with low and high future damage levels respectively. Recovery level and recovery time did not significantly influence WTP. When faced with risky outcomes regarding future damage and recovery level, respondent were found to be risk averse to both environmental gains and losses.     

Finite-sample size distortion of the AESTAR unit root test: GARCH,corrected variance–covariance matrix estimators and adjusted critical values

The behaviour of the asymmetric exponential smooth transition autoregressive (AESTAR) unit root test, which allows for asymmetric and nonlinear reversion to equilibrium, is examined in the presence of generalized autoregressive conditional heteroscedasticity (GARCH). It is found that while the test is relatively robust in the presence of ‘low volatility’ GARCH processes, it exhibits substantial size distortion when large values of the volatility parameter are considered. Attempted resolution via the routine application of heteroscedasticity consistent (or ‘corrected’) covariance matrix estimators (HCCMEs) is shown to result in overwhelming size distortion due to their impact upon the finite-sample distribution of the underlying test statistic. However, application of a corrected HCCME, in combination with critical values derived specifically under its use, results in the control of test size. Analogous results for the Dickey–Fuller (1979) test are presented to permit comparison with a test considering linear, symmetric adjustment. It is found that the AESTAR test is subject to far greater distortion than its linear, symmetric alternative. In summary, the results indicate that caution must be exercised when applying the AESTAR test to macroeconomic and financial time series, particularly if routine application of corrected covariance matrix estimators occurs.     

THE NEW LEVERAGED LOAN SYNDICATION MARKET

Over the past ten years, commercial lending has been transformed from a one-off, bilateral "market" in which issuers maintained one or more separate banking relationships into a capital market in which one or more underwriters structure and price loans for syndication to groups of investors. This market-driven evolution has been most dramatic in the leveraged lending segment (defined as loans priced at LIBOR plus 150 basis points or more), where wide margins have attracted a large and growing field of underwriters, intermediaries, and investors.
Liquidity is the overriding theme in today's syndicated loan market, making the market a more user-friendly one for corporate borrowers and deal sponsors. As a result, a record number of corporate issuers are taking advantage of the syndicated loan market to finance strategic transactions or simply to reduce their borrowing costs. Deal sponsors, too, are tapping the market to finance leveraged buyouts, recapitalizations, and acquisitions at a pace not seen since the late 1980s. But, although acquisition pricing has reached cash flow multiples that recall those of the late '80s, equity contributions by sponsors are larger and credit structures are more conservative.
For banks and other investors, reduced loan pricing and more flexible credit structures have been balanced by much greater access to a large volume of diversified assets, as well as the ability to manage asset-specific and portfolio risk more effectively. As a result of more effective portfolio management strategies, lenders today are less vulnerable to credit problems with individual issuers or a given industry segment, and the bank market as a whole should be much less subject to disruption than it proved to be in the early 1990s.     

Trading House Price Risk with Existing Futures Contracts

This paper examines the use of futures contracts to hedge residential real estate price risk. We examine whether existing futures contacts can effectively be used to offset volatility in national house prices. Little evidence of any simple systematic relation between national prices and futures prices is found. Since house prices are not easily replicated with a portfolio of existing futures contracts, a further implication is that the Chicago Mercantile’s introduction of a financial asset whose value reflects house prices will help complete the market. Nevertheless, the success of the CME’s new derivative contracts may be limited in light of state and regional house price correlations.

Why Do the Gains from Trade Reform Vary Between Countries?

This paper assesses, both theoretically and empirically, the determinants of differential gains from trade policy reform across countries. The theoretical model shows that asymmetrical features of the world economy, including the relative size of the differentiated products sector in each country, the dominance of domestic markets by indigenous producers, trade costs, and the relative importance of exports, all play an important role. Results from a multi-region computable general equilibrium model substantiate the proposition that the initial pattern of asymmetry is relatively more important than scale and varietal effects, despite the fact that the latter have received more attention in the literature.     

A SIMULATION ANALYSIS OF HERDING AND UNIFRACTAL SCALING BEHAVIOUR

We model the financial market using a class of agent‐based models in which agents’ expectations are driven by heuristic forecasting rules (in contrast to the rational expectations models used in traditional theories of financial markets). We show that, within this framework, we can reproduce unifractal scaling with respect to three well‐known power laws relating (i) moments of the absolute price change to the time‐scale over which they are measured, (ii) magnitude of returns with respect to their probability and (iii) the autocorrelation of absolute returns with respect to lag. In contrast to previous studies, we systematically analyse all three power laws simultaneously using the same underlying model by making observations at different time‐scales and higher moments. We show that the first two scaling laws are remarkably robust to the time‐scale over which observations are made, irrespective of the model configuration. However, in contrast to previous studies, we show that herding may explain why long memory is observed at all frequencies. Copyright © 2013 John Wiley & Sons, Ltd.     

Problems in Acquiring Mineral Revenues for Financing Economic Development: A Case Study of Zambia During 1970–78

A bstract . During the 1970s Zambia granted tax incentives to transnational mining companies (thereby foregoing some revenue ) in order to achieve expected investment benefits to the economy and government. The Government also acquired ownership interests in the companies via asset acquisition. Global market forces turned against Zambia's interests, and expected benefits were not forthcoming because company profits had become the sole tax base in the mineral sector. Zambia's experience from 1970 to 1978 suggests that it and other mineral export countries should (a) evaluate carefully whether reducing the effective tax rate on company profits actually induces investment , and (b) consider thoroughly whether a tax scheme that includes a proper mix of profit, mineral and export levies is more appropriate than a single tax base.