Pharmaceutical ecomonics and politics vs. patient safety : Lumiracoxib in Australia

Lumiracoxib (Prexige©) 200 mg was listed in Australia’s Pharmaceutical Benefits Scheme (PBS) schedules on 01 August 2006. The listing was intended as a cost-minimisation strategy, as lumiracoxib 200 mg was deemed equivalent in therapeutic effect to celecoxib (Celebrex©) 200 mg, and was available at a lower cost. By the time of listing on the PBS, a safety re-evaluation of the recommended daily dose of lumiracoxib was being considered in other national regulatory jurisdictions. Within 3 months of listing, the manufacturer revised the recommended dosage to half that of the PBS-listed dosage. However, the PBS listing was neither revoked nor modified. At the time of listing on the PBS, lumiracoxib was known to be 17 times as biochemically selective in inhibiting the COX-2 isoform as celecoxib, and twice as selective as rofecoxib, already withdrawn for safety reasons. Safety concerns had already been raised about adverse hepatic outcomes on daily doses of lumiracoxib 200 mg. Communication of information about the risk potential of lumiracoxib was inadequate. Economic and political considerations were prioritised over patient safety, and lumiracoxib 200 mg remained available via the PBS until 10 August 2007, when it was withdrawn for safety reasons following cases of hepatic morbidity and mortality.

An algorithm to median shortest path problem (MSPP) in the design of urban transportation networks

This paper proposes an efficient solution algorithm for realistic multi-objective median shortest path problems in the design of urban transportation networks. The proposed problem formulation and solution algorithm to median shortest path problem is based on three realistic objectives via route cost or investment cost, overall travel time of the entire network and total toll revenue. The proposed solution approach to the problem is based on the heuristic labeling and exhaustive search technique in criteria space and solution space of the algorithm respectively. The first labels each node in terms of route cost and deletes cyclic and infeasible paths in criteria space imposing cyclic break and route cost constraint respectively. The latter deletes dominated paths in terms of objectives vector in solution space in order to identify a set of Pareto optimal paths. The approach, thus, proposes a non-inferior solution set of Pareto optimal paths based on non-dominated objective vector and leaves the ultimate decision to decision-makers for purpose specific final decision during applications. A numerical experiment is conducted to test the proposed algorithm using artificial transportation network. Sensitivity analyses have shown that the proposed algorithm is advantageous and efficient over existing algorithms to find a set of Pareto optimal paths to median shortest paths problems.

Expansion of congested railway capacity using triple-track line operation based on hourly passenger demand

This paper proposes a method of improving level of service in congested urban railways by means of a triple-track line operation for a highly dense urban area with special travel demand characteristics. Where the future travel demand forecasts show sluggish growth or no growth at all, there is little to no incentives for heavy railway investments like quadruple-track extension and construction of new railway routes to alleviate current railway congestion problems. In such a situation, triple-track line operation can be the best alternative due to its moderate investment cost and ease in land acquisition for just an additional single track along the existing tracks. Our simulation investigation in one of the congested railway lines in Tokyo showed that triple track line operation increases railway capacity by 26% and shortens travel time by 38% in peak direction during morning peak hours. These results are encouraging and are useful for removing current railways problems in Tokyo and in similar urban situations elsewhere.

Dynamically opted protection envelope (DOPE) - A cost-effective strategy of insuring an investment portfolio

Popular ways of hedging downside risk of a stock portfolio is by means of a constant proportion portfolio insurance (CPPI) strategy or by means of an options-based portfolio insurance strategy (OBPI). However both have drawbacks in terms of practical applicability given transaction costs. Moreover they are not useful in times of very low liquidity e.g. in a market crash. Here we shall first review the common portfolio insurance techniques and then posit an alternative approach using a zero-coupon bond to extract downside coverage to the extent desired by an investor. While the posited strategy will not guarantee full downside protection for the entire investment horizon, it is unaffected by transaction costs resulting from need to periodically reallocate funds and is a lot easier to implement practically compared to options-based strategies. Unlike CPPI and OBPI, it will work in a crash situation too.

Tax incentives for foreign direct investment part II : Design considerations

Part I of this article concluded that tax incentives for foreign direct investment (FDI) have become increasingly common over the past 10 years or so, especially among developing countries, and that there is substantial evidence to support the proposition that tax considerations now play an important role in many investment decisions. Countries seeking to attract FDI often feel compelled to offer tax inducements that are at least as attractive as those offered by their neighbours or competitors. Countries do so at a cost, however, and that cost may be substantial. Governments are thus placed in a dilemma - can they afford to cut taxes in order to attract investment, and can they afford not to? The second part of this article assumes that countries, and especially most developing countries, will continue to feel obliged to provide tax incentives. The aim of this part therefore is to examine ways in which those incentives can be made more effective and more efficient, thereby reducing their cost to the host country.

Tax incentives for foreign direct investment part I : Recent trends and countertrends

According to the conventional wisdom, tax incentives for investment - in particular for foreign direct investment (FDI) - are not recommended. That is the view held almost universally by theorists and by the international bodies that advise on tax matters.' Tax incentives are bad in theory and bad in practice. They are bad in theory principally because they cause distortions: investment decisions are made that would not have been made without the inducement of special tax concessions. They are bad in practice, being both ineffective and inefficient. They are ineffective in that tax considerations are only rarely a major determinant in FDI decisions; they are inefficient because their cost, in terms of tax revenue foregone, often far exceeds any benefits they may produce. Other criticisms are also frequently levelled against tax incentives for FDI - they are inequitable (since they benefit some investors but not others), they are difficult to administer and open to abuse, and they lack transparency. Thus, it is not surprising that ''the standard advice given by institutions like the World Bank and the lMF to developing countries is to refrain from offering tax incentives to foreign investors".2 The purpose of this article is not to question that advice or to challenge the conventional wisdom - except in one respect. Recent evidence does suggest that tax considerations are an increasingly important factor in investment decisions and that special tax incentives have become substantially more effective as instruments for attracting FDI than they were 10 or 20 years ago.3 The first part of this article, published here, examines some of that evidence, reviews some recent trends in national policies towards FDI, attempts to suggest why investment incentives have become more important and more effective, and looks at the pressures that are exerted on governments, especially in developing countries, to compete for FDI by offering special incentives. The second part of the article, to be published in the Bulletin next month, assumes that many countries will continue to offer tax incentives to investors regardless of the best advice, and considers how incentives might be designed in order to increase their effectiveness and efficiency.

An analysis of factors influencing waste minimisation and use of recycled materials for the construction of residential buildings

Residential building construction activities, whether it is new build, repair or maintenance, consumes a large amount of natural resources. This has a negative impact on the environment in the form depleting natural resources, increasing waste production and pollution. Previous research has identified the benefits of preventing or reducing material waste, mainly in terms of the limited available space for waste disposal, and escalating costs associated with landfills, waste management and disposal and their impact on a  building company's profitability. There has however been little development internationally of innovative waste management strategies aimed at reducing the resource requirement of the construction process. The authors contend that embodied energy is a useful indicator of resource value. Using data provided by a regional high-volume residential builder in the State of Victoria, Australia, this paper identifies the various types of waste that are generated from the construction of a typical standard house. It was found that in this particular case, wasted amounts of materials were less than those found previously by others for cases in capital cities (5-10 per cent), suggesting that waste minimisation strategies are successfully being implemented. Cost and embodied energy savings from using materials with recycled content are potentially more beneficial in terms of embodied energy and resource depletion than waste minimisation strategies.

Why invest in a national public health program for stroke? An example using Australian data to estimate the potential benefits and cost implications

Objectives: Stroke is the world’s second leading cause of death in people aged over 60 years. Approximately 50,000 strokes occur annually in Australia with numbers predicted to increase by about one third over 10-years. Our objectives were to assess the economic implications of a public health program for stroke by: (1) predicting what potential health-gains and cost-offsets could be achieved; and (2) determining the net level of annual investment that would offer value-for-money.

Methods: Lifetime costs and outcomes were calculated for additional cases that would benefit if ‘current practice’ was feasibly improved, estimated for one indicative year using: (i) local epidemiological data, coverage rates and costs; and (ii) pooled effect sizes from systematic reviews.

Interventions: blood pressure lowering; warfarin for atrial fibrillation; increased access to stroke units; intravenous thrombolysis and aspirin for ischemic events; and carotid endarterectomy. Value-for-money threshold: AUD$30,000/DALY recovered.

Results: Improved, prevention and management could prevent about 27,000 (38%) strokes in 2015. In present terms (2004), about 85,000 DALYs and AUD$1.06 billion in lifetime cost-offsets could be recovered. The net level of annual warranted investment was AUD$3.63 billion.

Conclusions: Primary prevention, in particular blood pressure lowering, was most effective. A public health program for stroke
is warranted

Is privatisation good for investment in Australia?

Privatisation was expected to promote investment in the economy as part of improving dynamic efficiency. The relation between aggregate public and private investment in Australia is investigated in an endogeneous ECM framework. Model selection for a simple investment function allows restrictions for neoclassical crowding out or Keynesian crowding in (after Aschauer 1989) in a small open economy. An ECM is estimated including annual aggregate private investment, public investment, income, rate of return, average interest cost, exchange rate and inventories from 1960 to 2005. Public capital appears unresponsive to shocks and crowding out is not evident.

Cost-effectiveness of adult circumcision in a resource-rich setting for HIV prevention among men who have sex with men

Background.  We examined the effects and cost‐effectiveness of 4 strategies of circumcision in a resource‐rich setting (Australia) in a population of men who have sex with men (MSM).

Method.  We created a dynamic mathematical transmission model and performed an economic analysis to estimate the costs, outcomes, and cost‐effectiveness of different strategies, compared with those of the status quo. Strategies included circumcision of all MSM at age 18 years, circumcision of all MSM aged 35–44 years, circumcision of all insertive MSM aged 18 years, and circumcision of all MSM aged 18 years . All costs are reported in US dollars, with a cost‐effectiveness threshold of $42,000 per quality‐adjusted life‐year.

Results.  We find that 2%–5% of human immunodeficiency virus (HIV) infections would be averted per year, with initial costs ranging from $3.6 million to $95.1 million, depending on the strategy. The number of circumcisions needed to prevent 1 HIV infection would range from 118 through 338. Circumcision of predominately insertive MSM would save $21.7 million over 25 years with a $62.2 million investment. Strategies to circumcise 100% of all MSM and to circumcise MSM aged 35–44 years would be cost‐effective; the latter would require a smaller investment. The least cost‐effective approach is circumcision of young MSM close to their sexual debut. Results are very sensitive to assumptions about the cost of circumcision, the efficacy of circumcision, sexual preferences, and behavioral disinhibition.

Conclusions.  Circumcision of adult MSM may be cost‐effective in this resource‐rich setting. However, the intervention costs are high relative to the costs spent on other HIV prevention programs.

Explaining organizational investment in CRM point solutions

This paper asks why organisations invest in non-integrated CRM point solutions when many of the benefits of enterprise systems are claimed to be due to integration of processes and information. This paper identifies six factors that explain why organisations invest in CRM point solutions: reduced risk; lower cost; quick benefits realization; low integration ability, low interdependence of business units, and high business-unit differentiation. The evidence suggests that when interdependence between parts of an organization is low, possibly due to one unit producing a clearly differentiated product, the attractions of lower risk, lower cost, and/or faster access to the benefits are likely to induce organizations to adopt CRM point solutions. The contribution of this study is that it recognizes that, and explains why, it is not always optimal for organizations to adopt integrated CRM solutions.

Integrated modelling of cost-effective siting and operation of flow-control infrastructure for river ecosystem conservation

Wetland and floodplain ecosystems along many regulated rivers are highly stressed, primarily due to a lack of environmental flows of appropriate magnitude, frequency, duration, and timing to support ecological functions. In the absence of increased environmental flows, the ecological health of river ecosystems can be enhanced by the operation of existing and new flow-control infrastructure (weirs and regulators) to return more natural environmental flow regimes to specific areas. However, determining the optimal investment and operation strategies over time is a complex task due to several factors including the multiple environmental values attached to wetlands, spatial and temporal heterogeneity and dependencies, nonlinearity, and time-dependent decisions. This makes for a very large number of decision variables over a long planning horizon. The focus of this paper is the development of a nonlinear integer programming model that accommodates these complexities. The mathematical objective aims to return the natural flow regime of key components of river ecosystems in terms of flood timing, flood duration, and interflood period. We applied a 2-stage recursive heuristic using tabu search to solve the model and tested it on the entire South Australian River Murray floodplain. We conclude that modern meta-heuristics can be used to solve the very complex nonlinear problems with spatial and temporal dependencies typical of environmental flow allocation in regulated river ecosystems. The model has been used to inform the investment in, and operation of, flow-control infrastructure in the South Australian River Murray.

The cost-effectiveness of universal newborn screening for bilateral permanent congenital hearing impairment : systematic review

Objective - Universal newborn hearing screening for bilateral permanent congenital hearing impairment is standard practice in many developed economies, but until there is clear evidence of cost-effectiveness, it remains a controversial use of limited health care resources. We conducted a formal systematic review of studies of newborn hearing screening that considered both costs and outcomes to produce a summary of the available evidence and to determine whether there was a need for further research.

Methods - A search was conducted of medical and nursing databases and gray literature websites by the use of multiple keywords. The titles and abstracts of studies were examined for preliminary inclusion if reference was made to newborn hearing screening, and to both costs and outcomes. Studies of potential relevance were independently assessed by 2 health economists for final inclusion in the review. Studies that met inclusion criteria were appraised by the use of existing guidelines for observational studies, economic evaluations and decision analytic models, and reported in a narrative literature review.

Results - There were 22 distinct observational or modeled evaluations of which only 2 clearly compared universal newborn hearing screening to risk factor screening for bilateral permanent congenital hearing impairment. Of these, the single evaluation that examined long-term costs and outcomes found that universal newborn hearing screening could be cost-saving if early intervention led to a substantial reduction in future treatment costs and productivity losses.

Conclusions - There are only a small number of economic evaluations that have examined the long-term cost-effectiveness of universal newborn hearing screening. This is partly attributable to ongoing uncertainty about the benefits gained from the early detection and treatment of bilateral permanent congenital hearing impairment. There is a clear need for further research on long-term costs and outcomes to establish the cost-effectiveness of universal newborn hearing screening in relation to other approaches to screening, and to establish whether it is a good long term investment.

The impact of a suicide prevention strategy on reducing the economic cost of suicide in the New South Wales construction industry

BACKGROUND: Little research has been conducted into the cost and prevention of self-harm in the workplace. AIMS: To quantify the economic cost of self-harm and suicide among New South Wales (NSW) construction industry (CI) workers and to examine the potential economic impact of implementing Mates in Construction (MIC). METHOD: Direct and indirect costs were estimated. Effectiveness was measured using the relative risk ratio (RRR). In Queensland (QLD), relative suicide risks were estimated for 5-year periods before and after the commencement of MIC. For NSW, the difference between the expected (i.e., using NSW pre-MIC [2008-2012] suicide risk) and counterfactual suicide cases (i.e., applying QLD RRR) provided an estimate of potential suicide cases averted in the post-MIC period (2013-2017). Results were adjusted using the average uptake (i.e., 9.4%) of MIC activities in QLD. Economic savings from averted cases were compared with the cost of implementing MIC. RESULTS: The cost of self-harm and suicide in the NSW CI was AU $527 million in 2010. MIC could potentially avert 0.4 suicides, 1.01 full incapacity cases, and 4.92 short absences, generating annual savings of AU $3.66 million. For every AU $1 invested, the economic return is approximately AU $4.6. CONCLUSION: MIC represents a positive economic investment in workplace safety.