Essays on Competition in the Pharmaceutical Industry

Chapter 1: Patents and Entry Competition in the Pharmaceutical Industry: The Role of Marketing Exclusivity Effective patent length for innovation drugs is severely curtailed because of extensive efficacy and safety tests required for FDA approval, raising concern over adequacy of incentives for new drug development. The Hatch-Waxman Act extends patent length for new drugs by five years, but also promotes generic entry by simplifying approval procedures and granting 180-day marketing exclusivity to a first generic entrant before the patent expires. In this paper we present a dynamic model to examine the effect of marketing exclusivity. We find that marketing exclusivity may be redundant and its removal may increase generic firms' profits and social welfare. Chapter 2: Why Authorized Generics?: Theoretical and Empirical Investigations Facing generic competition, the brand-name companies some-times launch generic versions themselves called authorized generics. This practice is puzzling. If it is cannibalization, it cannot be profitable. If it is divisionalization, it should be practiced always instead of sometimes. I explain this phenomenon in terms of switching costs in a model in which the incumbent first develops a customer base to ready itself against generic competition later. I show that only sufficiently low switching costs or large market size justifies launch of AGs. I then use prescription drug data to test those results and find support. Chapter 3: The Merger Paradox and R&D Oligopoly theory says that merger is unprofitable, unless a majority of firms in industry merge. Here, we introduce R&D opportunities to resolve this so-called merger paradox. We have three results. First, when there is one R&D firm, that firm can profitably merge with any number of non-R&D firms. Second, with multiple R&D firms and multiple non-R&D firms, all R&D firms can profitably merge. Third, with two R&D firms and two non-R&D firms, each R&D firms prefer to merge with a non-R&D firm. With three or more than non-R&D firms, however, the R&D firms prefer to merge with each other.

Essays on competition in the pharmaceutical industry

Chapter 1: Patents and Entry Competition in the Pharmaceutical Industry: The Role of Marketing Exclusivity. Effective patent length for innovation drugs is severely curtailed because of extensive efficacy and safety tests required for FDA approval, raising concern over adequacy of incentives for new drug development. The Hatch-Waxman Act extends patent length for new drugs by five years, but also promotes generic entry by simplifying approval procedures and granting 180-day marketing exclusivity to a first generic entrant before the patent expires. In this paper we present a dynamic model to examine the effect of marketing exclusivity. We find that marketing exclusivity may be redundant and its removal may increase generic firms' profits and social welfare. ^ Chapter 2: Why Authorized Generics?: Theoretical and Empirical Investigations Facing generic competition, the brand-name companies some-times launch generic versions themselves called authorized generics. This practice is puzzling. If it is cannibalization, it cannot be profitable. If it is divisionalization, it should be practiced always instead of sometimes. I explain this phenomenon in terms of switching costs in a model in which the incumbent first develops a customer base to ready itself against generic competition later. I show that only sufficiently low switching costs or large market size justifies launch of AGs. I then use prescription drug data to test those results and find support. ^ Chapter 3: The Merger Paradox and R&D Oligopoly theory says that merger is unprofitable, unless a majority of firms in industry merge. Here, we introduce R&D opportunities to resolve this so-called merger paradox. We have three results. First, when there is one R&D firm, that firm can profitably merge with any number of non-R&D firms. Second, with multiple R&D firms and multiple non-R&D firms, all R&D firms can profitably merge. Third, with two R&D firms and two non-R&D firms, each R&D firms prefer to merge with a non-R&D firm. With three or more than non-R&D firms, however, the R&D firms prefer to merge with each other.^

Efficient asynchronous scheduling algorithms for cost-effective buffered crossbar switches

Buffered crossbar switches have recently attracted considerable attention as the next generation of high speed interconnects. They are a special type of crossbar switches with an exclusive buffer at each crosspoint of the crossbar. They demonstrate unique advantages over traditional unbuffered crossbar switches, such as high throughput, low latency, and asynchronous packet scheduling. However, since crosspoint buffers are expensive on-chip memories, it is desired that each crosspoint has only a small buffer. This dissertation proposes a series of practical algorithms and techniques for efficient packet scheduling for buffered crossbar switches. To reduce the hardware cost of such switches and make them scalable, we considered partially buffered crossbars, whose crosspoint buffers can be of an arbitrarily small size. Firstly, we introduced a hybrid scheme called Packet-mode Asynchronous Scheduling Algorithm (PASA) to schedule best effort traffic. PASA combines the features of both distributed and centralized scheduling algorithms and can directly handle variable length packets without Segmentation And Reassembly (SAR). We showed by theoretical analysis that it achieves 100% throughput for any admissible traffic in a crossbar with a speedup of two. Moreover, outputs in PASA have a large probability to avoid the more time-consuming centralized scheduling process, and thus make fast scheduling decisions. Secondly, we proposed the Fair Asynchronous Segment Scheduling (FASS) algorithm to handle guaranteed performance traffic with explicit flow rates. FASS reduces the crosspoint buffer size by dividing packets into shorter segments before transmission. It also provides tight constant performance guarantees by emulating the ideal Generalized Processor Sharing (GPS) model. Furthermore, FASS requires no speedup for the crossbar, lowering the hardware cost and improving the switch capacity. Thirdly, we presented a bandwidth allocation scheme called Queue Length Proportional (QLP) to apply FASS to best effort traffic. QLP dynamically obtains a feasible bandwidth allocation matrix based on the queue length information, and thus assists the crossbar switch to be more work-conserving. The feasibility and stability of QLP were proved, no matter whether the traffic distribution is uniform or non-uniform. Hence, based on bandwidth allocation of QLP, FASS can also achieve 100% throughput for best effort traffic in a crossbar without speedup.

Pressure ulcers and nutritional deficits in elderly long-term care patients: Effects of a comprehensive nutritional program on pressure ulcer healing, length of hospital stay and charges to patients

The elderly are at the highest risk of developing pressure ulcers that result in prolonged hospitalization, high health care costs, increased mortality, and decreased quality of life. The burden of pressure ulcers will intensify because of a rapidly increasing elderly population in the United States (US). Poor nutrition is a major predictor of pressure ulcer formation. The purpose of this study was to examine the effects of a comprehensive, interdisciplinary nutritional protocol on: (1) pressure ulcer wound healing (2) length of hospital stays, and (3) charges for pressure ulcer management. Using a pre-intervention/post intervention quasi-experimental design the study sample was composed of 100 patients 60 years or older, admitted with or acquiring a pressure ulcer. A pre-intervention group (n= 50) received routine pressure ulcer care (standard diet, dressing changes, and equipment). A post-intervention group received routine care plus an interdisciplinary nutrition intervention (physical therapy, speech therapy, occupational therapy, added protein and calories to the diet). Research questions were analyzed using descriptive statistics, frequencies, Chi-Square Tests, and T-tests. Findings indicated that the comprehensive, interdisciplinary nutritional protocol had a significant effect on the rate of wound healing in Week3 and Week4, total hospital length of stay (pre-intervention M= 43.2 days, SD=31.70 versus M=31.77, SID-12.02 post-intervention), and pressure ulcer length of stay (pre-intervention 25.28 days, SD5.60 versus 18.40 days, SD 5.27 post-intervention). Although there was no significant difference in total charges for the pre-intervention group ($727,245.00) compared to the post-intervention group ($702,065.00), charges for speech (m=$5885.12, SD=$332.55), pre albumin (m=$808.52,SD= $332.55), and albumin($278 .88, SD=55.00) were higher in the pre-intervention group and charges for PT ($5721.26, SD$3655.24) and OT($2544 .64, SD=1712.863) were higher in the post-intervention group. Study findings indicate that this comprehensive nutritional intervention was effective in improving pressure ulcer wound healing, decreasing both hospital length of stay for treatment of pressure ulcer and total hospital length of stay while showing no significant additional charges for treatment of pressure ulcers.

Development of effective approaches to the large-scale aerodynamic testing of low-rise buildings

Low-rise buildings are often subjected to high wind loads during hurricanes that lead to severe damage and cause water intrusion. It is therefore important to estimate accurate wind pressures for design purposes to reduce losses. Wind loads on low-rise buildings can differ significantly depending upon the laboratory in which they were measured. The differences are due in large part to inadequate simulations of the low-frequency content of atmospheric velocity fluctuations in the laboratory and to the small scale of the models used for the measurements. A new partial turbulence simulation methodology was developed for simulating the effect of low-frequency flow fluctuations on low-rise buildings more effectively from the point of view of testing accuracy and repeatability than is currently the case. The methodology was validated by comparing aerodynamic pressure data for building models obtained in the open-jet 12-Fan Wall of Wind (WOW) facility against their counterparts in a boundary-layer wind tunnel. Field measurements of pressures on Texas Tech University building and Silsoe building were also used for validation purposes. The tests in partial simulation are freed of integral length scale constraints, meaning that model length scales in such testing are only limited by blockage considerations. Thus the partial simulation methodology can be used to produce aerodynamic data for low-rise buildings by using large-scale models in wind tunnels and WOW-like facilities. This is a major advantage, because large-scale models allow for accurate modeling of architectural details, testing at higher Reynolds number, using greater spatial resolution of the pressure taps in high pressure zones, and assessing the performance of aerodynamic devices to reduce wind effects. The technique eliminates a major cause of discrepancies among measurements conducted in different laboratories and can help to standardize flow simulations for testing residential homes as well as significantly improving testing accuracy and repeatability. Partial turbulence simulation was used in the WOW to determine the performance of discontinuous perforated parapets in mitigating roof pressures. The comparisons of pressures with and without parapets showed significant reductions in pressure coefficients in the zones with high suctions. This demonstrated the potential of such aerodynamic add-on devices to reduce uplift forces.

Pressure ulcers and nutritional deficits in elderly long-term care patients : effects of a comprehensive nutritional program on pressure ulcer healing, length of hospital stay and charges to patients

The elderly are at the highest risk of developing pressure ulcers that result in prolonged hospitalization, high health care costs, increased mortality, and decreased quality of life. The burden of pressure ulcers will intensify because of a rapidly increasing elderly population in the United States (US). Poor nutrition is a major predictor of pressure ulcer formation. The purpose of this study was to examine the effects of a comprehensive, interdisciplinary nutritional protocol on: 1) pressure ulcer wound healing 2) length of hospital stays, and 3) charges for pressure ulcer management. Using a pre-intervention/post intervention quasi-experimental design the study sample was composed of 100 patients 60 years or older, admitted with or acquiring a pressure ulcer. A pre-intervention group (n= 50) received routine pressure ulcer care (standard diet, dressing changes, and equipment). A post-intervention group received routine care plus an interdisciplinary nutrition intervention (physical therapy, speech therapy, occupational therapy, added protein and calories to the diet). Research questions were analyzed using descriptive statistics, frequencies, Chi-Square Tests, and T-tests. Findings indicated that the comprehensive, interdisciplinary nutritional protocol had a significant effect on the rate of wound healing in Week3 and Week4, total hospital length of stay (pre-intervention M= 43.2 days, SD=31.70 versus M=31.77, SD=12.02 post-intervention), and pressure ulcer length of stay (pre-intervention 25.28 days, SD5.60 versus 18.40 days, SD 5.27 post-intervention). Although there was no significant difference in total charges for the pre-intervention group ($727,245.00) compared to the post-intervention group ($702,065.00), charges for speech (m=$5885.12, SD=$332.55), pre albumin (m=$808.52,SD= $332.55), and albumin($278 .88, SD=55.00) were higher in the pre-intervention group and charges for PT ($5721.26, SD$3655.24) and OT($2544 .64, SD=1712.863) were higher in the post-intervention group. Study findings indicate that this comprehensive nutritional intervention was effective in improving pressure ulcer wound healing, decreasing both hospital length of stay for treatment of pressure ulcer and total hospital length of stay while showing no significant additional charges for treatment of pressure ulcers.