Pharmaceutical Generics, Vertical Product Differentiation, and Public Policy

This paper studies oligopolistic competition in off-patent pharmaceutical markets using a vertical product differentiation model. This model can explain the observation that countries with stronger regulations have smaller generic market shares. It can also explain the differences in observed regulatory regimes. Stronger regulation may be due to a higher proportion of production that is done by foreign firms. Finally, a closely related model can account for the observed increase in prices by patent owners after entry of generic producers.

Financial Markets and Real Ecinomy: Four Essays in International Trade

Financial markets play an important role in an economy performing various functions like mobilizing and pooling savings, producing information about investment opportunities, screening and monitoring investments, implementation of corporate governance, diversification and management of risk. These functions influence saving rates, investment decisions, technological innovation and, therefore, have important implications for welfare. In my PhD dissertation I examine the interplay of financial and product markets by looking at different channels through which financial markets may influence an economy.My dissertation consists of four chapters. The first chapter is a co-authored work with Martin Strieborny, a PhD student from the University of Lausanne. The second chapter is a co-authored work with Melise Jaud, a PhD student from the Paris School of Economics. The third chapter is co-authored with both Melise Jaud and Martin Strieborny. The last chapter of my PhD dissertation is a single author paper.Chapter 1 of my PhD thesis analyzes the effect of financial development on growth of contract intensive industries. These industries intensively use intermediate inputs that neither can be sold on organized exchange, nor are reference-priced (Levchenko, 2007; Nunn, 2007). A typical example of a contract intensive industry would be an industry where an upstream supplier has to make investments in order to customize a product for needs of a downstream buyer. After the investment is made and the product is adjusted, the buyer may refuse to meet a commitment and trigger ex post renegotiation. Since the product is customized to the buyer's needs, the supplier cannot sell the product to a different buyer at the original price. This is referred in the literature as the holdup problem. As a consequence, the individually rational suppliers will underinvest into relationship-specific assets, hurting the downstream firms with negative consequences for aggregate growth. The standard way to mitigate the hold up problem is to write a binding contract and to rely on the legal enforcement by the state. However, even the most effective contract enforcement might fail to protect the supplier in tough times when the buyer lacks a reliable source of external financing. This suggests the potential role of financial intermediaries, banks in particular, in mitigating the incomplete contract problem. First, financial products like letters of credit and letters of guarantee can substantially decrease a risk and transaction costs of parties. Second, a bank loan can serve as a signal about a buyer's true financial situation, an upstream firm will be more willing undertake relationship-specific investment knowing that the business partner is creditworthy and will abstain from myopic behavior (Fama, 1985; von Thadden, 1995). Therefore, a well-developed financial (especially banking) system should disproportionately benefit contract intensive industries.The empirical test confirms this hypothesis. Indeed, contract intensive industries seem to grow faster in countries with a well developed financial system. Furthermore, this effect comes from a more developed banking sector rather than from a deeper stock market. These results are reaffirmed examining the effect of US bank deregulation on the growth of contract intensive industries in different states. Beyond an overall pro-growth effect, the bank deregulation seems to disproportionately benefit the industries requiring relationship-specific investments from their suppliers.Chapter 2 of my PhD focuses on the role of the financial sector in promoting exports of developing countries. In particular, it investigates how credit constraints affect the ability of firms operating in agri-food sectors of developing countries to keep exporting to foreign markets.Trade in high-value agri-food products from developing countries has expanded enormously over the last two decades offering opportunities for development. However, trade in agri-food is governed by a growing array of standards. Sanitary and Phytosanitary standards (SPS) and technical regulations impose additional sunk, fixed and operating costs along the firms' export life. Such costs may be detrimental to firms' survival, "pricing out" producers that cannot comply. The existence of these costs suggests a potential role of credit constraints in shaping the duration of trade relationships on foreign markets. A well-developed financial system provides the funds to exporters necessary to adjust production processes in order to meet quality and quantity requirements in foreign markets and to maintain long-standing trade relationships. The products with higher needs for financing should benefit the most from a well functioning financial system. This differential effect calls for a difference-in-difference approach initially proposed by Rajan and Zingales (1998). As a proxy for demand for financing of agri-food products, the sanitary risk index developed by Jaud et al. (2009) is used. The empirical literature on standards and norms show high costs of compliance, both variable and fixed, for high-value food products (Garcia-Martinez and Poole, 2004; Maskus et al., 2005). The sanitary risk index reflects the propensity of products to fail health and safety controls on the European Union (EU) market. Given the high costs of compliance, the sanitary risk index captures the demand for external financing to comply with such regulations.The prediction is empirically tested examining the export survival of different agri-food products from firms operating in Ghana, Mali, Malawi, Senegal and Tanzania. The results suggest that agri-food products that require more financing to keep up with food safety regulation of the destination market, indeed sustain longer in foreign market, when they are exported from countries with better developed financial markets.Chapter 3 analyzes the link between financial markets and efficiency of resource allocation in an economy. Producing and exporting products inconsistent with a country's factor endowments constitutes a serious misallocation of funds, which undermines competitiveness of the economy and inhibits its long term growth. In this chapter, inefficient exporting patterns are analyzed through the lens of the agency theories from the corporate finance literature. Managers may pursue projects with negative net present values because their perquisites or even their job might depend on them. Exporting activities are particularly prone to this problem. Business related to foreign markets involves both high levels of additional spending and strong incentives for managers to overinvest. Rational managers might have incentives to push for exports that use country's scarce factors which is suboptimal from a social point of view. Export subsidies might further skew the incentives towards inefficient exporting. Management can divert the export subsidies into investments promoting inefficient exporting.Corporate finance literature stresses the disciplining role of outside debt in counteracting the internal pressures to divert such "free cash flow" into unprofitable investments. Managers can lose both their reputation and the control of "their" firm if the unpaid external debt triggers a bankruptcy procedure. The threat of possible failure to satisfy debt service payments pushes the managers toward an efficient use of available resources (Jensen, 1986; Stulz, 1990; Hart and Moore, 1995). The main sources of debt financing in the most countries are banks. The disciplining role of banks might be especially important in the countries suffering from insufficient judicial quality. Banks, in pursuing their rights, rely on comparatively simple legal interventions that can be implemented even by mediocre courts. In addition to their disciplining role, banks can promote efficient exporting patterns in a more direct way by relaxing credit constraints of producers, through screening, identifying and investing in the most profitable investment projects. Therefore, a well-developed domestic financial system, and particular banking system, would help to push a country's exports towards products congruent with its comparative advantage.This prediction is tested looking at the survival of different product categories exported to US market. Products are identified according to the Euclidian distance between their revealed factor intensity and the country's factor endowments. The results suggest that products suffering from a comparative disadvantage (labour-intensive products from capital-abundant countries) survive less on the competitive US market. This pattern is stronger if the exporting country has a well-developed banking system. Thus, a strong banking sector promotes exports consistent with a country comparative advantage.Chapter 4 of my PhD thesis further examines the role of financial markets in fostering efficient resource allocation in an economy. In particular, the allocative efficiency hypothesis is investigated in the context of equity market liberalization.Many empirical studies document a positive and significant effect of financial liberalization on growth (Levchenko et al. 2009; Quinn and Toyoda 2009; Bekaert et al., 2005). However, the decrease in the cost of capital and the associated growth in investment appears rather modest in comparison to the large GDP growth effect (Bekaert and Harvey, 2005; Henry, 2000, 2003). Therefore, financial liberalization may have a positive impact on growth through its effect on the allocation of funds across firms and sectors.Free access to international capital markets allows the largest and most profitable domestic firms to borrow funds in foreign markets (Rajan and Zingales, 2003). As domestic banks loose some of their best clients, they reoptimize their lending practices seeking new clients among small and younger industrial firms. These firms are likely to be more risky than large and established companies. Screening of customers becomes prevalent as the return to screening rises. Banks, ceteris paribus, tend to focus on firms operating in comparative-advantage sectors because they are better risks. Firms in comparative-disadvantage sectors finding it harder to finance their entry into or survival in export markets either exit or refrain from entering export markets. On aggregate, one should therefore expect to see less entry, more exit, and shorter survival on export markets in those sectors after financial liberalization.The paper investigates the effect of financial liberalization on a country's export pattern by comparing the dynamics of entry and exit of different products in a country export portfolio before and after financial liberalization.The results suggest that products that lie far from the country's comparative advantage set tend to disappear relatively faster from the country's export portfolio following the liberalization of financial markets. In other words, financial liberalization tends to rebalance the composition of a country's export portfolio towards the products that intensively use the economy's abundant factors.

A New Model for Designing a Product Line Using TURF Analysis

This paper introduces the approach of using TURF analysis to design a product line through a binary linear programming model. This improves the efficiency of the search for the solution to the problem compared to the algorithms that have been used to date. Furthermore, the proposed technique enables the model to be improved in order to overcome the main drawbacks presented by TURF analysis in practice.

Toll-like receptor 2 (TLR2) polymorphisms are associated with reversal reaction in leprosy.

BACKGROUND: Leprosy is characterized by a spectrum of clinical manifestations that depend on the type of immune response against the pathogen. Patients may undergo immunological changes known as "reactional states" (reversal reaction and erythema nodosum leprosum) that result in major clinical deterioration. The goal of the present study was to assess the effect of Toll-like receptor 2 (TLR2) polymorphisms on susceptibility to and clinical presentation of leprosy. METHODS: Three polymorphisms in TLR2 (597C-->T, 1350T-->C, and a microsatellite marker) were analyzed in 431 Ethiopian patients with leprosy and 187 control subjects. The polymorphism-associated risk of developing leprosy, lepromatous (vs. tuberculoid) leprosy, and leprosy reactions was assessed by multivariate logistic regression models. RESULTS: The microsatellite and the 597C-->T polymorphisms both influenced susceptibility to reversal reaction. Although the 597T allele had a protective effect (odds ratio [OR], 0.34 [95% confidence interval {CI}, 0.17-0.68]; P= .002 under the dominant model), homozygosity for the 280-bp allelic length of the microsatellite strongly increased the risk of reversal reaction (OR, 5.83 [95% CI, 1.98-17.15]; P= .001 under the recessive model). These associations were consistent among 3 different ethnic groups. CONCLUSIONS: These data suggest a significant role for TLR-2 in the occurrence of leprosy reversal reaction and provide new insights into the immunogenetics of the disease.

Discounting Spotted Apples: Investigating Consumers’ Willingness to Accept Cosmetic Damage in an Organic Product, November 2006

Organic producers have limited methods of avoiding plant diseases that result in cosmetic damage to produce. Therefore, the appearance of organic produce is often less than perfect. We use an experimental auction to investigate how cosmetic damage affects consumers’ willingness to pay for organic apples. We find that 75% of the participants are willing to pay more for organic than for conventional apples given identical appearance. However, at the first sight of any imperfection in the appearance of the organic apples, this segment is significantly reduced. Furthermore, we find that there is a significant effect of interaction between cosmetic damage and product methods. Even though most consumers say they buy organic products to avoid pesticides, we find that cosmetic damage has a larger impact on the willingness to pay for organic apples than for conventional apples.

Virus-like particles induce robust human T-helper cell responses.

Among synthetic vaccines, virus-like particles (VLPs) are used for their ability to induce strong humoral responses. Very little is reported on VLP-based-vaccine-induced CD4(+) T-cell responses, despite the requirement of helper T cells for antibody isotype switching. Further knowledge on helper T cells is also needed for optimization of CD8(+) T-cell vaccination. Here, we analysed human CD4(+) T-cell responses to vaccination with MelQbG10, which is a Qβ-VLP covalently linked to a long peptide derived from the melanoma self-antigen Melan-A. In all analysed patients, we found strong antibody responses of mainly IgG1 and IgG3 isotypes, and concomitant Th1-biased CD4(+) T-cell responses specific for Qβ. Although less strong, comparable B- and CD4(+) T-cell responses were also found specific for the Melan-A cargo peptide. Further optimization is required to shift the response more towards the cargo peptide. Nevertheless, the data demonstrate the high potential of VLPs for inducing humoral and cellular immune responses by mounting powerful CD4(+) T-cell help.

GLUTAMATE RECEPTOR-LIKE genes mediate leaf-to-leaf wound signalling.

Wounded leaves communicate their damage status to one another through a poorly understood process of long-distance signalling. This stimulates the distal production of jasmonates, potent regulators of defence responses. Using non-invasive electrodes we mapped surface potential changes in Arabidopsis thaliana after wounding leaf eight and found that membrane depolarizations correlated with jasmonate signalling domains in undamaged leaves. Furthermore, current injection elicited jasmonoyl-isoleucine accumulation, resulting in a transcriptome enriched in RNAs encoding key jasmonate signalling regulators. From among 34 screened membrane protein mutant lines, mutations in several clade 3 GLUTAMATE RECEPTOR-LIKE genes (GLRs 3.2, 3.3 and 3.6) attenuated wound-induced surface potential changes. Jasmonate-response gene expression in leaves distal to wounds was reduced in a glr3.3 glr3.6 double mutant. This work provides a genetic basis for investigating mechanisms of long-distance wound signalling in plants and indicates that plant genes related to those important for synaptic activity in animals function in organ-to-organ wound signalling.

Polymorphisms in Toll-like receptor 4 (TLR4) are associated with protection against leprosy.

Accumulating evidence suggests that polymorphisms in Toll-like receptors (TLRs) influence the pathogenesis of mycobacterial infections, including leprosy, a disease whose manifestations depend on host immune responses. Polymorphisms in TLR2 are associated with an increased risk of reversal reaction, but not susceptibility to leprosy itself. We examined whether polymorphisms in TLR4 are associated with susceptibility to leprosy in a cohort of 441 Ethiopian leprosy patients and 197 healthy controls. We found that two single nucleotide polymorphisms (SNPs) in TLR4 (896G>A [D299G] and 1196C>T [T399I]) were associated with a protective effect against the disease. The 896GG, GA and AA genotypes were found in 91.7, 7.8 and 0.5% of leprosy cases versus 79.9, 19.1 and 1.0% of controls, respectively (odds ratio [OR] = 0.34, 95% confidence interval [CI] 0.20-0.57, P < 0.001, additive model). Similarly, the 1196CC, CT and TT genotypes were found in 98.1, 1.9 and 0% of leprosy cases versus 91.8, 7.7 and 0.5% of controls, respectively (OR = 0.16, 95% CI 0.06--.40, P < 0.001, dominant model). We found that Mycobacterium leprae stimulation of monocytes partially inhibited their subsequent response to lipopolysaccharide (LPS) stimulation. Our data suggest that TLR4 polymorphisms are associated with susceptibility to leprosy and that this effect may be mediated at the cellular level by the modulation of TLR4 signalling by M. leprae.

Lupus-like syndrome associated with statin therapy.

Statins are among the most widely prescribed drugs. An increasing number of lupus-like syndrome has recently been reported with these lipid-lowering agents. We describe a new case associated with simvastatin therapy. The presence of anti-dsDNA antibodies in the serum is for the first time reported confirming that statins may also induce a systemic autoimmune reaction. Statin-induced lupus-like syndrome is characterized by the long delay between the beginning of therapy and the skin eruption. Antinuclear antibodies may persist for many months after drug discontinuation. The causal relationship may be therefore difficult to establish, and probably many cases are unrecognized. Early diagnosis may avoid unnecessary immunosuppressive therapy.

Toll-like receptor agonists synergize with CD40L to induce either proliferation or plasma cell differentiation of mouse B cells.

In a classical dogma, pathogens are sensed (via recognition of Pathogen Associated Molecular Patterns (PAMPs)) by innate immune cells that in turn activate adaptive immune cells. However, recent data showed that TLRs (Toll Like Receptors), the most characterized class of Pattern Recognition Receptors, are also expressed by adaptive immune B cells. B cells play an important role in protective immunity essentially by differentiating into antibody-secreting cells (ASC). This differentiation requires at least two signals: the recognition of an antigen by the B cell specific receptor (BCR) and a T cell co-stimulatory signal provided mainly by CD154/CD40L acting on CD40. In order to better understand interactions of innate and adaptive B cell stimulatory signals, we evaluated the outcome of combinations of TLRs, BCR and/or CD40 stimulation. For this purpose, mouse spleen B cells were activated with synthetic TLR agonists, recombinant mouse CD40L and agonist anti-BCR antibodies. As expected, TLR agonists induced mouse B cell proliferation and activation or differentiation into ASC. Interestingly, addition of CD40 signal to TLR agonists stimulated either B cell proliferation and activation (TLR3, TLR4, and TLR9) or differentiation into ASC (TLR1/2, TLR2/6, TLR4 and TLR7). Addition of a BCR signal to CD40L and either TLR3 or TLR9 agonists did not induce differentiation into ASC, which could be interpreted as an entrance into the memory pathway. In conclusion, our results suggest that PAMPs synergize with signals from adaptive immunity to regulate B lymphocyte fate during humoral immune response.

Network revenue management with product-specific no-shows

Revenue management practices often include overbooking capacity to account for customerswho make reservations but do not show up. In this paper, we consider the network revenuemanagement problem with no-shows and overbooking, where the show-up probabilities are specificto each product. No-show rates differ significantly by product (for instance, each itinerary andfare combination for an airline) as sale restrictions and the demand characteristics vary byproduct. However, models that consider no-show rates by each individual product are difficultto handle as the state-space in dynamic programming formulations (or the variable space inapproximations) increases significantly. In this paper, we propose a randomized linear program tojointly make the capacity control and overbooking decisions with product-specific no-shows. Weestablish that our formulation gives an upper bound on the optimal expected total profit andour upper bound is tighter than a deterministic linear programming upper bound that appearsin the existing literature. Furthermore, we show that our upper bound is asymptotically tightin a regime where the leg capacities and the expected demand is scaled linearly with the samerate. We also describe how the randomized linear program can be used to obtain a bid price controlpolicy. Computational experiments indicate that our approach is quite fast, able to scale to industrialproblems and can provide significant improvements over standard benchmarks.

Impact of biocontrol strain Pseudomonas fluorescens CHA0 on rhizosphere bacteria isolated from barley (Hordeum vulgare L.) with special reference to Cytophaga-like bacteria.

AIMS: To assess the impact of the biocontrol strain Pseudomonas fluorescens CHA0 on a collection of barley rhizosphere bacteria using an agar plate inhibition assay and a plant microcosm, focusing on a CHA0-sensitive member of the Cytophaga-like bacteria (CLB). METHODS AND RESULTS: The effect of strain CHA0 on a collection of barley rhizosphere bacteria, in particular CLB and fluorescent pseudomonads sampled during a growth season, was assessed by a growth inhibition assay. On average, 85% of the bacteria were sensitive in the May sample, while the effect was reduced to around 68% in the July and August samples. In the May sample, around 95% of the CLB and around 45% of the fluorescent pseudomonads were sensitive to strain CHA0. The proportion of CHA0-sensitive CLB and fluorescent pseudomonad isolates decreased during the plant growth season, i.e. in the July and August samples. A particularly sensitive CLB isolate, CLB23, was selected, exposed to strain CHA0 (wild type) and its genetically modified derivatives in the rhizosphere of barley grown in gnotobiotic soil microcosms. Two dry-stress periods were imposed during the experiment. Derivatives of strain CHA0 included antibiotic or exopolysaccharide (EPS) overproducing strains and a dry-stress-sensitive mutant. Despite their inhibitory activity against CLB23 in vitro, neither wild-type strain CHA0, nor any of its derivatives, had a major effect on culturable and total cell numbers of CLB23 during the 23-day microcosm experiment. Populations of all inoculants declined during the two dry-stress periods, with soil water contents below 5% and plants reaching the wilting point, but they recovered after re-wetting the soil. Survival of the dry-stress-sensitive mutant of CHA0 was most affected by the dry periods; however, this did not result in an increased population density of CLB23. CONCLUSIONS: CLB comprise a large fraction of barley rhizosphere bacteria that are sensitive to the biocontrol pseudomonad CHA0 in vitro. However, in plant microcosm experiments with varying soil humidity conditions, CHA0 or its derivatives had no major impact on the survival of the highly sensitive CLB strain, CLB23, during two dry-stress periods and a re-wetting period; all co-existed well in the rhizosphere of barley plants. SIGNIFICANCE AND IMPACT OF THE STUDY: Results indicate a lack of interaction between the biocontrol pseudomonad CHA0 and a sensitive CLB when the complexity increases from agar plate assays to plant microcosm experiments. This suggests the occurrence of low levels of antibiotic production and/or that the two bacterial genera occupy different niches in the rhizosphere.

Improving Transition Outcomes: MyTransitionIowa.org Resource Mapping Product

Information about Improving Transition Outcomes statewide resource mapping product.

Après votre arrêt cardiaque, vous prendrez bien un peu d'élixir de (sur)vie [After your heart arrest, would you like to test a medicinal elixir?].

So far, cardiac arrest is still associated with high mortality or severe neurological disability in survivors. At the tissue level, cardiac arrest results into an acute condition of generalized hypoxia. A better understanding of the pathophysiology of ischemia-reperfusion and of the inflammatory response that develops after cardiac arrest could help to design novel therapeutic strategies in the future. It seems unlikely that a single drug, acting as a <magic bullet>, might be able to improve survival or neurological prognosis. Lessons learned from pathophysiological mechanisms rather indicate that combined therapies, involving thrombolysis, neuroprotective agents, antioxidants and anti-inflammatory molecules, together with temperature cooling, might represent helpful strategies to improve patient's outcome after cardiac arrest.