Adverse Selection, Credit, and Efficiency: the Case of the Missing Market

We analyze a standard environment of adverse selection in credit markets. In our envi- ronment, entrepreneurs who are privately informed about the quality of their projects need to borrow from banks. As is generally the case in economies with adverse selection, the competitive equilibrium of our economy is shown to be ine¢ cient. Under adverse selection, the choices made by one type of agents limit what can be o¤ered to other types in an incentive-compatible manner. This gives rise to an externality, which cannot be internalized in a competitive equilibrium. We show that, in this type of environment, the ine¢ ciency associated to adverse selection is the consequence of one implicit assumption: entrepreneurs can only borrow from banks. If an additional market is added (say, a .security market.), in which entrepreneurs can obtain funds beyond those o¤ered by banks, we show that the e¢ cient allocation is an equilibrium of the economy. In such an equilibrium, all entrepreneurs borrow at a pooling rate in the security market. When they apply to bank loans, though, only entrepreneurs with good projects pledge these additional funds as collateral. This equilibrium thus simultaneously entails cross- subsidization and separation between di¤erent types of entrepreneurs.

Adverse selection, credit, and efficiency: the case of the missing market

We analyze a standard environment of adverse selection in credit markets. In our environment, entrepreneurs who are privately informed about the quality of their projects need to borrow in order to invest. Conventional wisdom says that, in this class of economies, the competitive equilibrium is typically inefficient. We show that this conventional wisdom rests on one implicit assumption: entrepreneurs can only access monitored lending. If a new set of markets is added to provide entrepreneurs with additional funds, efficiency can be attained in equilibrium. An important characteristic of these additional markets is that lending in them must be unmonitored, in the sense that it does not condition total borrowing or investment by entrepreneurs. This makes it possible to attain efficiency by pooling all entrepreneurs in the new markets while separating them in the markets for monitored loans.

Clinical consequences of imatinib plasma concentrations variability in hemato-oncologic patients

Background: Imatinib has revolutionized the treatment of chronic myeloid leukemia (CML) and gastrointestinal stromal tumors (GIST). Considering the large inter-individual differences in the function of the systems involved in its disposition, exposure to imatinib can be expected to vary widely among patients. This observational study aimed at describing imatinib pharmacokinetic variability and its relationship with various biological covariates, especially plasma alpha1-acid glycoprotein (AGP), and at exploring the concentration-response relationship in patients. Methods: A population pharmacokinetic model (NONMEM) including 321 plasma samples from 59 patients was built up and used to derive individual post-hoc Bayesian estimates of drug exposure (AUC; area under curve). Associations between AUC and therapeutic response or tolerability were explored by ordered logistic regression. Influence of the target genotype (i.e. KIT mutation profile) on response was also assessed in GIST patients. Results: A one-compartment model with first-order absorption appropriately described the data, with an average oral clearance of 14.3 L/h (CL) and volume of distribution of 347 L (Vd). A large inter-individual variability remained unexplained, both on CL (36%) and Vd (63%), but AGP levels proved to have a marked impact on total imatinib disposition. Moreover, both total and free AUC correlated with the occurrence and number of side effects (e.g. OR 2.9±0.6 for a 2-fold free AUC increase; p<0.001). Furthermore, in GIST patients, higher free AUC predicted a higher probability of therapeutic response (OR 1.9±0.5; p<0.05), notably in patients with tumor harboring an exon 9 mutation or wild-type KIT, known to decrease tumor sensitivity towards imatinib. Conclusion: The large pharmacokinetic variability, associated to the pharmacokinetic-pharmacodynamic relationship uncovered are arguments to further investigate the usefulness of individualizing imatinib prescription based on TDM. For this type of drug, it should ideally take into consideration either circulating AGP concentrations or free drug levels, as well as KIT genotype for GIST.

Population pharmacokinetics of ganciclovir in solid-organ transplant recipients receiving oral valganciclovir.

Valganciclovir (VGC) is an oral prodrug of ganciclovir (GCV) recently introduced for prophylaxis and treatment of cytomegalovirus infection. Optimal concentration exposure for effective and safe VGC therapy would require either reproducible VGC absorption and GCV disposition or dosage adjustment based on therapeutic drug monitoring (TDM). We examined GCV population pharmacokinetics in solid organ transplant recipients receiving oral VGC, including the influence of clinical factors, the magnitude of variability, and its impact on efficacy and tolerability. Nonlinear mixed effect model (NONMEM) analysis was performed on plasma samples from 65 transplant recipients under VGC prophylaxis or treatment. A two-compartment model with first-order absorption appropriately described the data. Systemic clearance was markedly influenced by the glomerular filtration rate (GFR), patient gender, and graft type (clearance/GFR = 1.7 in kidney, 0.9 in heart, and 1.2 in lung and liver recipients) with interpatient and interoccasion variabilities of 26 and 12%, respectively. Body weight and sex influenced central volume of distribution (V(1) = 0.34 liter/kg in males and 0.27 liter/kg in females [20% interpatient variability]). No significant drug interaction was detected. The good prophylactic efficacy and tolerability of VGC precluded the demonstration of any relationship with GCV concentrations. In conclusion, this analysis highlights the importance of thorough adjustment of VGC dosage to renal function and body weight. Considering the good predictability and reproducibility of the GCV profile after treatment with oral VGC, routine TDM does not appear to be clinically indicated in solid-organ transplant recipients. However, GCV plasma measurement may still be helpful in specific clinical situations.