Influenza vaccine contracts in developing nations—Coordination, flexibility, and vaccine coverage

Abstract

We study different contract mechanisms between a vaccine manufacturer (VM) and a vaccine procurement agency (VPA) to coordinate the two-peak influenza vaccine supply chain. Motivated by the prevalent industry contracts, we study two hybrid contracts under budget constraints, which allow flexibility in deciding the contractual parameters between the VM and the VPA. We consider the case of both private (for-profit) and public (not-for-profit) VPA and the impact of different objectives, such as profit and vaccine coverage, on contract choice. We show that for public VPAs or for private VPAs with low available budget, both hybrid contracts are equally preferred by VM and VPA. However, under high budget, the preferences of VPA and VM will differ. We then extend our models to consider the case of both private and public VPA coexisting in the market under both budget and vaccine availability constraints. Contrary to intuition, we find that the vaccine coverage provided by the public VPA is not always higher than the vaccine coverage provided by the private VPA, with the private VPA providing greater vaccine coverage under conditions of low budget and low vaccine availability. Our findings have important policy implications for governments of emerging economies with limited budget for mass vaccination programs.