Optimal Intertemporal Curative Drug Expenses: The Case of Hepatitis C in France

Pierre Dubois and Thierry Magnac

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Abstract: We study intertemporal tradeoffs that health authorities face when considering the control of an epidemic using innovative curative medical treatments. We set up a dynamically controlled susceptible–infected–recovered (SIR) model for an epidemic in which patients can be asymptomatic, and we analyze the optimality conditions of the sequence of cure expenses decided by health authorities at the onset of the drug innovation process. We show that analytical conclusions are ambiguous because of their dependence on parameter values. As an application, we focus on the case study of hepatitis C, the treatment for which underwent a major upheaval when curative drugs were introduced in 2014. We calibrate our controlled SIR model using French data and simulate optimal policies. We show that the optimal policy entails some front loading of the intertemporal budget. The analysis demonstrates how beneficial intertemporal budgeting can be compared to non-forward-looking constant budget allocation.

Keywords: Pharmaceuticals; SIR model; Controlled epidemic dynamics; Optimal intertemporal policies; Hepatitis C (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-hea
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Published in Journal of Health Economics, 2024, 94, pp.102861. ⟨10.1016/j.jhealeco.2024.102861⟩

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Journal Article: Optimal intertemporal curative drug expenses: The case of hepatitis C in France (2024)
Working Paper: Optimal Intertemporal Curative Drug Expenses: The Case of Hepatitis C in France (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04501256

DOI: 10.1016/j.jhealeco.2024.102861

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