Analytical Framework for Examining the Value of Antibacterial Products. 4.2.6 Total Product Life


As for drugs, we use 20 years to characterize the average life cycle of a new vaccine upon market approval (DiMasi, Grabowski, & Vernon, 2004).  Though the span of time over which a vaccine is used may extend beyond this 20-year period, expected revenues from sales in years beyond 20 contribute very little to private ENPV due to discounting, and the model allows the user to vary this parameter for what-if scenario analysis if needed.

It should be noted that the threat of generic competition which we took into consideration for new drug products is virtually nonexistent for vaccines in the United States.  Barriers to generic entry include the lack of an abbreviated application process for biologics such as exists for generic drugs (thus generic entrants would have to undergo the same costly steps of demonstrating safety and efficacy as a vaccine originator would), small markets, and the proprietary nature of some vaccine strains.  However, vaccine products may still be superseded in the market by newer, more effective products (Danzon, Pereira, & Tejwani, 2005).

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