Competitive Dynamics in Pharmaceutical Markets: A Case Study in the Chronic Cardiac Disease Market

  • M. Kunc
  • R. Kazakov
Part of the OR Essentials book series (ORESS)


A modelling project involved system dynamics simulation of chronic cardiac disease in Bulgaria, examining the dynamic behaviour of a cardiac drug molecule in the market. The system dynamics model was calibrated using market data sourced from the Bulgarian National Health Care Fund, the Bulgarian Generic Pharmaceutical Association and a market research firm. The main results of the study showed that the timing of access to market was a critical driver in reducing prices and providing wider, as well as more affordable, access for patients to medicinal therapy. Our findings indicate that healthcare authorities may obtain savings while, at the same time, they may provide conditions for more patients to be treated depending on the timing of access to market of new generic drugs.


Developing countries System dynamics Health service Practice of OR Pharmaceutical markets Drug policy 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Arrow KJ (1963). Uncertainty and the welfare economics of medical care. America Economic Review 53(5): 951–954.Google Scholar
  2. Birch S, Kephart G, Tomblin-Murphy G, O’Brien-Pallas L, Alder R and MacKenzie A (2007). Human resources planning and the production of health: A needs-based analytical framework. Canadian Public Policy 33(Supplement 1): S1–S16.CrossRefGoogle Scholar
  3. Cooper K, Davies R, Raftery J and Roderick P (2008). Use of a coronary heart disease simulation model to evaluate the costs and effectiveness of drugs for the prevention of heart disease. Journal of the Operational Research Society 59(9): 1173–1181.CrossRefGoogle Scholar
  4. Dangerfield BC, Fang Y and Roberts C (2001). Model-based scenarios for the epidemiology of HIV/AIDS: The consequences of highly active antiretroviral therapy. System Dynamics Review 17(2): 119–150.CrossRefGoogle Scholar
  5. EC Pharmaceutical Forum Report. (2008). Working group on pricing and reimbursement., accessed December 2011.
  6. EGA Report. (2009). How to increase patient access to generic medicines in European healthcare systems. update.pdf
  7. Folland, S., Goodman, A. and Stano, M. (2004). The Economics of Health and Health Care. New Jersey: Pearson Education, pp. 187–225.Google Scholar
  8. Generics Bulletin. (2011). Issues 5 August 2011 and 24 January 2011
  9. Hirsch, G. (2004). Modeling the consequences of major incidents for health care systems. 22nd International Conference of the System Dynamics Society. Oxford, England, 25–29 July.Google Scholar
  10. Hirsch, G., & Immediato, C.S. (1998). Design of simulators to enhance learning: Examples from a health care microworld. International System Dynamics Conference. Quebec City, July.Google Scholar
  11. Hirsch, G. and Immediato, C. S. (1999). Microworlds and generic structures as resources for integrating care and improving health. System Dynamics Review 15(3): 16–25.CrossRefGoogle Scholar
  12. Hirsch, G., Homer, J., McDonnell, G., & Milstein, B. (2005). Achieving health care reform in the United States: Toward a whole-system understanding. 23rd International Conference of the System Dynamics Society. Boston, USA.Google Scholar
  13. Hoard, M., Homer, J., Manley, W., Furbee, P., Haque, A., & Helmkamp, J. (2005). Systems modeling in support of evidence- based disaster planning for rural areas. International Journal of Hygiene and Environmental Health 208(6): 117–125.CrossRefGoogle Scholar
  14. Homer J & Hirsch GB (2006). System dynamics modeling for public health: Background and opportunities. American Journal of Public Health 96(3): 452–458.CrossRefGoogle Scholar
  15. Homer, J., & Milstein, B. (2004). Optimal decision making in a dynamic model of poor community health. 37th Hawaii International Conference on System Science. Big Island, HI, 5–8 January.Google Scholar
  16. Homer J, Hirsch G, Minniti M and Pierson M (2004a). Models for collaboration: How system dynamics helped a community organize cost-effective care for chronic illness. System Dynamics Review 20(3): 199–222.CrossRefGoogle Scholar
  17. Homer, J., Jones, A., Seville, D., Essien, J., Milstein, B., & Murphy, D. (2004b). The CDC diabetes system modeling project: Developing a new tool for chronic disease prevention and control. 22nd International Conference of the System Dynamics Society. Oxford, England, 25–29 July.Google Scholar
  18. IMS Health Report. (2010). Generic Medicines: Essential contributors to the Long-term health of society. Sector sustainability challenges in Europe.
  19. Jones AP, Homer JB, Murphy DL, Essien JDK, Milstein B and Seville DA (2006). Understanding diabetes population dynamics through simulation modeling and experimentation. American Journal of Public Health 96(3): 488–494.CrossRefGoogle Scholar
  20. Katsaliaki K and Mustafee N (2011). Applications of simulation within the healthcare context. Journal of the Operational Research Society 62(8): 1431–1451.CrossRefGoogle Scholar
  21. Kazakov R (2007a). Pricing and reimbursement policies in new EU accession countries. Journal of Generic Medicines 4(4): 249–258.CrossRefGoogle Scholar
  22. Kazakov R (2007b). Between strategy and change: Reformulating the medicines industry in an enlarged Europe. Journal of Medical Marketing 7(3): 245–253.CrossRefGoogle Scholar
  23. Kunc MH and Morecroft JD (2007). System dynamics modeling for strategic development. In F. O’Brien & R. Dyson (Eds.), Supporting strategy: Frameworks, methods and models. Chichester, UK: Wiley.Google Scholar
  24. Lane D, Monefeldt C and Rosenhead JV (2000). Looking in the wrong place for healthcare improvements: A system dynamics study of an accident and emergency department. Journal of the Operational Research Society 51(5): 518–531.CrossRefGoogle Scholar
  25. McDonnell, G., Heffernan, M., & Faulkner, A. (2004). Using system dynamics to analyse health system performance within the WHO framework. 22nd International Conference of the System Dynamics Society. Oxford, England, 25–29 July.Google Scholar
  26. McIntyre D, Thiede M and Birch S (2009). Access as a policy-relevant concept in low- and middle-income countries. Health Economics, Policy and Law 4(2): 179–193.CrossRefGoogle Scholar
  27. Milstein, B. (2008). Hygeia’s constellation: Navigating health futures in a dynamic and democratic world. The Center for Disease Control and Prevention. Syndemics Prevention Network, Archived version available at, accessed 25 January 2013
  28. Morecroft J (2007). Strategic Modelling and Business Dynamics: A Feedback Systems Approach. John Wiley and Sons: England. Google Scholar
  29. Murphy, G., et al. (2009). Tested solutions for eliminating Canada’s registered nurse shortage. Canadian Nurses Association, accessed 13 June 2012.
  30. Roberts C and Dangerfield B (1990). Modelling the epidemiological consequences of HIV infection and AIDS: A contribution from operational research. Journal of the Operational Research Society 41(4): 273–289.CrossRefGoogle Scholar
  31. Roberts EB, Homer J, Kasabian A and Varrel M (1982). A systems view of the smoking problem: Perspective and limitations of the role of science in decision-making. International Journal of Biomedical Computing 13(1): 69–86.CrossRefGoogle Scholar
  32. Sterman JD (2000). Business dynamics. Systems thinking and modelling for a complex world. New York: McGraw-Hill.Google Scholar
  33. Stiglitz G (2003). Information and the change in the paradigm in economics. American Economist 47(2): 15–16.CrossRefGoogle Scholar
  34. Stiglitz JE and Jayadev A (2010). Medicine for tomorrow: Some alternative proposals to promote socially beneficial research and development in pharmaceuticals. Journal of Generic Medicines 7(3): 217–226.CrossRefGoogle Scholar
  35. Tengs TO, Osgood ND and Chen LL (2001). The cost-effectiveness of intensive national school-based anti-tobacco education: Results from the tobacco policy model. Preventive Medicine 33(6): 558–570.CrossRefGoogle Scholar
  36. Wolstenholme, E. F. (1996). A management flight simulator for community care. In S. Cropper & P. Forte (Eds.), Enhancing Decision Making in the NHS. Milton Keynes, UK: Open University Press.Google Scholar
  37. Wolstenholme EF (1999). A patient flow perspective of UK health services: Exploring the case for new ‘intermediate care’ initiatives. System Dynamics Review 15(3): 253–271.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • M. Kunc
    • 1
  • R. Kazakov
    • 2
  1. 1.Warwick Business School, University of WarwickCoventryUK
  2. 2.BG PharmASofiaBulgaria

Personalised recommendations