The Covid-19 Vaccine Cold Chain

On September 18, 2020 my article, "Keeping coronavirus vaccines at subzero temperatures during distribution will be hard, but likely key to ending pandemic," was published in The Conversation. I believed that it was imperative (and my Editors at The Conversation agreed) to start speaking to a broad audience on the necessity and importance of the cold chain to the effective distribution of the Covid-19 vaccines that are presently under development by major pharmaceutical firms.  There was much discussion and coverage in the press about the manufacturing aspects of the different vaccines as well as the R&D involved. However, there was very little being discussed about the distribution issues.  It was imperative to me  that emphasis (and associated challenges) on getting the approved vaccines ultimately from point A (manufacturing) to point B (point of administering of the vaccine), with the quality preserved in the transportation and distribution process, be brought to everyone's attention.

I have conducted research on perishable product supply chains from food to pharmaceuticals and even co-authored a book on the topic.

There are now 4 major Covid-19 vaccines that are far along in the trial phases and this is quite promising, with the Moderna and Pfizer vaccines requiring storage below freezing (Pfizer's to the extreme temp of -94 F) with those of Astrazeneca's and John & Johnson's needing to be in the range of 2-8 degrees C, which is standard for many vaccines. 

I have published multiple articles in The Conversation, but this one generated the greatest number of comments and even emails to me from around the globe, which continue. Clearly, the article that I wrote had touched on a very important issue, and I am also grateful that the article got reprinted in multiple media outlets.

Since the publication of my article, much has happened, and the momentum keeps on growing.

I had the pleasure of being interviewed by David Williams and John Driscoll for their Care Talk podcast, the link to which is below. 

 

Lori Hinnant, who is an Associated Press journalist, based in Paris, subsequently interviewed me for a fabulous article, "Vaccine storage issues could leave 3B without access."  My colleague at the Carey School of Business at Johns Hopkins, Tinglong Dai, was also interviewed for this article, which has been reprinted internationally in numerous outlets and also published in The Washington Post and ABCNews.

I have had additional interviews with journalists at The Wall Street Journal and am quoted in the article, "Covid-19 vaccines to be stored secretly under tight security," by Jared S. Hopkins on the security of the distribution of the vaccine. There is a slightly modified title in the hard copy version - a colleague kindly delivered his copy to my door!

I've done research with collaborators on freight security of highly value cargo and clearly the Covid-19 vaccines fall into this category!

And, on November 6, I will be featured on the NPR show The Pulse, based on an interview on the vaccine cold chain conducted by Alan Yu.

One of the goals of my Conversation article was to make the cold chain distribution issues more visible in order that appropriate preparedness measures would be taken, both nationally and globally, so that, once vaccines are approved, time is not wasted and the vaccines do not go to waste as well.

Many thanks to all those who have responded, including the amazing journalists, who continue to keep this important topic in the news!

And, just before publishing this blogpost, I received another inquiry from a journalist requesting an interview because of my article in The Conversation!

Do You Know Where Your Meds and Other Products Came From - Information Asymmetry in Quality

I am excited about speaking at the upcoming  Learning and Intelligent Optimization (LION 8)  Conference in Gainesville, Florida later this month, especially since the snow is again falling in Massachusetts with more to come!

I am also excited because this will be the first time that I will be presenting the paper, "Equilibria and Dynamics of Supply Chain Network Competition with Information Asymmetry in Quality and Minimum Quality Standards," joint with one of my doctoral students, Dong "Michelle" Li.

Quality of products, especially those that one ingests, from pharmaceuticals to food and even, in a sense, human blood (and I am not talking about vampires here), is a topic of great concern and one that we have been researching for a while now.


Do you know where your medicines, for example,  are coming from?
 

As we noted in our earlier paper,  Pharmaceutical Supply Chain Networks with Outsourcing Under Price and Quality Competition, Anna Nagurney, Dong Li, and Ladimer S. Nagurney, International Transactions in Operational Research 20(6): (2013) pp 859-888, up to 40% of the drugs that Americans take are now imported, and more than 80% of the active ingredients for drugs sold in the United States are outsourced, often to countries such as India and China. The problem is that there may not be sufficient oversight and lack of quality standards.


Furthermore, the manufacturing of products, including pharmaceuticals, may take place in multiple manufacturing plants, so one may have no idea as to the place of production or the level of quaality!


In our new paper, which focuses on quality competition under information asymmetry, we were inspired by the work of the Nobel laureate George Akerlof and his classical paper 1970 paper (which got rejected 3 times by journals, before it finally got accepted and for which he earned the Nobel prize):  "The market for `lemons': Quality uncertainty and the market mechanism," Quarterly Journal of Economics, 84(3), 488-500. Akerlof shared the Nobel with Professor Joseph Stiglitz and Michael Spence.

In our paper, we construct a  supply chain network model with information asymmetry in product quality. The competing, profit-maximizing firms with, possibly,  multiple manufacturing plants, which may be located on-shore or off-shore, are aware of the quality of the product that they produce but consumers, at the demand markets, only know the average quality. Such a framework is relevant to products ranging from certain foods to pharmaceuticals. We propose both an equilibrium model and its dynamic counterpart and demonstrate how minimum quality standards can be incorporated. Qualitative results as well as an algorithm are presented, along with convergence results. The numerical examples, accompanied by sensitivity analysis, reveal interesting results and insights for firms, consumers, as well as policy-makers, who impose the minimum quality standards.

Specifically, we find from the computations the following.  Since consumers at the demand market do not differentiate between the products from different firms, and there is information asymmetry in quality between the firms (sellers) and the consumers (buyers) at the demand market, the average quality level at the demand market, as well as the price, which is determined by the quality levels of both firms, is for both firms' products. Firms  prefer a higher average quality, since, at the same demand level, a higher average quality results in a higher price of the product.

However, once a firm increases its own quality level, of course, the average quality level and, hence, the price  increases, but its total cost will also increase due to the higher quality. Furthermore, the price increase is not only for the firm's own product, but also for its competitor's product. If a firm increases its own quality, both the firm and its competitor would get the benefits of the price increase, but only the firm itself would pay for the quality improvement. Thus, a firm prefers a “free ride,” that is, it prefers that the other firm improve its product quality and, hence, the price, rather than have it increase its own quality.

Consequently, a firm may not be willing to increase its quality levels, while the other firm is, unless it is beneficial both cost-wise and profit-wise. This explains why, as the minimum quality standard of one firm increases, its competitor's quality level increases slightly or  remains the same.

When there is an enforced higher minimum quality standard imposed on a firm's plant(s), the firm is forced to achieve a higher quality level, which may bring its own profit down but raise the competitor's profit, even though the latter firm may actually  face a lower minimum quality standard. When the minimum quality standard of a firm increases to a very high value, but that of its competitor is low, the former firm will not be able to afford the high associated cost with decreasing profit, and, hence, it will produce no product for the demand market and will be forced to leave the market.

The above results and discussion indicate the same result, but in a much more general supply chain network context, as found in Ronnen (1991), who, in speaking about minimum quality standards,   noted that: ``low-quality sellers can be better off ... and high-quality sellers are worse off." Also the computational results support the statement on page 490 in Akerlof (1970) that ``good cars may be driven out of the market by lemons." Moreover, our results also show that the lower the competitor's quality level, the more harmful the competitor is to the firm with the high minimum quality standard. The implications of the sensitivity analysis for policy-makers are clear -- the imposition of a one-sided quality standard can have a negative impact on the firm in one's region (or country). Moreover, policy-makers, who are concerned about the products at particular demand markets,  should prevent firms located in regions with very low minimum quality standards from entering the market; otherwise, they may not only bring the average quality level at the demand market(s) down and hurt the consumers, but such products may also harm the profits of the other firms with much higher quality levels and even drive them out of the market.

Therefore, it would be beneficial and fair for both firms and consumers if the policy-makers at the same or different regions or even countries could impose the same or at least similar minimum quality standards on plants serving the same demand market(s). In addition, the minimum quality standards should be such that they will not negatively impact either the high quality firms' survival or the  consumers at the demand market(s).

Should Pharmaceutical Production be Outsourced -- Competing on Quality

With the 2013 INFORMS Healthcare Conference in full swing in Chicago, I thought it appropriate to highlight some recent research on quality competition and the outsourcing of the production of pharmaceuticals (medicines).

Medicines are essential to healing and, hence, their quality is paramount to health.

I have written on healthcare supply chains on this blog on multiple occasions from the broken humanitarian healthcare supply chain to medical nuclear supply chains to advanced analytics for pharmaceutical supply chains.  Our book, Networks Against Time: Supply Chain Analytics for Perishable Products, published by Springer in 2013, contains several chapters focused on healthcare supply chains.

And, my most recent PhD student at the Isenberg School of Management, in Management Science,  Amir H. Masoumi, successfully defended his dissertation entitled Supply Chain Management  of Perishable Products with Applications to Healthcare, so clearly there is also great interest in healthcare applications among our students. My interest in healthcare supply chains, grew in part, because of the work with Amir, beginning with blood supply chains, which was a special interest of his.

Professor Hari Balasubramanian, who is the Program Chair of the 2013 INFORMS Healthcare Conference, was on Amir's doctoral dissertation committee.

Most recently, we have been researching quality competition, beginning with the paper, A Dynamic Network Oligopoly Model with Transportation Costs, Product Differentiation, and Quality Competition, Anna Nagurney and Dong Li, which is in press in the journal, Computational Economics.

Given the importance of healthcare and pharmaceuticals, as well as the growth in the outsourcing of pharma production globally, along with numerous issues raised in terms of quality, it was important to investigate how math modeling could contribute to issues of quality, reputation, outsourcing, and competition.

Our paper, Pharmaceutical Supply Chain Networks with Outsourcing Under Price and Quality Competition,
Anna Nagurney, Dong Li, and Ladimer S. Nagurney, is now in press in the journal, International Transactions in Operational Research. This paper quantifies the effects of quality levels on a firm's reputation and develops a game theory model of outsourcing for a pharmaceutical firm. We developed both a static version (at the equilibrium state) and a dynamic version to illustrate how the quantity and quality levels evolve over time. We utilized variational inequality theory for the former and projected dynamical systems for the latter.

Math modeling, operations research (O.R.), and analytics are contributing tremendously to the understanding of healthcare issues in our society. Doing Good  with Good O.R. continues as a theme of our profession.

Supernetwork Center Associates will be at the POMS Conference in Chicago

The POMS (Production and Operations Management Society)  Annual Conference takes place next week in Chicago, Illinois, April 20-23, 2012.

The theme of this year's conference is Socially Responsible Operations.


The Virtual Center for Supernetworks Center Associates will be well-represented at this conference,

Below is a list of the papers that members of our team will be presenting:

Supply chain network design of a sustainable blood banking system (A. Nagurney and  A. H. Masoumi),

A supply chain network oligopoly model for pharmaceuticals under brand differentiation andperishability  (A. H. Masoumi, M. Yu, and A. Nagurney),

The influence of technical, market and legislative factors of e-waste flows (F. Toyasaki, T. Wakolbinger, A. Nagurney,  and T. Nowak),

Multiproduct humanitarian healthcare supply chains: A network modeling and computationalframework (A. Nagurney, M. Yu, and Q. Qiang),

Global supply chain network competition under exchange rate uncertainty (Z. Liu).

Also, my doctoral student, Amir H. Masoumi, will be taking part in the POMS Doctoral Student Colloquium and Zugang Liu will be taking part in the Emerging Scholars Program. Amir will also be at the mini-conference on Humanitarian Operations and Crisis Management next Thursday in Chicago.


I am sure that the Chicago POMS Conference will be a great success.

Medical Operations Research and More

What an amazing week it has been!

Last Friday, at UMass Amherst, several of my colleagues and I from the Isenberg School spoke at a Risk Management and Optimization Workshop, as part of a new funded project that we are researching through the UMass Innovation Institute. My presentation was on Networks, Performance Assessment, and Vulnerability Analysis, and, given the recent power outages in Boston, which affected even the Prudential Center, it was certainly timely.

Then, last Saturday, I flew to Gothenburg, Sweden, where I have been appointed a Visiting Professor. I just gave my fourth presentation since arriving at the School of Business, Economics and Law at the University of Gothenburg.

My presentation today was part of the Finance Seminar Series and I spoke on Financial Networks and Disruption Management. The audience was terrific and included faculty, postdocs, doctoral students, and even an Associate Dean, who I mistook for a student.

Next Tuesday, I will be giving a talk at the Chalmers University of Technology, which is also located in Gothenburg, Sweden.

According to the announcement, which is now posted, I will be speaking on Medical Operations Research. I think that the title got changed as the electrons crossed the Atlantic Ocean, but I do like it. The title of my presentation, however, is actually: Perishable Product Supply Chains in Health Care: Models, Analysis, and Computations.

In one week, and on opposite sides of the Atlantic, I will have given 5 talks and the one at Chalmers will make it 6. I am enjoying the questions and discussions tremendously.

Global Healthcare Supply Chains and Good Job News

I have been writing in this blog about our latest research on supply chain network design for critical needs products from vaccines to medicines and on hospital supply chains.

I was delighted to read in the Boston Globe that Sanofi-Aventis, one of the world's largest drug makers, is expanding its operations in Massachusetts and that this will mean more jobs -- jobs of importance and meaning.

According to the article: Sanofi-Aventis SA, is planning a $65 million expansion in Cambridge that will create about 300 jobs, making it the latest foreign pharmaceutical giant to invest in Massachusetts. The Paris-based drug maker is in the process of leasing space in Cambridgeport, where it will establish a joint headquarters for a new cancer division.

As you may recall (what a feeling of deja vu) last summer, at this time, the world was battling the H1N1 virus from Argentina (coincidentally, my most recent international trip in the summer of 2010) to China to the United States.

Sanofi-Aventis was one of only a handful of H1N1 vaccine producers and, given the low number of vaccine manufacturers, and the various challenges with the production of this vaccine, my research group began a study on multiproduct supply chain network design with applications to healthcare. Clearly, with fixed capacities, some of the vaccine producers had to switch from production of the annual flu vaccine to the challenging H1N1 vaccine.

We are pleased that the study has resulted in a paper/report, "Multiproduct Supply Chain Network Design with Applications to Healthcare," which, given the timeliness of the topic, we are making available to our readers through the Virtual Center for Supernetworks. The research allows pharmaceutical firms to redesign their supply chains in an optimal way to enable the cost-minimizing production of multiple vaccines and medicines with demand satisfaction.

Research at Business Schools is increasingly focusing not only on how wealth can be created but also how it can be done in a socially responsible way.