Vaccine supply decisions and government interventions for recurring epidemics

For infectious diseases that occurs recurringly or periodically, e.g., influenza, humans have tried to develop vaccines to effectively prevent infection. However, vaccination coverage, which is the most effective way to prevent infections, is undesirably low. Existing epidemiology studies have consistently shown that there is association between the vaccination decisions in different flu seasons (epidemic periods), but related research in operations management mainly focuses on the single-period model. In this paper we construct a multi-period vaccine demand model to study multi-period vaccine supply decisions and government interventions. We consider that members of the public make vaccination decisions at the beginning of an epidemic period, given the information of the last epidemic period. Both the manufacturer and government make multi-period decisions in our model. The vaccination coverage is determined by the minimum between the supply and demand for the vaccine. We derive the multi-period profit-maximizing coverage and compare it with the socially optimal coverage. In addition, we show that, besides supply uncertainty, vaccine demand may decrease or increase with the vaccination coverage in the last epidemic period, depending on the vaccine effectiveness. Furthermore, the coverage convergence depends on the vaccine effectiveness and infection loss distribution. Accordingly, the multi-period profit-maximizing coverage and government intervention depend on the vaccine effectiveness and coverage convergence. We also conduct numerical studies to generate practical implications of the analytical findings. Our results provide management insights on vaccine supply decisions, government interventions, and vaccination coverage.