Working Paper

Optimal Sequencing of Antiretroviral Drug Cocktails under Uncertainty and Irreversibility


  • Bezabih
  • M.
  • Stolpe
  • M.
Publication Date

This paper develops a real options approach to the optimal sequencing of antiretroviral drug cocktails for HIV/AIDS patients in resource-poor settings. The analysis focuses on the implications of endogenous resistance mutations in the virus that reduce or eliminate the effectiveness of individual drugs within a cocktail when lack of laboratory equipment prevents these from being identified. Using a model with two drug cocktails, we show that the first-line therapy should be introduced later than in the case without resistance mutations and that the second-line therapy should be introduced earlier. We go on to discuss implications for comparative cost-effectiveness analyses.

Kiel Institute Expert


JEL Classification
D81, H51, I12

Key Words

  • Combination therapy
  • Cost-effectiveness analysis
  • developing countries
  • Entwicklungsländer
  • Kosten-Effektivität-Analyse
  • Real option theory