I’ve had this idea for awhile on how to use the notion of an exchange to deal with drug pricing. I wrote a white paper on the subject.
What I’ve now done is constructed an Exchange Simulator for generic medicines: see below. Have a look and let me know. This is Gen 1 with a focus on generic medicines.
I’m already working on Gen 2 to handle branded medicines and Gen 3 so for payers to hedge using forward market pricing.
The whole idea is simplicity with meaningful price discovery.
Generic Medicines: Forward Pricing Corridor + Hedging (UK anchor)
Demonstrator only (synthetic data). Continuous bid/offer order book with forward windows, corridor visualisation,
simple hedge-value simulation, and a Dutch auction for near-dated lots.
1) Select SKU + Delivery Window
Place Bid (Buyer)
Place Ask (Seller)
Generates plausible bids/asks inside/around the corridor to show price discovery and spread behaviour.
2) Order Book + Trades
Bids
| Price | Qty | Time |
|---|
Asks
| Price | Qty | Time |
|---|
Trade Tape
| Price | Qty | Window | Time |
|---|
3) Hedging Demo (Buyer budget certainty)
Simulates future spot prices and compares variance of costs with vs without a forward contract.
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4) Near-dated Stock: Dutch Auction
Descending-price auction for lots near expiry. First acceptance clears.
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