On Pharmaceutical Supply Chain Model And Policy Design Considering Price Regulation And Subsidy

Pharmaceuticals are necessary for the prevention,treatment or diagnosis of diseases,and are a basic part of the medical and healthcare system.Its high price and unreasonable pricing have always been important issues and major problems faced by countries all over the world.Scientific pharmaceutical supply chain management is an effective means to solve these problems.The pharmaceutical supply chain is strictly regulated by the regulators.In which,price cap regulation is one of the widely adopted policies,and usually implemented together with the subsidy policy.Therefore,price cap regulation and subsidy has become typical features of the pharmaceutical supply chain.However,taking the market competition,price cap regulation and subsidy policy into account has brought huge challenges to the pharmaceutical supply chain management.In addition,online and offline dual-channel operations are an emerging operation scenario facing the pharmaceutical supply chain,which has also increased the complexity of pharmaceutical supply chain management.Moreover,the decision-making behavior of pharmaceutical supply chain firms will in turn affect the design and implementation of price cap regulation and subsidy policy.Although domestic and foreign scholars have studied different issues of the operation and supply chain management for the pharmaceutical industry,there is a lack of studies on the effects of policy for different links and dual channel structure with online and offline channel;nor integrated research on price cap regulation and subsidy policy,even nor research on operation decision-making and policy design based on the perspective of coupling and synergy between macro government policy and micro firm operation.Therefore,considering the coupling and collaborative of regulator's price cap regulation and pharmaceutical firms' behaviors has important practical significance and theoretical value.Combining the practical problems and the theoretical research progress and gap of the pharmaceutical supply chain management,and based on the typical characteristic of price cap regulation and subsidy of the pharmaceutical supply chain,this dissertation constructes single-and dual-channel pharmaceutical supply chain models considering only price regulation,and both price regulation and subsidy using the game theory and constrained optimization theory for a two-echelon pharmaceutical supply chain composed of a pharmaceutical manufacturer and a pharmacy.Then,this dissertation systematically examines the pricing,ordering and production operational decision-making of the pharmaceutical supply chain firms,analyzes the impact of price regulation and subsidy policy under different channel structures,and designs the optimal price regulation and subsidy policy.The main contents and conclusions of this dissertation are as follows:?.By studing the optimal decision-making of the pharmaceutical supply chain firm under different price regulation,or price regulation and subsidy policies,this dissertation shows that:(1)for a single-channel pharmaceutical supply chain,the optimal retail and wholesale prices of each policy model exist and are unique,and the price of the regulated firm is equal to the corresponding price cap.(2)For a dual-channel pharmaceutical supply chain,the optimal prices,order quantity,and production quantity exist and are unique under the non-channel,offline retail channel,and dual-channel regulation policy or regulation and subsidy policy;however,are two optimal solutions under the online direct channel regulation policy or regulation and subsidy policy.Besides,regardless of the policy model,the retail price of the regulated channel is equal to the corresponding price cap level.?.By studying the influence of different price cap regulation policies and the optimal regulation policy design,this dissertation shows that:(1)for a single-channel pharmaceutical supply chain,1)one-sided price cap regulation(only regulating the pharmacy or pharmaceutical manufacturer)will definitely damage the economic performance of the regulated firm,whereas the unregulated firm may gain a financial advantage.Linked price cap regulation(regulating the whole pharmaceutical supply chain)can enable both the pharmacy and pharmaceutical manufacturer to achieve Pareto improvements.Regardless of the regulation policy,the retail price of pharmaceutical products can be reduced,and the lower price cap,the higher the patient surplus and social welfare.2)Both the manufacturer price cap regulation,and linkage price cap regulation may be the optimal strategies,depending on the retail price cap and the linkage coefficient of wholesale price cap and retail price cap.(2)For a dual-channel pharmaceutical supply chain,1)under the offline retail-channel and dual-channel regulation policies,the pharmaceutical supply chain and manufacturer can obtain higher profits than the non-channel regulation,while the pharmacy's profit will suffer.Under the online direct-channel regulation strategy,if the price cap level satisfies certain conditions,then the two pharmaceutical firms can achieve Pareto improvement.2)If the profitability of the direct channel and the retail channel are equal,then the offline retail-channel and dual-channel regulation may be the optimal policy;if the profitability of the direct channel is lower than the retail channel,then the non-channel,offline retail-channel,online direct-channel and dual-channel regulation may be the optimal policy;if the direct channel owns a higher profitability,then the offline retail-channel,online direct-channel and dual-channel regulation may be the optimal policy.In addition,the optimal price cap regulation can reduce retail prices and increase the total demand for pharmaceuticals.?.By studying the influence of different price cap regulation and subsidy policies and the optimal regulation and subsidy policy design,this dissertation reveals that:(1)for a single-channel pharmaceutical supply chain,1)one-sided or linkage price cap regulation and subsidy policy can achieve a Pareto improvement in the profits for the pharmaceutical manufacturer and pharmacy,depending on the price cap,subsidy level and related thresholds.2)Depending on the negative effect factor of subsidy,each regulation and subsidy policy has one or multi-sets of optimal price caps and subsidy levels to maximize social welfare and achieves Pareto improvement.However,only retailer or linkage price regulation and subsidy may be the possible optimal policy.(2)For a dual-channel pharmaceutical supply chain,1)all the offline retail-,online direct-,and dual-channel regulation and subsidy policy can achieve Pareto improvements in the profits for the pharmaceutical manufacturer and pharmacy,depending on the intensity of competition between channels,price cap,subsidy level and related thresholds.2)Depending on the intensity of competition between channels and the negative effect factor of subsidy,each regulation and subsidy policy has one or multi-sets of optimal price caps and subsidy levels.Moreover,all non-channel,offline retail-,online directand dual-channel regulation and subsidy policy may be the optimal policy.