Research On Collaborative Pricing Of Drug Supply Chain

Drug is directly related to life and health, so every the aspects of drug industry can attract people's attention. There is still a lot of problems in China's pharmaceutical industry, for the reason of both deficiencies in the system and shortcoming of enterprises. As a result of being importance, which itself has period validity, the management of the drug industry should be more rigorous. Therefore, quality management and efficiency management are significant. How to make sure the drug which meets the quality standards can be delivered to retailer in time by the coordination of the enterprises has become the point of drug supply chain optimization. At the same time, close cooperation between enterprises helps to reduce the cost in supply chain, contributing to control drug prices.In this paper, collaborative pricing strategy of drug supply chain is investigated based on the characteristics of drugs, indicating that manufactures and distributors as well as retailers should break the confrontation and establish a stable, long-term cooperation. Pricing in the drug supply chain can be more scientific by information-sharing. Meanwhile, this paper focuses on the drug supply chain collaborative pricing mechanism, pointing out that drug prices in the period of validity reduced gradually. It can reduce the loss of outdated drugs and promote distributors to reduce operating costs and adjust the inventory level, ultimately leading to drug supply chain achieve higher income levels. In this article, the idea of bi-level programming will be used in the study of collaborative pricing in drug supply chain, concerning the profits of both sides. The manufacturer is regarded as decision maker, who decide the price of drugs. The distributor is regarded as follower, who determine the batch and the quantity of purchasing based on the price given by the manufacturer. By means of collaborative pricing, the drug supply chain is able to achieve operational synergies, also the efficiency and effectiveness can be improved.