Comparative study on government subsidy models for competitive drug supply chains under centralized procurement policy
As the generic drug market tends to be saturated, the structural transformation of generic drug companies is imminent, while the high investment and high-risk attributes of innovative drug research and development aggravate the transformation difficulties. Against the backdrop of drug centralized pr...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Frontiers Media S.A.
2025-03-01
|
| Series: | Frontiers in Public Health |
| Subjects: | |
| Online Access: | https://www.frontiersin.org/articles/10.3389/fpubh.2025.1542858/full |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1850052012046024704 |
|---|---|
| author | Yan Wen Yan Wei Lu Liu |
| author_facet | Yan Wen Yan Wei Lu Liu |
| author_sort | Yan Wen |
| collection | DOAJ |
| description | As the generic drug market tends to be saturated, the structural transformation of generic drug companies is imminent, while the high investment and high-risk attributes of innovative drug research and development aggravate the transformation difficulties. Against the backdrop of drug centralized procurement policy, considering the effect of health insurance reimbursement and market competition ferocity, this study constructs a differential game model of a secondary drug supply chain comprising two competing drug companies and a single healthcare institution. In addition, this study comparatively analyzes the optimal equilibrium strategies and supply chain profit levels of drug research and development investment and healthcare service efforts under four government subsidy modes, further discussing them along with arithmetic examples. It is found that the government's subsidy behavior markedly influenced drug companies' investment in drug research and development and healthcare institution' service cost investment. Besides, different incentives for supply chain members' decision-making and profits were noted in different markets with different competition intensities. In the low-intensity competition market, the government's subsidies to innovative drug companies generate much higher social welfare than other modes. In the high-intensity competition market, the government subsidized healthcare institution can minimize the mutually exclusive effects of subsidies on the development of innovative and generic drug companies, and eventually drive the reform and development of the entire drug industry. |
| format | Article |
| id | doaj-art-e637e15ce5074f6884afe9357f4822c5 |
| institution | DOAJ |
| issn | 2296-2565 |
| language | English |
| publishDate | 2025-03-01 |
| publisher | Frontiers Media S.A. |
| record_format | Article |
| series | Frontiers in Public Health |
| spelling | doaj-art-e637e15ce5074f6884afe9357f4822c52025-08-20T02:52:58ZengFrontiers Media S.A.Frontiers in Public Health2296-25652025-03-011310.3389/fpubh.2025.15428581542858Comparative study on government subsidy models for competitive drug supply chains under centralized procurement policyYan WenYan WeiLu LiuAs the generic drug market tends to be saturated, the structural transformation of generic drug companies is imminent, while the high investment and high-risk attributes of innovative drug research and development aggravate the transformation difficulties. Against the backdrop of drug centralized procurement policy, considering the effect of health insurance reimbursement and market competition ferocity, this study constructs a differential game model of a secondary drug supply chain comprising two competing drug companies and a single healthcare institution. In addition, this study comparatively analyzes the optimal equilibrium strategies and supply chain profit levels of drug research and development investment and healthcare service efforts under four government subsidy modes, further discussing them along with arithmetic examples. It is found that the government's subsidy behavior markedly influenced drug companies' investment in drug research and development and healthcare institution' service cost investment. Besides, different incentives for supply chain members' decision-making and profits were noted in different markets with different competition intensities. In the low-intensity competition market, the government's subsidies to innovative drug companies generate much higher social welfare than other modes. In the high-intensity competition market, the government subsidized healthcare institution can minimize the mutually exclusive effects of subsidies on the development of innovative and generic drug companies, and eventually drive the reform and development of the entire drug industry.https://www.frontiersin.org/articles/10.3389/fpubh.2025.1542858/fullcentralized procurementgovernment subsidiesdifferential gamedrug supply chaininnovative drug |
| spellingShingle | Yan Wen Yan Wei Lu Liu Comparative study on government subsidy models for competitive drug supply chains under centralized procurement policy Frontiers in Public Health centralized procurement government subsidies differential game drug supply chain innovative drug |
| title | Comparative study on government subsidy models for competitive drug supply chains under centralized procurement policy |
| title_full | Comparative study on government subsidy models for competitive drug supply chains under centralized procurement policy |
| title_fullStr | Comparative study on government subsidy models for competitive drug supply chains under centralized procurement policy |
| title_full_unstemmed | Comparative study on government subsidy models for competitive drug supply chains under centralized procurement policy |
| title_short | Comparative study on government subsidy models for competitive drug supply chains under centralized procurement policy |
| title_sort | comparative study on government subsidy models for competitive drug supply chains under centralized procurement policy |
| topic | centralized procurement government subsidies differential game drug supply chain innovative drug |
| url | https://www.frontiersin.org/articles/10.3389/fpubh.2025.1542858/full |
| work_keys_str_mv | AT yanwen comparativestudyongovernmentsubsidymodelsforcompetitivedrugsupplychainsundercentralizedprocurementpolicy AT yanwei comparativestudyongovernmentsubsidymodelsforcompetitivedrugsupplychainsundercentralizedprocurementpolicy AT luliu comparativestudyongovernmentsubsidymodelsforcompetitivedrugsupplychainsundercentralizedprocurementpolicy |