Price Cap Models in Pharmaceutical Online-to-Offline Supply Chains

Joint Authors

Zheng, Yi
Liu, Li
Shi, Victor
Liu, Bin
Huang, Wenxing

Source

Complexity

Issue

Vol. 2020, Issue 2020 (31 Dec. 2020), pp.1-16, 16 p.

Publisher

Hindawi Publishing Corporation

Publication Date

2020-11-06

Country of Publication

Egypt

No. of Pages

16

Main Subjects

Philosophy

Abstract EN

Pharmaceutical supply chains are often highly complex with conflicting objectives of social welfare and profit maximization.

Furthermore, there are various stakeholders including pharmaceutical manufacturer, distributors, retailers, patients, and the government.

In this paper, we consider a two-stage supply chain consisting of one pharmaceutical manufacturer and a pharmacy with online and offline channels.

We focus on four price cap models: no price cap regulation, pharmaceutical manufacturer’s price cap regulation, pharmacy price cap regulation, and linkage price cap regulation.

We apply game theory, investigate how the price cap regulations affect the firms’ pricing, and evaluate the economic performance and social welfare of the dual-channel pharmaceutical supply chain.

Our findings show that first, like the single-channel pharmaceutical supply chain, the profit of the regulated firm always decreases and the profit of the unregulated firm always increases when they are under one-sided price cap regulations.

Second, the impacts of the linkage price cap regulation on the supply chain are more complicated depending on the linkage coefficient and market share.

Overall, our findings can provide theoretical and practical insights to help the government devise price cap regulations for complex modern pharmaceutical supply chains.

American Psychological Association (APA)

Zheng, Yi& Liu, Li& Shi, Victor& Liu, Bin& Huang, Wenxing. 2020. Price Cap Models in Pharmaceutical Online-to-Offline Supply Chains. Complexity،Vol. 2020, no. 2020, pp.1-16.
https://search.emarefa.net/detail/BIM-1143747

Modern Language Association (MLA)

Zheng, Yi…[et al.]. Price Cap Models in Pharmaceutical Online-to-Offline Supply Chains. Complexity No. 2020 (2020), pp.1-16.
https://search.emarefa.net/detail/BIM-1143747

American Medical Association (AMA)

Zheng, Yi& Liu, Li& Shi, Victor& Liu, Bin& Huang, Wenxing. Price Cap Models in Pharmaceutical Online-to-Offline Supply Chains. Complexity. 2020. Vol. 2020, no. 2020, pp.1-16.
https://search.emarefa.net/detail/BIM-1143747

Data Type

Journal Articles

Language

English

Notes

Includes bibliographical references

Record ID

BIM-1143747