Research on government subsidy strategies for new drug R&D considering spillover effects
This paper studies the pharmaceutical production supply chain system composed of upstream and downstream pharmaceutical enterprises, and explores the impact of government subsidy strategies on the new drug research and development (R&D) decision variables and profits of pharmaceutical enterprise...
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description | This paper studies the pharmaceutical production supply chain system composed of upstream and downstream pharmaceutical enterprises, and explores the impact of government subsidy strategies on the new drug research and development (R&D) decision variables and profits of pharmaceutical enterprises as well as social welfare, when considering both the horizontal spillover effects within the industry and the vertical spillover effects between industries. Comparing and analyzing the impact of these strategies including non-government subsidy strategy, pharmaceutical enterprise innovation input subsidy strategy, pharmaceutical enterprise innovative product subsidy strategy, patient price subsidy strategy, and patient medical insurance subsidy strategy. By establishing a four-stage Cournot duopoly model incorporating spillover effects, the equilibrium solutions are obtained by backward induction, and the impact of spillover effects on decision variables is investigated accordingly. Studies have shown that: (a) Government subsidy strategies can promote pharmaceutical enterprises' R&D investment and have a positive incentive effect on the pharmaceutical enterprises' profits and social welfare. (b) The patient medical insurance subsidy strategy is the optimal subsidy strategy, which can generate higher profits for pharmaceutical enterprises and higher social welfare. |
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Comparing and analyzing the impact of these strategies including non-government subsidy strategy, pharmaceutical enterprise innovation input subsidy strategy, pharmaceutical enterprise innovative product subsidy strategy, patient price subsidy strategy, and patient medical insurance subsidy strategy. By establishing a four-stage Cournot duopoly model incorporating spillover effects, the equilibrium solutions are obtained by backward induction, and the impact of spillover effects on decision variables is investigated accordingly. Studies have shown that: (a) Government subsidy strategies can promote pharmaceutical enterprises' R&D investment and have a positive incentive effect on the pharmaceutical enterprises' profits and social welfare. (b) The patient medical insurance subsidy strategy is the optimal subsidy strategy, which can generate higher profits for pharmaceutical enterprises and higher social welfare.</description><identifier>ISSN: 1932-6203</identifier><identifier>EISSN: 1932-6203</identifier><identifier>DOI: 10.1371/journal.pone.0262655</identifier><identifier>PMID: 35143496</identifier><language>eng</language><publisher>United States: Public Library of Science</publisher><subject>Biology and Life Sciences ; Decision making ; Drug discovery ; Drug Industry - economics ; Economic aspects ; Equilibrium ; Evaluation ; Financing, Government ; Government subsidies ; Health insurance ; Health risks ; Impact analysis ; Innovations ; Insurance ; Literature reviews ; Medical innovations ; Medicine and Health Sciences ; Models, Theoretical ; Patients ; Pharmaceutical industry ; Pharmaceutical laws ; Pharmaceutical Preparations - supply & distribution ; Pharmaceuticals ; Profits ; R&D ; Research & development ; Research - economics ; Social factors ; Social Sciences ; Social Welfare ; Subsidies ; Supply chains</subject><ispartof>PloS one, 2022-02, Vol.17 (2), p.e0262655-e0262655</ispartof><rights>(c) The horizontal and vertical spillover effects have different effect on decision variables, enterprises' profits and social welfare under various subsidy strategies.</rights><rights>COPYRIGHT 2022 Public Library of Science</rights><rights>2022 Huang et al. This is an open access article distributed under the terms of the Creative Commons Attribution License: http://creativecommons.org/licenses/by/4.0/ (the “License”), which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License.</rights><rights>2022 Huang et al 2022 Huang et al</rights><lds50>peer_reviewed</lds50><oa>free_for_read</oa><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c5415-16be2e2bec3f26b231b20b70191bad7ffb3faa8631e7087fa3c1ac72a55fcf223</citedby><cites>FETCH-LOGICAL-c5415-16be2e2bec3f26b231b20b70191bad7ffb3faa8631e7087fa3c1ac72a55fcf223</cites><orcidid>0000-0002-3170-9341</orcidid></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktopdf>$$Uhttps://www.ncbi.nlm.nih.gov/pmc/articles/PMC8830673/pdf/$$EPDF$$P50$$Gpubmedcentral$$Hfree_for_read</linktopdf><linktohtml>$$Uhttps://www.ncbi.nlm.nih.gov/pmc/articles/PMC8830673/$$EHTML$$P50$$Gpubmedcentral$$Hfree_for_read</linktohtml><link.rule.ids>230,314,723,776,780,860,881,2915,23845,27901,27902,53766,53768,79569,79570</link.rule.ids><backlink>$$Uhttps://www.ncbi.nlm.nih.gov/pubmed/35143496$$D View this record in MEDLINE/PubMed$$Hfree_for_read</backlink></links><search><creatorcontrib>Huang, Zhe</creatorcontrib><creatorcontrib>Lan, Yipeng</creatorcontrib><creatorcontrib>Zha, Xiangqi</creatorcontrib><title>Research on government subsidy strategies for new drug R&D considering spillover effects</title><title>PloS one</title><addtitle>PLoS One</addtitle><description>This paper studies the pharmaceutical production supply chain system composed of upstream and downstream pharmaceutical enterprises, and explores the impact of government subsidy strategies on the new drug research and development (R&D) decision variables and profits of pharmaceutical enterprises as well as social welfare, when considering both the horizontal spillover effects within the industry and the vertical spillover effects between industries. Comparing and analyzing the impact of these strategies including non-government subsidy strategy, pharmaceutical enterprise innovation input subsidy strategy, pharmaceutical enterprise innovative product subsidy strategy, patient price subsidy strategy, and patient medical insurance subsidy strategy. By establishing a four-stage Cournot duopoly model incorporating spillover effects, the equilibrium solutions are obtained by backward induction, and the impact of spillover effects on decision variables is investigated accordingly. Studies have shown that: (a) Government subsidy strategies can promote pharmaceutical enterprises' R&D investment and have a positive incentive effect on the pharmaceutical enterprises' profits and social welfare. (b) The patient medical insurance subsidy strategy is the optimal subsidy strategy, which can generate higher profits for pharmaceutical enterprises and higher social welfare.</description><subject>Biology and Life Sciences</subject><subject>Decision making</subject><subject>Drug discovery</subject><subject>Drug Industry - economics</subject><subject>Economic aspects</subject><subject>Equilibrium</subject><subject>Evaluation</subject><subject>Financing, Government</subject><subject>Government subsidies</subject><subject>Health insurance</subject><subject>Health risks</subject><subject>Impact analysis</subject><subject>Innovations</subject><subject>Insurance</subject><subject>Literature reviews</subject><subject>Medical innovations</subject><subject>Medicine and Health Sciences</subject><subject>Models, Theoretical</subject><subject>Patients</subject><subject>Pharmaceutical industry</subject><subject>Pharmaceutical laws</subject><subject>Pharmaceutical Preparations - supply & distribution</subject><subject>Pharmaceuticals</subject><subject>Profits</subject><subject>R&D</subject><subject>Research & development</subject><subject>Research - 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Academic</collection><collection>PubMed Central (Full Participant titles)</collection><jtitle>PloS one</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Huang, Zhe</au><au>Lan, Yipeng</au><au>Zha, Xiangqi</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Research on government subsidy strategies for new drug R&D considering spillover effects</atitle><jtitle>PloS one</jtitle><addtitle>PLoS One</addtitle><date>2022-02-10</date><risdate>2022</risdate><volume>17</volume><issue>2</issue><spage>e0262655</spage><epage>e0262655</epage><pages>e0262655-e0262655</pages><issn>1932-6203</issn><eissn>1932-6203</eissn><abstract>This paper studies the pharmaceutical production supply chain system composed of upstream and downstream pharmaceutical enterprises, and explores the impact of government subsidy strategies on the new drug research and development (R&D) decision variables and profits of pharmaceutical enterprises as well as social welfare, when considering both the horizontal spillover effects within the industry and the vertical spillover effects between industries. Comparing and analyzing the impact of these strategies including non-government subsidy strategy, pharmaceutical enterprise innovation input subsidy strategy, pharmaceutical enterprise innovative product subsidy strategy, patient price subsidy strategy, and patient medical insurance subsidy strategy. By establishing a four-stage Cournot duopoly model incorporating spillover effects, the equilibrium solutions are obtained by backward induction, and the impact of spillover effects on decision variables is investigated accordingly. Studies have shown that: (a) Government subsidy strategies can promote pharmaceutical enterprises' R&D investment and have a positive incentive effect on the pharmaceutical enterprises' profits and social welfare. (b) The patient medical insurance subsidy strategy is the optimal subsidy strategy, which can generate higher profits for pharmaceutical enterprises and higher social welfare.</abstract><cop>United States</cop><pub>Public Library of Science</pub><pmid>35143496</pmid><doi>10.1371/journal.pone.0262655</doi><tpages>e0262655</tpages><orcidid>https://orcid.org/0000-0002-3170-9341</orcidid><oa>free_for_read</oa></addata></record> |
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subjects | Biology and Life Sciences Decision making Drug discovery Drug Industry - economics Economic aspects Equilibrium Evaluation Financing, Government Government subsidies Health insurance Health risks Impact analysis Innovations Insurance Literature reviews Medical innovations Medicine and Health Sciences Models, Theoretical Patients Pharmaceutical industry Pharmaceutical laws Pharmaceutical Preparations - supply & distribution Pharmaceuticals Profits R&D Research & development Research - economics Social factors Social Sciences Social Welfare Subsidies Supply chains |
title | Research on government subsidy strategies for new drug R&D considering spillover effects |
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