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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Veröffentlicht in:PloS one 2022-02, Vol.17 (2), p.e0262655-e0262655
Hauptverfasser: Huang, Zhe, Lan, Yipeng, Zha, Xiangqi
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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&amp;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 &amp; distribution ; Pharmaceuticals ; Profits ; R&amp;D ; Research &amp; 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. 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(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 &amp; distribution</subject><subject>Pharmaceuticals</subject><subject>Profits</subject><subject>R&amp;D</subject><subject>Research &amp; 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(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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