Pricing of medical services and channel selection strategies for pharmaceutical supply chain under the zero‐markup drug policy

Abstract

AbstractThis paper studies the channel strategies of drug suppliers in the drug supply chain under the zero‐plus drug pricing policy. With the popularity of e‐commerce and online shopping, supply chain firms have begun considering expanding their business to online channels. In this paper, we construct a game model to explore the impact of the pharmaceutical supply chain's development of online channels on supply chain members. We conclude that under the zero profits policy, increasing the public hospital's public welfare level will increase the price of drugs, decrease the price of medical services, and reduce the overall cost of patients. In addition, the greater the sensitivity of medical services, the lower the likelihood that a drug supplier will open an online pharmacy, and the lower the level of public good, the greater the likelihood that a drug supplier will open an online pharmacy. In addition, under certain conditions, patients can receive a higher level of medical service and spend less on healthcare under a dual‐channel strategy. Finally, under a dual‐channel strategy, an appropriate profit‐sharing mechanism can eliminate instability in the pharmaceutical supply chain.