Quality Inspection Of Drug Supply Chain

Drug is a special commodity that must satisfy the requirements of Good Manufacturing Practice(GMP)/Good Supply Practice(GSP)to ensure its quality.However,due to the highly professional characteristics of drug,ordinary consumers,or even drug trading firms(wholesalers,retailers)cannot identify its quality.Thus the government must carry out drug quality inspection to help firms and society to ensure drug safety.In addition,due to the drug quality problems caused by raw materials are increasing,China Food and Drug Administration(CFDA)has gradually begun to explore the new management mode of raw materials,and try to incorporate raw materials'production and use into their inspection since 2008.In order to regulate the behavior of drug manufacturers and trading firms,we have promulgated a series of laws and regulations such as"Pharmaceutical Administration Law","Good Manufacturing Practice for Pharmaceutical Products","Good Supply Practice for Pharmaceutical Products".And the main inspection approaches are unannounced inspection(UI)and announced inspection(AI).Still,considering the effect of raw materials on the final drug quality,CFDA may use extended inspection to regulate the relative firms.However,from the number of drug cases published by CFDA,we find that the counterfeit drug incidents are still frequent.Specifically,with the normalization of the highly respected UI,the number of counterfeit drug cases showed a tendency of increase rather than decrease since 2016.In China,there are a large number of drug manufacturers and trading firms,each firm has its own characteristics those often belong to firm's private information.In this dissertation,we developed a series of inspection game models by considering the characteristics of firms in the perspective of drug supply chain.Specifically,we studied the effectiveness of UI and AI under complete information and incomplete information,and their respective applicable scope;proposed the new inspection mechanism under incomplete information,which including the penalty has upper bound and no upper bound;investigated the inspection game when drug inspection involves raw materials supplier;proposed how to use advanced information technology to assist in inspection to effectively reduce inspection costs and achieve better inspection effectiveness.The innovative conclusions obtained in this dissertation are mainly as follows:(1)Both UI and AI are not always an effective inspection method,and the inspection effect depends on the specific circumstances.Under complete information,UI can achieve better inspection results when the firm's technical level and inspection costs are low;otherwise,AI is better.Under incomplete information,if the high or low technical level is low,UI is better than AI when the inspection cost is low,worse that AI when the supervision cost is high;if the low technical level is high,AI is better.Therefore,CFDA cannot rely on an certain inspection approach arbitrary,but should adopt different inspection approach for different firms.(2)Both the new mechanism(the penalty has upper bound and no upper bound)can encourage drug manufacturers and trading firms comply the requirements of GMP and GSP under most circumstances.However,sometimes a better inspection effect is at the expense of part of social surplus.Especially for the new mechanism with upper bound.(3)When the inspection game considering the raw material supplier,the inspection effect of UI and AI depends on the specific circumstances.Only when the inspection cost is very high,the inspection of raw materials can be completely passed on to drug manufacturers;otherwise,the raw materials supplier should be inspected by CFDA.Still,encouraging report can often result in a better inspection effect,while at the same time may causing the loss of social welfare.(4)Drugs are divided into four categories:safe and low value,safe but high value,risk and high value,and risk but low value based on safety requirements and economic indicators.For safe and low value drug,punishing once detected can achieve a good inspection effect;for safe and high value drug,strict punishing once detected supplemented by process monitoring is better;for risk and high value drug,strict process monitoring can achieve a good inspection effect;for risk and low value drug,process monitoring supplemented by punishing once detected is better.