Cooperation Models Of Pharmaceutical Supply Chain With Specialty Pharmacies

Pharmaceutical industry is an important part of the national economy,which is closely related to people’s life,health,quality of life and other vital interests,and is a major concern of the whole society.Among them,specialty drugs occupy an important position in pharmaceutical spending.The development of specialty drugs has given rise to a new retail model: specialty pharmacy,a model in which pharmacies obtain the distribution rights of pharmaceutical companies’ products,and patients obtain prescriptions from hospitals and buy drugs directly from pharmacies and receive professional guidance and services.In China,it is also called DTP pharmacy(Direct-to-patient pharmacy).The specialty pharmacies are core players in the distribution process of specialty drugs,which can greatly satisfy the common interests of hospitals,manufacturers,retailers,and patients by completely connecting the supply side(pharmaceutical companies),prescription side(hospitals)and demand side(patients),and combining the logistics function of drug distribution.However,the development of specialty pharmacies in China still exists with narrow layouts,high management and service costs,and imperfect management systems.To this end,it is necessary to make full use of the existing resources of specialty pharmacies,utilize their characteristics and advantages,and strengthen the cooperation between specialty pharmacies and other links to improve the economic and social benefits of the pharmaceutical supply chain.There are no theoretical studies that focus on specialty pharmacies or consider the position of specialty pharmacies in the pharmaceutical supply chain and their relationship with other pharmaceutical supply chain members.Given the huge market potential of specialty pharmacies and the inadequacy of existing research,this paper establishes a pharmaceutical supply chain model considering specialty pharmacies from the perspective of pharmaceutical supply chain,and studies the impact of competition between different types of specialty pharmacies on pharmaceutical supply chain.With regard to the current problems in the management of specialty pharmacies in China,it explores the cooperation model of pharmaceutical supply chain,with the specialty pharmacy as the core,and provides corresponding solutions to the current management problems of specialty pharmacies in China from theoretical perspective.First,the demand function of specialty pharmacies is established based on the analysis of the operation mode and demand characteristics of specialty pharmacies in China.Accordingly,the competition models between the same type and different types of specialty pharmacies are developed respectively by combining the characteristics of different types of specialty pharmacies,and the relationship between the service effort level of specialty pharmacies and patient satisfaction is further analyzed.The results show that the order percentage and service cost coefficients of pharmacies have a significant impact on the competition and are negatively related to the service effort levels of pharmacies in the competition among the same type of specialty pharmacies.In competition between different types of specialty pharmacies,excessive patient preference is not beneficial to either party in the competition.When patient preference is within the appropriate range,it can help motivate specialty pharmacies to improve their service efforts,thereby increasing patient satisfaction.In addition,if the gap between the service effort levels of specialty pharmacies becomes larger,it will be more detrimental to the total patient satisfaction.Second,in view of the current phenomenon that specialty pharmacies commonly cooperate with manufacturers to launch patient services,it establishes service cooperation models between specialty pharmacy and manufacturer,explore the application scope of different cooperation models(manufacturer sharing service costs,manufacturer providing service subsidies,and manufacturer assisting services)and their impact on the pharmaceutical supply chain.The models are expanded to hybrid cooperation models.The findings suggest that,under certain conditions,the manufacturer sharing service cost model and the manufacturer providing service subsidy model can motivate specialty pharmacies to increase its service effort level;When production and management costs are high,service cost sharing and service subsidy models can achieve higher patient satisfaction;For the manufacturer,the hybrid cooperation model is always better than the simple cooperation model;For the whole supply chain,the centralized decision model and the manufacturer assists service model can achieve higher total profit.On this basis,for the revenue allocation problem between the manufacturer and the specialty pharmacy,a revenue allocation solution under the centralized decision scenario is proposed by combining the cooperative game theory,taking into account the relative contribution and relative loss of the members.Third,to fully utilize the resources owned by specialty pharmacies and improve the patient consultation efficiency,cooperation models between specialty pharmacies and public Internet hospitals are established to explore the application scope of different cooperation models(specialty pharmacy sharing service costs and specialty pharmacy providing service subsidies)and their impact on the pharmaceutical supply chain.Given the social welfare attributes of public Internet hospitals,further analysis is conducted on the social and economic benefits of public Internet hospitals.The theoretical and numerical results show that traditional supply chain cooperation mechanisms can only improve total supply chain efficiency in specific situations due to the social welfare attributes of public Internet hospital.For the specialty pharmacy,both of these cooperation models can stimulate its service effort level and increase specialty pharmacy profits;For the public Internet hospital,the two cooperation models not only fail to motivate its service efforts,but also fail to effectively improve its benefits in most cases.In this regard,this paper further proposes a cooperation model in which the specialty pharmacy share the social benefits,and theoretical and numerical analyses show that the cooperation can effectively relieve the service pressure of the public Internet hospital and increase the benefits of specialty pharmacies,public Internet hospitals and patients under certain conditions.Last,multi-party cooperation models of specialty pharmacy with manufacturer and public Internet hospital are developed to explore the impact of different cooperation models(manufacturer and specialty pharmacy sharing service costs simultaneously,manufacturer and specialty pharmacy providing service subsidies simultaneously,manufacturer sharing service costs and specialty pharmacy providing service subsidies,and manufacturer providing subsidies and specialty pharmacy sharing costs)on the pharmaceutical supply chain.The results indicate that for the specialty pharmacy,each cooperation mechanism provides an incentive for its service effort level and increases its profits;For the public Internet hospital,the traditional supply chain cooperation mechanism fails to incentivize its service effort level and can even be detrimental to its effectiveness;For the manufacturer,it is necessary to choose the cooperation mechanism wisely to obtain more profit.In addition,when social welfare-oriented organizations are involved in collaborations related to economically efficient businesses,their efforts to improve social welfare are sometimes free-ridered by other businesses.Therefore,considering that the total profit of the supply chain can be optimized under the centralized decision situation,and combining with the coalition constraints of the current supply chain cooperation,a Myerson value-based cooperation benefit distribution scheme is proposed to make each member of the supply chain share the social responsibility and economic benefits.This paper establishes the first theoretical model of pharmaceutical supply chain considering specialty pharmacies,studies the impact of the competition between different types of specialty pharmacies on the pharmaceutical supply chain,and explores the cooperation models of pharmaceutical supply chain with specialty pharmacies.It opens a new direction for the theoretical research of pharmaceutical supply chain,further improves the theoretical framework of pharmaceutical supply chain,enriches the theoretical research of specialty pharmacies,and promotes the application of game theory in pharmaceutical supply chain.Meanwhile,this paper provides decision basis for specialty pharmacies and other pharmaceutical supply chain members for competition or cooperation in different situations,and provides more management insights for domestic and foreign pharmaceutical supply chain enterprises,which helps the improvement and development of specialty pharmacy in China.