Research On Incentive Mechanism Of Expired Drugs Reversed Supply Chain From The Perspective Of Government Subsidy

With the development of economic society and the prosperity of people's lives in China,people pay more attention to physical health.It is urgent to solve the problem of recycling of expired drugs because residents do not know about recycling and lack of environmental protection awareness.Moreover,the company lacks social responsibility.Besides pharmaceutical companies are reluctant to carry out recycling activities because of the low value of expired drug recycling;Moreover,the problem of expired drugs is in trouble because of China's regulatory models,laws and regulations,etc.Therefore,the work of China's drug recovery is difficult to carry out.This paper constructs the model of China's drug recycling supply chain and studies the supply chain incentive contract to explore a stable and effective drug recovery model in China.Firstly,this paper studies an expired drug recycling supply chain system consisting of a drug manufacturer and a drug retailer influenced by government provides recycling subsidies in the case of information symmetry,and finds their best decision under the cooperative mode and non-cooperative mode.In order to solve this effect,this paper design a price-subsidy contract and a recycling cost-sharing contract to coordinate the drug supply chain,and it finds that only when the cost of recycling was shared and the price subsidy changes in a certain range,it can rise to coordinate the role of the supply chain.The increase in environmental benefits will make recycling easier,but it will also spur the desire of drug retailers to expect higher share ratios and higher price subsidies.It can be seen from the simulation that the incentive effect of government subsidies will be affected by the position of the company in the supply chain.But in general,increasing government subsidies can improve the expected return and optimal recovery of manufacturers,retailers,and systems.Then we introduce moral hazard problem under the situation of information asymmetry.The government encourages drug manufacturers to recycle expired drugs.And this paper builds a game model that uses government-led,drug manufacturers and drug retailers as followers.Based on the principal-agent theory and the display principle of discriminating game,the paper discusses the problem of drug recycling supply chain contract design under asymmetric information.The results show that linear payments from drugs retailers are positively correlated with government subsidies and negatively correlated with market risk;As the risk factorincreases,the sensitivity of retailers' fixed income to government subsidies increases first and then decreases;Different types of retailers have different optimal risk tolerance values.Under the optimal risk factor,government subsidies have the most obvious effect on the growth of retailers' fixed income.The government can choose the most appropriate subsidy value for supply chain incentives based on market risk in advance.;L-type retailers are more resistant to risks and have higher fixed income and commission rates.Then the government decision-making variables are used as system-generated variables.The government also acts as a participant in the drug recovery supply chain system and aims to maximize the environmental benefits.This paper establishes the triple Stackelberg model of the masters of government,drug manufacturers and drug retailers.The game model proves that the greater the environmental benefits of recycling expired drugs,the greater the expected return on the supply chain.In the actual recycling process,the focus should be on those expired drugs that have a greater impact on improving the environment.Drugs with high environmental benefits have obvious changes with risk factors,and their ability to resist risks is poor.In actual recycling work,it is also necessary to combine market risks and flexibly encourage the recovery of expired drugs with different environmental benefits.Under low market risk,government subsidies can play a better incentive effect.The government expected income is highly sensitive to the recovery effort coefficient.Drug retailers with higher operating capacity and smaller recycling cost factor should be encouraged to join the supply chain system to increasing the system income.Finally,this research focus on the drug recycling supply chain contract incentive from different angles.We get the best decisions of the government,drug manufacturers and drug retailers.And after the relevant analysis,we set an effective incentive contracts to make the drug recycling supply chain operate efficiently and steadily.It will help the government and enterprises better understand the operation mechanism of the drug recycling supply chain.In future research,researchers can further subdivide the research objectives and study more about the "many-to-many" multi-cycle contract design.