Channel Selection Of The Pharmaceutical Supply Chain Considering Price Regulation

With the development of e-commerce,the supply chain channel structure of various industries has ushered in new changes,and the pharmaceutical supply chain is no exception.Different from the general industry supply chain,the pharmaceutical supply chain is subject to the maximum price cap set by the government.Therefore,it is particularly important to study the channel selection of the pharmaceutical supply chain under the price regulation.We consider a two-echelon pharmaceutical supply chain composed of one pharmaceutical manufacturer and one pharmacy,and study the influence of price regulation on the channel choice of the pharmaceutical manufacturer.We build based model,incomplete substitution model,asymmetric market structure model and considering selling cost model.From these 4 kinds of models,we obtain the optimal decisions of direct selling channel,distribution channel,dual channel under no price regulation or under the price regulation.Then we compare the equilibrium profits of the three different channel,and obtain the optimal channel selections under different price regulation levels.And we analyze the key factors and the mechanism behind the channel selection.Finally,the sensitivity analysis of the interval boundary of choosing each supply chain channel is carried out.The research results show that the pharmaceutical manufacturer has different channel selection strategies in different models,and the maximum possible market price,maximum possible marginal profit and the level of regulation will have an impact on pharmaceutical manufacturer's channel selection under the same model.In the basic model,pharmaceutical manufacturer is more inclined to choose direct selling channel and dual channel,and only when the regulation price is low then can choose all three channels.In the incomplete substitution model,pharmaceutical manufacturer is more inclined to choose dual channel,and only when the regulation price is low then can choose direct selling channel or distribution channel.In asymmetric market structure model,if the pharmaceutical manufacturer's potential maximum market price is higher than pharmacy's potential maximum market price,then the pharmaceutical manufacturer should choose the direct selling channel;if it is much lower,then the pharmaceutical manufacturer should choose the distribution channel;if it is lower than pharmacy's potential maximum market price,but higher than a certain value: if the regulation price is low,then the pharmaceutical manufacturer should choose distribution channel;if the regulation price is high or there is no price regulation,then the pharmaceutical manufacturer should choose dual channel.In considering selling cost model,if the pharmaceutical manufacturer's potential maximum marginal profit is higher than pharmacy's potential maximum marginal profit,then the pharmaceutical manufacturer should choose the direct selling channel;if it is much lower,then the pharmaceutical manufacturer should choose the distribution channel;if it is lower than pharmacy's potential maximum marginal profit,but higher than a certain value: then if the regulation price is low,then the pharmaceutical manufacturer should choose distribution channel;if the regulation price is high or there is no price regulation,then the pharmaceutical manufacturer should choose dual channel.In addition,the influence of the change of each factor on the interval boundary of each supply chain channel selected by pharmaceutical manufacturer is given.