Comparative Study on Low-Carbon Strategy and Government Subsidy Model of Pharmaceutical Supply Chain

Yan Wen and Lu Liu ()
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Yan Wen: School of Business, Qingdao University, Qingdao 266071, China
Lu Liu: School of Business, Qingdao University, Qingdao 266071, China

Sustainability, 2023, vol. 15, issue 10, 1-26

Abstract: Despite the growing urgency to curb carbon emissions worldwide, the healthcare industry, particularly the pharmaceutical industry, has received little attention from the sustainability community in terms of its contribution to the global carbon footprint. This paper constructs a differential game model of the secondary pharmaceutical supply chain consisting of pharmaceutical enterprises and medical institutions in the context of centralized drug procurement policy, considering the effects of health insurance reimbursement and consumers’ low-carbon preferences, and compares and analyzes the feedback equilibrium strategies of low-carbon inputs and marketing efforts, supply chain profits, and social welfare levels under four government subsidy models and further discusses them with arithmetic examples. The results illustrated that government subsidies have a significant impact on the low-carbon investment of pharmaceutical enterprises and the low-carbon marketing of medical institutions; subsidies for pharmaceutical enterprises can significantly increase the low-carbon investment and profit level of pharmaceutical enterprises; subsidies for medical institutions can effectively promote the implementation of the “zero-rate” policy and the realization of the emission reduction target under the centralization policy of medical institutions, increase the market demand for low-carbon drugs, and thus gain higher profits; the dual-subsidy model of the government brings higher social welfare than the single-subsidy model, and under a reasonable subsidy ratio, the profit and social welfare of the whole supply chain can be maximized.

Keywords: low-carbon economy; government subsidies; consumer preferences; differential game; pharmaceutical supply chain (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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