Using Malmquist and epsilon-based data envelopment analysis to assess the performance efficiency of pharmaceutical manufacturers

Hoang-Phu Nguyen, Thi-Ha Thai and Chia-Nan Wang

International Journal of Management and Decision Making, 2025, vol. 24, issue 3, 209-235

Abstract: The pharmaceutical industry in Vietnam has seen significant growth, but many components require significant capacity investment. Consumers now prefer pharmacies that comply with good pharmaceutical practice standards over unlicensed outlets, leading to increased competition for market share. This study aims to develop a comprehensive framework for assessing the efficiency of pharmaceutical manufacturers, focusing on performance evaluation of companies. A hybrid approach using DEA Malmquist and EBM methods was applied to 12 pharmaceutical companies in Vietnam from 2017 to 2020. The study focuses on the technical and technological components of pharmaceutical enterprises, offering customised insights and actionable knowledge. The study introduces an innovative evaluation approach, including proportional adjustments of inputs/outputs and accounting for slacks, providing a comprehensive evaluation of efficiency and inefficiency within decision-making units (DMUs). This comprehensive method offers insights for benchmarking, strategic planning, and decision-making, contributing to the industry's sustainability journey and influencing the development of pharmacological systems.

Keywords: performance efficiency; pharmaceutical company; data envelopment analysis; DEA; Malmquist; epsilon-based measure; EBM. (search for similar items in EconPapers)
Date: 2025
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