Optimal pricing strategies and social welfare of a diabetic pharmaceutical supply chain under supply disruption risk

Vafaeinejad, Mahyar, Taleizadeh, Ata Allah, Bhattacharya, Arijit and Vafaeinejad, Kamyar (2025) Optimal pricing strategies and social welfare of a diabetic pharmaceutical supply chain under supply disruption risk. Frontiers of Engineering Management. ISSN 2095-7513

Full text not available from this repository. (Request a copy)

Abstract

Diabetes is a serious public health threat. Therefore, the need for the supply and dispensing of diabetic drugs cannot be neglected. This study explores the impacts of supply disruption risks on pricing strategies for two diabetic drugs under three power structures, i.e., supplier–Stackelberg (SS), drugstore–Stackelberg (DRS), and centralized setting (CS), in an attempt to track the optimum strategies. We show how changes in procurement costs and disruption likelihood alter the balance between consumer surplus, profit, and overall social welfare within the pharmaceutical supply chain. CS will be preferred in scenarios in which centralized control over procurement and distribution is highly valuable, particularly in the presence of high procurement costs and supply disruptions, such as those that occur with specialized medications such as insulin analogs and biologics. In addition, in scenarios of low to moderate procurement costs, especially for generic drugs, the DRS strategy dominates CS in the advocacy of social welfare since drugstores can buy at competitive prices. Overall, DRS and CS consistently outperform SS in terms of consumer surplus. However, SS becomes more effective in scenarios where supply disruptions occur and procurement costs drop to zero, such as when governments subsidize drugs during emergencies.

Item Type:	Article
Uncontrolled Keywords:	diabetic drug shortage,disruption risk,patient surplus,pharmaceutical supply chain,social welfare,decision sciences (miscellaneous),management science and operations research,sdg 3 - good health and well-being ,/dk/atira/pure/subjectarea/asjc/1800/1801
Faculty \ School:	Faculty of Social Sciences > Norwich Business School
Related URLs:	http://www.scopus.com/inward/record.url?...
Depositing User:	LivePure Connector
Date Deposited:	19 Mar 2025 10:30
Last Modified:	28 Mar 2025 13:15
URI:	https://ueaeprints.uea.ac.uk/id/eprint/98798
DOI:	10.1007/s42524-025-4027-0

Actions (login required)

View Item