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ORIGINAL RESEARCH article

Front. Med.
Sec. Regulatory Science
Volume 11 - 2024 | doi: 10.3389/fmed.2024.1439864
This article is part of the Research Topic Real-World Applications of Game Theory and Optimization, Volume II View all articles

Game-Theoretic Analysis of Governance and Corruption in China's Pharmaceutical Industry

Provisionally accepted
Xi Wang Xi Wang 1Tao ZHANG Tao ZHANG 1Hanxiang Gong Hanxiang Gong 2*Jinghua Li Jinghua Li 3Baoling Wu Baoling Wu 1Baoxin Chen Baoxin Chen 4Shufang Zhao Shufang Zhao 1
  • 1 Faculty of Humanities and Social Sciences, Macao Polytechnic University, Macao, Macau Region, China
  • 2 The Second Affiliated Hospital of Guangzhou Medical University, Guangzhou, China
  • 3 School of Public Health, Guangzhou Medical University, Guangzhou, China
  • 4 Pingshan General Hospital, Shenzhen, China

The final, formatted version of the article will be published soon.

    With the rapid development of China's pharmaceutical industry, issues of corruption and regulatory effectiveness, and corruption have become increasingly prominent, posing critical challenges to public health safety and the industry's sustainable development. This paper adopts a bounded rationality perspective and employs a game-theoretic evolutionary approach to establish a tripartite evolutionary game model involving pharmaceutical companies, third-party auditing organizations, and health insurance regulatory agencies. It analyzes the stable strategies of the parties involved and the sensitivity of key parameters within this tripartite game system. The study reveals that adherence to health insurance regulations by pharmaceutical companies, refusal of bribes by third-party auditing organizations, and the implementation of lenient regulations by health insurance agencies can form an effective governance equilibrium. This equilibrium state contributes to reducing corruption in the pharmaceutical industry, balancing the interests of all parties, and promoting healthy industry development. Pharmaceutical companies must balance compliance costs against the risks of noncompliance benefits while maximizing profits; third-party auditing organizations need to choose between fulfilling their duties and accepting bribes, considering their economic benefits and professional reputation; health insurance regulatory agencies adjust their strategies between strict and lenient regulation to maximize social welfare. The paper suggests enhancing policy support, strengthening compliance supervision, improving audit independence, and adjusting regulatory strategies to optimize governance in the pharmaceutical industry. Additionally, the research highlights the role of collaborative efforts among the three parties in achieving sustainable governance.Furthermore, the study conducts a numerical simulation analysis to demonstrate the impact of various parameters on the evolutionary stability of the system, providing practical insights into the implementation of regulatory policies. This research offers new insights for policy issues of governance, 删除[箱子]:formulation and governance in China's pharmaceutical sector, providing significant reference value 37 for guiding the industry's sustainable development.

    Keywords: Evolutionary Game Theory1, governance2, corruption3, Pharmaceutical Industry4, Regulatory Strategies5, Public Health Safety6

    Received: 29 May 2024; Accepted: 25 Jul 2024.

    Copyright: © 2024 Wang, ZHANG, Gong, Li, Wu, Chen and Zhao. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

    * Correspondence: Hanxiang Gong, The Second Affiliated Hospital of Guangzhou Medical University, Guangzhou, China

    Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.