Pharmaceutical enterprises integrity supervision strategy when considering rent-seeking behavior and government reward and punishment mechanism

Abstract

The integrity of pharmaceutical enterprises is crucial to public health, social stability, and national security, consistently garnering attention from both the government and society. The efficiency of pharmaceutical integrity supervision is closely linked to government oversight mechanisms and the behaviors of third-party testing agencies. This study constructs an evolutionary game model that incorporates rent-seeking dynamics and introduces a reward-punishment mechanism, integrating drug production enterprises, third-party testing agencies, government regulators, and drug wholesale enterprises. By solving for the stable equilibrium points of each participant’s strategic choices and analyzing the stability of strategy combinations using Lyapunov’s first method, the study employs Matlab 2022b for simulation analysis to verify the impact of various decision variables on the strategic choices of different entities. The findings reveal that: 1) The rejection of rent-seeking by third-party testing agencies enhances the incentives for drug production enterprises to operate with integrity, indicating that the government should increase penalties for accepting rent-seeking behavior. 2) Drug wholesale enterprises’ reporting likelihood increases production enterprises’ integrity and third-party testing agencies’ rejection of rent-seeking, inversely tied to reporting costs. 3) Reducing the costs of stringent government supervision and increasing the speculative costs of rent-seeking for third-party testing agencies help prevent dishonest practices among drug production enterprises. 4) A well-designed reward and punishment mechanism facilitates a synergistic environment of government supervision, self-discipline among pharmaceutical enterprises, and social harmony. This paper enriches the theoretical foundation of pharmaceutical integrity supervision and offers pertinent countermeasures and recommendations.