The Effect of Unannounced Inspection on Prevention of Drug Fraud

doi:10.1007/s11518-018-5382-8

	The Effect of Unannounced Inspection on Prevention of Drug Fraud
	Zhang, Manman 1; Zhang, Juliang 1; Cheng, T. C. E.2; Hua, Guowei 1; Yan, Xiaojie 3; Liu, Yi 1
刊名	JOURNAL OF SYSTEMS SCIENCE AND SYSTEMS ENGINEERING
	2019-02-01
卷号	28 期号:1 页码:63-90
关键词	Drug supervision healthcare system game theory Nash equilibrium incomplete information mechanism design
ISSN号	1004-3756
DOI	10.1007/s11518-018-5382-8
英文摘要	Alarge number of incidents related to fake/inferior-quality drugs have occurred in China in recent years. In order to reduce drug crimes, the China Food and Drug Administration (CFDA) has exploited the new supervision approach, i.e., unannounced inspection (UI), since September 2014. However, the effectiveness of UI in driving drug producers to put more effort into meeting the requirements of Good Manufacturing Practice (GMP) is yet to be ascertained. In this paper we apply game theory to study the effects of UI on the prevention of drug fraud, drug producers' profits, and social welfare under scenarios of complete and incomplete information. We show that UI is not always an effective way of supervision. Specifically, if the upper bound on the punishment is not very large, UI can drive the firmto make the largest self-supervision effort only when the firm's technical level is high and the supervision cost is low. Otherwise, UI cannot drive the firm to make the largest self-supervision effort. Under incomplete information, firms with a high technical level would adopt more self-supervision and make more profit than those with a low technical level. Moreover, we design a new mechanism under incomplete information that can incentive drug producers to make greater self-supervision effort to meet the requirements of GMP under certain conditions.
资助项目	National Natural Science Foundation of China[71390334] ; National Natural Science Foundation of China[71132008] ; Program for New Century Excellent Talents in University[NCET-13-0660]
WOS研究方向	Operations Research & Management Science
语种	英语
出版者	SPRINGER HEIDELBERG
WOS记录号	WOS:000458257400003
内容类型	期刊论文
源URL	[http://ir.amss.ac.cn/handle/2S8OKBNM/32365]
专题	中国科学院数学与系统科学研究院
通讯作者	Zhang, Manman
作者单位	1.Beijing Jiaotong Univ, Sch Econ & Management, Beijing 100044, Peoples R China 2.Hong Kong Polytech Univ, Dept Logist & Maritime Studies, Kowloon, Hong Kong, Peoples R China 3.Chinese Acad Sci, Acad Math & Syst Sci, Beijing 100190, Peoples R China
推荐引用方式 GB/T 7714	Zhang, Manman,Zhang, Juliang,Cheng, T. C. E.,et al. The Effect of Unannounced Inspection on Prevention of Drug Fraud[J]. JOURNAL OF SYSTEMS SCIENCE AND SYSTEMS ENGINEERING,2019,28(1):63-90.
APA	Zhang, Manman,Zhang, Juliang,Cheng, T. C. E.,Hua, Guowei,Yan, Xiaojie,&Liu, Yi.(2019).The Effect of Unannounced Inspection on Prevention of Drug Fraud.JOURNAL OF SYSTEMS SCIENCE AND SYSTEMS ENGINEERING,28(1),63-90.
MLA	Zhang, Manman,et al."The Effect of Unannounced Inspection on Prevention of Drug Fraud".JOURNAL OF SYSTEMS SCIENCE AND SYSTEMS ENGINEERING 28.1(2019):63-90.