Abstract: Pharmaceutical industry is a typical innovation-driven industry. R&D innovation is not only a basis of production and development of this industry, but also an important source of long-term stable profits and continuous competition for pharmaceutical enterprises. However, the high risk, high cost and high technical complexity of new drug creation have induced many pharmaceutical companies to small innovation and intensive marketing rather than blockbuster innovation. On the other hand, due to the strong spillover effect of pharmaceutical innovation, it is hard to achieve social optimal by market mechanism alone. In this regard, it is necessary for governments in various countries to put forward innovation incentive policies from the national strategic level to enhance pharmaceutical enterprises' innovation incentives and solve the market failure in the research and development of new drugs. However, most previous literature took innovation incentive policy as a whole, and lacked the analysis of the differences within the policy. In particular, little attention has been paid to examine potential differences in incentive effects of various policy instruments. In view of the quasi-public nature of drugs, pharmaceutical market performance is constrained by various factors such as medical insurance policy and therapeutic competition. Thus, it is necessary to further clarify the choice of innovation incentive policy tools as well as their application conditions.
To address the above problems, this paper subdivides innovation incentive policy into cost compensation mechanism (characterized by government innovation cost sharing) and innovation output incentive mechanism (characterized by government strategic innovation subsidy). More specifically, we develop a stylized model comprising two representative pharmaceutical enterprises who produce and sell partially substitutable drugs such as different drugs for the same disease. The two enterprises have two options. One is to conduct R&D innovation and produce innovative drugs, and the other is not to conduct R&D innovation and produce general drugs. We investigate optimal decisions of pharmaceutical enterprises in a competitive market across three different incentive schemes, namely, pure market mechanism (i.e., without government intervention), government innovation cost sharing, and government strategic innovation subsidy. We further compare equilibrium outcomes across the above three incentive policies and examine the influence mechanisms of different incentive policies on drug prices, pharmaceutical enterprises' profits and pharmaceutical market allocation. The main results are as follows.
First, three incentive mechanisms, i.e., pure market mechanism, government innovation cost sharing, and government strategic innovation subsidy can induce pharmaceutical enterprises to conduct R&D innovation. Notably, only the government strategic innovation subsidy can allow pharmaceutical enterprises to achieve social optimality in innovation investment, while the pure market mechanism and the government innovation cost sharing will lead to distortion of pharmaceutical innovation investment in the majority of situations. Second, the government innovation cost sharing always enhances the pharmaceutical enterprises' innovation rewards, while the government strategic innovation subsidy can either enhance or reduce their innovation rewards, which depends the medical copayment level. In particular, when the copayment level is sufficiently high, the government strategic innovation subsidy will lower pharmaceutical enterprises' innovation profits. Finally, the government innovation cost sharing and the government strategic innovation subsidy can both enhance social welfare of the innovation pharmaceutical market, but have opposite different effects on prices of innovative drugs. The government innovation cost sharing will push up the innovative drugs' prices while the government strategic innovation subsidy will lower their prices.
Several managerial insights and policy implications are derived from our main research results. First of all, there is no absolute optimal policy to promote pharmaceutical innovation. Thus, the government should select desirable innovation incentive policies based on different policy objectives. Specifically, if the government aims to control drug prices and improve social welfare, it should select the strategic innovation subsidy policy. It is noteworthy that the government strategic innovation subsidy will lead to decreased innovation rewards for pharmaceutical enterprises when the copayment level is relatively high. In this regard, the government strategic innovation subsidy will lower R&D innovation incentives for pharmaceutical enterprises and increase risk of supply shortages of innovative drugs in the long run. On the other hand, if the government aims to promote the development of the pharmaceutical industry, it should select the innovation cost sharing policy to raise pharmaceutical enterprises' profitability, but such policy is not so effective to control prices of drugs. Moreover, given that the medical insurance plan has significant impact on market expansion effect of innovative drugs, which can either enhance or reduce pharmaceutical enterprises' willingness for pharmaceutical innovation, the government should reasonably match innovation incentive policies and medical insurance reimbursement scheme according to social and economic development goals, so as to improve the sustainability of innovation drug supply and achieve a “multi-win” situation for pharmaceutical enterprises, patients, medical insurance organization and the government.

Key words: market competition, innovation decision, innovation cost sharing, strategic innovation subsidy

摘要： 构建多阶段动态博弈模型,考察单纯市场机制、政府创新成本分摊和政府战略性创新补贴下,竞争市场中制药企业的最优创新决策,探究政府创新激励政策对药品价格、制药企业利润和药品市场配置的影响机制。研究发现:无论是否存在政府创新激励,两家制药企业的最优选择均为进行研发创新,尽管在某些条件下,研发创新可能导致两家制药企业陷入囚徒困境的局面;政府战略性创新补贴能够引导制药企业的创新投资实现社会最优配置,而单纯市场机制和政府创新成本分摊,在多数情形下将导致制药企业创新投资的扭曲;政府创新成本分摊机制总是有助于提高制药企业的创新报酬,而政府战略性创新补贴能否提高制药企业的创新报酬取决于医保支付水平。特别地,当医保支付水平较高时,政府战略性创新补贴将损害制药企业的创新报酬;政府创新成本分摊和战略性创新补贴均能够提高药品市场的配置效率,但前者会推高创新药的价格,而后者可降低创新药价格。本文的研究结论对于政府创新激励政策的选择以及如何匹配政府创新激励政策和医保支付政策,平抑创新药价格、提高创新药供给的可持续性和增进药品市场配置效率具有一定的指导意义。

关键词: 市场竞争, 创新决策, 创新成本分摊, 战略性创新补贴