A study on the application of game theory modeling in the analysis of pharmaceutical price elasticity

Abstract

Abstract Setting reasonable drug prices is the fundamental goal of drug price elasticity analysis, and the game theory method can play a role in drug pricing by analyzing the behaviors of multiple game subjects to give a plan that meets the best interests of all parties. The optimal pricing strategies under different threshold conditions are summarized by establishing four model assumptions and solving them based on the basic model of game theory and the bidding process. Accordingly, the drug pricing of Pharmaceutical Company F was analyzed, and it was found that its optimal pricing was 21.3yuan, at which time the profit was 132.74% higher than the original pricing profit. After applying this pricing, it was found that the implementation of the new pricing increased the mean score of the company’s profitability by 0.16738 to 0.19504 as compared to before the optimized drug pricing strategy, indicating that the pricing strategy improved by the game theory model is able to provide the company’s level of profitability and is feasible.