Government Subsidy Strategies for Biosimilars R&D Based on Dynamic Game Theory

In order to develop the biomedical industry, government subsidy of biosimilars is an incentive policy which has been used by the government. Different government subsidy strategies have an impact on drug price, consumer surplus, social welfare, the income of biosimilars enterprises and the demand of biosimilars, which have been deeply analyzed through backward induction of the dynamic game theory. The analysis shows that the price coefficient and the influence of the subsidy on demand will affect the choice of government subsidy strategies. It is concluded that under different subsidy strategies, consumer surplus, social welfare and the income of biosimilars enterprises are positively correlated with the amount of subsidy per unit product. This paper provides a decision-making basis for developing government subsidy strategies scientifically.