Green pharmaceutical supply chain coordination considering green investment, green logistics, and government intervention

Despite their important role in the fight against global climate change, the coordination of green pharmaceutical supply chains (GPSC) has rarely been studied. To fill this research gap and realize the optimal green performance of GPSC, this study aimed to investigate the coordination of a GPSC considering green investment, green logistics, and government intervention. Using a game-theoretic approach, we establish decision models and analyze the equilibrium strategies in several GPSC scenarios. A linked two-part tariff (LTPT) contract is proposed for the coordination of the GPSC. In addition, we explore the many important implications of changes in the parameters. This research shows that, under different conditions, governments should reasonably implement different interventions in order to promote the positive global performance of GPSC. Government intervention can increase the benchmark height and make more room for green improvement. The proposed LTPT contract can assist in the realization of GPSC coordination, obtain a greater consumer surplus, and achieve optimal green performance. Higher flexibility-influence coefficients of green degree on costs are conducive to the emission reductions and sustainable development of GPSC. Moreover, cultivating green preference in the market can save the government expenditures on subsidies. When the green investment coefficient of a GPSC is larger, the GPSC members lack motivation for green improvement, and the government needs to provide more subsidies rather than taxes in order to improve the green degree of the GPSC. Increased rewards from the government to the pharmaceutical manufacturer and the TPLSP will reduce the subsidies for the pharmaceutical retailer. Government intervention influences the scope of an LTPT contract. The findings provide rich managerial insights and implications for the GPSC policymakers and decision-makers in achieving sustainability goals.