Effects of Volume-Price Contracts on Pharmaceutical Prices: A Retrospective Comparative Study of Public Hospitals in Hubei of China

Systematic review of the impact of the National Medication Price Negotiated Policy on the accessibility of drugs in China, 2016-2024

OBJECTIVE

To alleviate the economic burden of innovative drugs on patients in China, the government has been negotiating drug prices since 2016 to enhance their accessibility. This systematic review aimed to discuss the impact of the National Medication Price Negotiation Policy (NMPNP) on the accessibility of drugs in China in the years 2016-2024.

DESIGN

Systematically reviewed the studies' findings and evaluated their quality using the Newcastle-Ottawa Scale (NOS) collaborative tool. The Preferred Reporting Items for Systematic Reviews and Meta-Analyses 2020 were used to facilitate transparent and complete reporting of our systematic review.

DATA SOURCES

PubMed, Web of Science, CNKI and Wanfang were searched from 1 January 2016 to 1 October 2024.

ELIGIBILITY CRITERIA FOR SELECTING STUDIES

The inclusion criteria of this study is a quantitative study to evaluate the accessibility of negotiated drugs after the implementation of the NMPNP.

DATA EXTRACTION AND SYNTHESIS

Two researchers independently searched the literature, extracted the data and cross-checked them. Any disagreements were resolved by discussion or consultation with a third party. The quality of systematic reviews was assessed using the NOS.

RESULTS

A total of 32 studies were included in this review, 8 of the studies were assessed to be high quality based on the NOS, 17 as moderate quality and the remaining 7 as low quality. Most of them showed that after the implementation of the NMPNP, the availability, affordability, defined daily doses, hospital purchase volume and expenditure of negotiated drugs increased, and the price and defined daily dose cost of negotiated drugs decreased. However, a few studies found that some drugs are difficult to be admitted to hospitals and consumption dropped after the implementation of the NMPNP due to low clinical demand and weak competitiveness.

CONCLUSIONS

The implementation of NMPNP improved drug accessibility for patients and most regions had good implementation effects which can provide some insights for other countries. However, the high utilisation of successfully negotiated drugs has increased health insurance expenditures, potentially affecting the fund's stability. This necessitates government regulation of both the use of these drugs and health insurance funds. Moreover, different regions and medical institutions had different development levels and resource allocations, resulting in uneven effects of the NMPNP which need to be improved in the future.

The impact of Chinese volume-based procurement on pharmaceutical market concentration

Objectives

Optimizing the pharmaceutical industrial structure is the key mission of China's healthcare reform. From the industrial structure perspective, this study empirically evaluated the impact of China's national volume-based procurement (NVBP) policy on market concentration in the hospital-end drug market.

Methods

This study used drug procurement data of China's public medical institutions which obtained from the national database. A quasi-natural experiment was designed involving eleven pairs of matched treatment-control region combinations, with NVBP policy as the intervention measure. The market was defined by drug name (molecular boundary) and city/province (geographical boundary). Market changes were measured from three dimensions: the number of enterprises and products, market share, and Herfindahl-Hirschman index (HHI). Dual comparison approach and difference-in-difference (DID) method with fixed effect model were applied to quantify policy impacts.

Results

The number of enterprises and products decreased by 18 and 83 in pilot regions after NVBP policy, far more than the decreases in control regions (6 and 21). The accumulative market share of 15 bid-winning enterprises increased by 53.67% in volume and 18.79% in value, among which the increment of enterprises with low baseline market share was more prominent (66.64% and 36.40%). Among three enterprise types, the market share of generic consistency evaluation (GCE) certificated generics significantly increased, GCE uncertificated generics significantly decreased, and originators slightly decreased. DID models indicated significantly positive impact of NVBP policy on market concentration, with HHI-volume and HHI-value increasing by 49.33% (β = 0.401, p < 0.01) and 21.05% (β = 0.191, p < 0.01).

Conclusion

The implementation of NVBP promoted the intensive drug circulation and supply of Chinese public hospitals, intensifying the exit of GCE uncertificated generics from the hospital-end market. NVBP combined with GCE standards significantly improved market concentration, which brought a positive signal of pharmaceutical industrial structure optimization in China. In the future context of normalized and institutionalized NVBP, the balance should be further sought between low drug prices and reliable hospital drug supply, sustainable industry development.

Impact of China's National Volume-Based Procurement on Drug Procurement Price, Volume, and Expenditure: An Interrupted Time Series Analysis in Tianjin

BACKGROUND

National Volume-Based Procurement (NVBP) program has been carried out in China to lower drug prices and reduce patients' medication burden. This study aims to evaluate its impact on drug purchasing in Tianjin city, one of the first 11 cities piloting NVBP in China.

METHODS

Using monthly drug procurement data from Tianjin Medical Purchasing Center between 2018 and 2020, this study identified bid-winning drugs and their alternative drugs in the pilot NVBP, and evaluated the policy impacts on their procurement price (cost of defined daily dose, DDDc), volume (the number of defined daily dose, DDDs), and expenditure, during the first (initiated at April 1, 2019) and second (initiated at April 25, 2020) procurement cycles of pilot NVBP, applying interrupted time series (ITS) analysis. Included drugs were classified into 12 pharmacological subgroups for further analysis.

RESULTS

Decrease in DDDc of NVBP-covered drugs (bid-winning and non-winning drugs) were observed in the first (level change: -CNY 3.878/DDD, P<.001; trend change: -CNY 0.068/DDD, P=.001; relative change: -61.55%) and second (level change: -CNY 0.356/DDD, P=.049) procurement cycles of pilot NVBP, while no significant change was observed for the DDDc of alternative drugs, except for the increase in antidiarrheic and anti-inflammatory/antirheumatic subgroups as more expensive drugs were purchased from new suppliers in the second procurement cycle. The DDDs of bid-winning drugs significantly increased, while decreased for the non-winning original and generic drugs. Procurement expenditure was saved for NVBP-covered drugs (level change: -CNY 7.29×107, P<.001; trend change: -CNY 5.62×106, P<.001; relative change: -62.60%). However, during the second procurement cycle, procurement volume and expenditure of alternative drugs increased significantly in 7 out of 12 subgroups.

CONCLUSION

The pilot NVBP policy in China reduced procurement price, promoted generic substitution, and saved procurement expenditure. However, the increase in procurement price, volume and expenditure of alternative drugs may reveal the significance of regulating healthcare institutions' drug purchasing behavior.

Effects of volume-based procurement policy on the usage and expenditure of first-generation targeted drugs for non-small cell lung cancer with EGFR mutation in China: an interrupted time series study

OBJECTIVES

In December 2018, China launched national volume-based procurement (NVBP) to negotiate drug prices with manufacturers. Gefitinib was one of the 25 pilot drugs, which is used for treatment of non-small cell lung cancer. Lung cancer is the most common type of cancer in China and targeted drugs like gefitinib have been proven to provide clinical benefits to patients. This study aims to explore the impact of NVBP policy on the usage and expenditure of anticancer drugs.

METHODS

Gefitinib and alternative drugs (icotinib and erlotinib) were used as objects of study. Quarterly data from the China Hospital Pharmaceutical Audit database in 9454 hospitals in China were used for analysis. Descriptive analysis was conducted using purchase volume and expenditure as variables. Interrupted time-series (ITS) analysis was applied to further analyse the effect of NVBP policy on the medicines under study.

RESULTS

During the 12-month period before (2018Q2-2019Q1) and after (2019Q2-2020Q1) the NVBP policy, the total purchase volume of medicines rose from 4.48 million defined daily dose (DDD) to 7.02 million DDD, with an increase of 56.66%. Purchase volume of gefitinib and alternative drugs increased 100.61% and 14.88%, respectively. After the implementation of NVBP policy, procurement volume of alternative drugs decreased by 72 051 DDD (p value=0.044) and trend change decreased by 56 738 DDD (p value<0.01). The overall expenditure reduction was 14.7%, with the expenditure of gefitinib reducing by 38.47% and alternative drugs increasing by 10.70%. ITS analysis indicated statistically significant differences in level and trend changes for expenditure of total drugs and gefitinib.

CONCLUSIONS

The evidence provided in this study indicated that the implementation of NVBP policy was related to the expenditure reduction of the first generation of anti-EGFR lung cancer drugs. The policy effectively controlled the increase in expenditures for corresponding drugs while ensuring the use of drugs.

Intended and unintended impacts of the comprehensive reform of urban public hospitals: A mixed-method study in Hangzhou, China

Objectives

Public hospital reform is a key area in the Chinese healthcare system reform with the aim of controlling excessive growth of medical expenditures. This study aims to evaluate the impacts of two rounds of urban public hospital reforms respectively starting in 2018 and 2019.

Method

A mixed-method method was conducted in Hangzhou. In the quantitative phase, monthly data covering 7 provincial, 12 municipal, and 35 district hospitals from March 2017 to June 2020 was analyzed using a panel-interrupted time-series. Thematic content analysis was conducted using qualitative data collected from 32 in-depth interviews.

Results

Quantitative data showed a considerable reduction in the proportion of drug revenue (provincial hospitals: -4.937%; municipal hospitals: -2.765%; district hospitals: -2.189%) and an increase in the proportion of consumable (provincial hospitals: β ₂ = 2.025; municipal hospitals: β ₃ = 0.206) and examinations (provincial hospitals: β ₂ = 1.354, β ₃=0.159; municipal hospitals: β ₂ = 1.179) revenue after the first reform. In post-reform 2, The respective instant decrease and increase in the proportion of consumable (provincial hospitals: -2.395%; municipal hospitals: -0.898%) and medical services (provincial hospitals: 2.115%; municipal hospitals: -2.604%) revenue were observed. Additionally, quantitative and qualitative data indicated inpatient expenditures dropped considerably after the reform. However, insufficient compensation for medical services and increased financial pressure on hospitals were repeatedly mentioned as unintended consequences in qualitative interviews.

Conclusions

Overall, the urban public hospital reforms in China created positive effects in adjusting hospital revenue structure and constraining soaring medical expenditures. Unintended consequences remind policymakers to establish rational and dynamic compensation mechanisms for public hospitals.

The change of drug utilization in China’s public healthcare institutions under the “4 + 7” centralized drug procurement policy: Evidence from a natural experiment in China

Background: Improving drug accessibility and rational drug use are major challenges for China’s healthcare reform. In 2018, the Chinese government introduced a novel nationwide policy of centralized drug procurement for off-patent drugs, focusing on improving drug utilization patterns of public medical institutions.

Objective: To estimate the impacts of the Chinese centralized drug procurement policy (the so-called “4 + 7” policy) on drug utilization in public medical institutions.

Methods: A retrospective natural experimental design and difference-in-difference method were applied using cross-region data extracted from the national procurement database. Eleven “4 + 7” pilot cities (intervention group) and eleven non-pilot provinces (control group) were matched. In addition, “4 + 7” policy-related drugs (n = 116) were selected as study samples, including 25 drugs in the 4 + 7” procurement List (“4 + 7” List drugs) and their alternative drugs (n = 91) that have not yet been covered by centralized procurement policy. Then, the “4 + 7” List drugs were divided into bid-winning and non-winning drugs according to the bidding results, and they were sorted into generic and original drugs. Defined daily dose (DDD) was used to standardize the quantity of drugs used.

Results: In the 1-year procurement period, the overall completion rate of agreed procurement volume reached 191.4% in pilot cities. Owing to policy impact, the consumption increased by 405.31% in bid-winning drugs (β = 1.62, p &lt; 0.001) and decreased by 62.28% (β = −0.98, p &lt; 0.001) in non-winning drugs. The overall use proportion of bid-winning drugs increased from 17.03% to 73.61% with statistical significance (β = 1.48, p &lt; 0.001), and increments were also detected in all healthcare settings, regions, and anatomical therapeutic chemical (ATC) categories (all p-values &lt; 0.05). Generics and originators were detected with 67.53% increment (β = 0.52, p &lt; 0.001) and 26.88% drop (β = −0.31, p = 0.006) in consume volume. The use proportion of generics increased from 59.23% to 78.44% with significance (β = 0.24, p &lt; 0.001), as well as in tertiary hospitals (β = 0.31), secondary hospitals (β = 0.23), and primary healthcare centers (β = 0.11) (all p-values &lt; 0.001). The use proportion of relatively quality-guaranteed drugs (i.e. bid-winning and original drugs) increased from 56.69% to 93.61% with significance (β = 0.61, p &lt; 0.001), and similar increments were also detected in all healthcare settings, regions, and ATC categories (all p-values &lt; 0.05).

Conclusion: Healthcare providers demonstrated good compliance with the “4 + 7” policy in completing contracted procurement volume. Centralized drug procurement policy promoted drug consumption gradually concentrated on bid-winning drugs, generic drugs, and more importantly, quality-guaranteed drugs.

Changing Characteristics of Pharmaceutical Prices in China Under Centralized Procurement Policy: A Multi-Intervention Interrupted Time Series

Objective: National centralized drug procurement organized by the Chinese government currently represents the largest group purchasing organization worldwide, to establish a reasonable price formation mechanism. This study aimed to evaluate the effects of centralized procurement policy on drug price and price ratio in China.

Method: Monthly drug procurement data of public medical institutions were extracted from the national procurement database, including 11 pilot cities and 36 months from January 2018 to December 2020. Centralized procured INNs (International Nonproprietary Names) (n = 25) and their alternative INNs (n = 96) were selected as study samples. Centralized procured INNs were divided into bid-winning and non-winning products according to the bidding results. Drug price, price distribution, and price ratio were measured. Multi-intervention interrupted time series analysis was performed to estimate the policy impacts in two centralized procurement periods.

Results: The price of centralized procured INNs showed an immediate drop of 44.57% (β = -0.59, p < 0.001) at the policy implementation, among which bid-winning drugs decreased by 61.71% (β = -0.96, p < 0.001). No significant change in the price level or trends was found for non-winning products and alternative drugs in the first-year procurement period (all p-values > 0.05). During the second-year procurement period, alternative drugs in four therapeutic categories detected significant increases in the price level (all p-values < 0.05). The overall coefficient of variation of price distribution exhibited upward trends after policy implementation. Among the most centralized procured INNs, the price ratio between certificated generics (generics that have passed the consistency evaluation) and original drugs declined significantly after policy intervention (p < 0.05), whereas the price ratio between uncertificated and certificated generics increased significantly (p < 0.05).

Conclusion: Chinese government-organized group purchasing resulted in prominent price reduction of bid-winning drugs. The policy observed a short-term “spillover” effect of synergistic price reduction, while the effect wore off after 1-year procurement period. The extremely dispersed price distribution, as well as unreasonable price ratios, requires further effective price regulation means.

Antibiotic Use in China’s Public Healthcare Institutions During the COVID-19 Pandemic: An Analysis of Nationwide Procurement Data, 2018–2020

Background: The overuse of antibiotics is a serious public health problem and a major challenge in China, and China lacks up-to-date evidence on the nationwide antibiotic use in different healthcare settings. The changes of China’s antibiotic use under the COVID-19 pandemic are still unknown.

Objective: This study aimed to investigate the use of antibiotics in China’s public medical institutions based on a three-year nationwide surveillance and to examine the impact of the COVID-19 pandemic on China’s antibiotic consumption.

Methods: This study used nationwide drug procurement data from the China Drug Supply Information Platform (CDSIP). We retrospectively analyzed antibiotic procurement data of 9,176 hospitals and 39,029 primary healthcare centers (PHCs) from 31 provinces in mainland China from January 2018 to December 2020. Antibiotic utilization was measured by defined daily doses (DDDs) and DDD per 1,000 inhabitants per day (DID). Generalized linear regression models were established to quantify the impact of the COVID-19 pandemic on antibiotic use.

Results: The total antibiotic consumption among all healthcare settings increased from 12.94 DID in 2018 to 14.45 DID in 2019, and then dropped to 10.51 DID in 2020. More than half of antibiotics were consumed in PHCs, especially in central regions (59%–68%). The use of penicillins (J01C) and cephalosporins (J01D) accounted for 32.02% and 28.86% of total antibiotic consumption in 2020. During 2018–2020, parenteral antibiotics accounted for 31%–36% of total antibiotic consumption; the proportion is more prominent in central and western regions and the setting of hospitals. Access category antibiotics comprised 40%–42% of the total utilization. Affected by COVID-19, the antibiotic consumption was significantly dropped both in hospitals (β = −.11, p < .001) and PHCs (β = −.17, p < .001), as well as in total (β = −.14, p < .001). Significant increments were observed in the proportion of total antibiotics (β = .02, p = .024) consumed in hospitals (against the consumption in all healthcare settings), as well as parenteral antibiotics (β = 1.73, p = .001).

Conclusion: The consistent preferred use of penicillin and cephalosporin, as well as injections, among China’s public healthcare institutions should draw concern. China’s antibiotic consumption significantly declined during the COVID-19 pandemic, which brings opportunities for antibiotic use management in China.