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The Impacts of National Centralized Drug Procurement Policy on Drug Utilization and Drug Expenditures: The Case of Shenzhen, China

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  • Lei Chen

    (School of Health Sciences, Wuhan University, 115# Donghu Road, Wuhan 430071, China
    Global Health Institute, Wuhan University, 115# Donghu Road, Wuhan 430071, China
    These authors contributed equally to this work.)

  • Ying Yang

    (School of Health Sciences, Wuhan University, 115# Donghu Road, Wuhan 430071, China
    Global Health Institute, Wuhan University, 115# Donghu Road, Wuhan 430071, China
    These authors contributed equally to this work.)

  • Mi Luo

    (School of Health Sciences, Wuhan University, 115# Donghu Road, Wuhan 430071, China)

  • Borui Hu

    (School of Health Sciences, Wuhan University, 115# Donghu Road, Wuhan 430071, China)

  • Shicheng Yin

    (School of Health Sciences, Wuhan University, 115# Donghu Road, Wuhan 430071, China)

  • Zongfu Mao

    (School of Health Sciences, Wuhan University, 115# Donghu Road, Wuhan 430071, China
    Global Health Institute, Wuhan University, 115# Donghu Road, Wuhan 430071, China)

Abstract

In 2019, the Chinese government implemented the first round of the National Centralized Drug Procurement (NCDP) pilot (so-called “4 + 7” policy) in mainland China, in which 25 drugs were included. We conducted this study to examine the impacts of NCDP policy on drug utilization and expenditures, and to clarify the main factors contributing to drug expenditure changes. This study used drug purchasing order data from the Centralized Drug Procurement Survey in Shenzhen 2019. Drugs related to the “4 + 7” policy were selected as study samples, including 23 “4 + 7” policy-related varieties and 15 basic alternative drugs. Driving factors for drug expenditures changes were analyzed using A.M. index system analysis (Addis A. & Magrini N.’ method). After the implementation of the NCDP policy, the volume of “4 + 7” policy-related varieties increased by 73.8%, among which winning products jumped by 1638.2% and non-winning products dropped by 70.8%; the expenditures of “4 + 7” policy-related varieties decreased by 36.9%. Structure effects (0.47) and price effects (0.78) negatively contributed to the increase in drug expenditures of “4 + 7” policy-related varieties, while volume effects (1.73) had positive influence. NCDP policy successfully decreased drug expenditures of “4 + 7” policy-related varieties with structure effects playing a leading role. However, total drug expenditures were not effectively controlled due to the increasing use of alternative drugs.

Suggested Citation

  • Lei Chen & Ying Yang & Mi Luo & Borui Hu & Shicheng Yin & Zongfu Mao, 2020. "The Impacts of National Centralized Drug Procurement Policy on Drug Utilization and Drug Expenditures: The Case of Shenzhen, China," IJERPH, MDPI, vol. 17(24), pages 1-11, December.
    • Handle: RePEc:gam:jijerp:v:17:y:2020:i:24:p:9415-:d:462652
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    1. Amarawan Pentrakan & Cheng-Chia Yang & Wing-Keung Wong, 2021. "How Well Does a Sequential Minimal Optimization Model Perform in Predicting Medicine Prices for Procurement System?," IJERPH, MDPI, vol. 18(11), pages 1-17, May.
    2. Qian Xing & Wenxi Tang & Mingyang Li & Shuailong Li, 2022. "Has the Volume-Based Drug Purchasing Approach Achieved Equilibrium among Various Stakeholders? Evidence from China," IJERPH, MDPI, vol. 19(7), pages 1-22, April.
    3. Yuanyuan Hu & Shouming Chen & Fangjun Qiu & Peien Chen & Shaoxiong Chen, 2021. "Will the Volume-Based Procurement Policy Promote Pharmaceutical Firms’ R&D Investment in China? An Event Study Approach," IJERPH, MDPI, vol. 18(22), pages 1-21, November.

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