Collective pharmaceutical procurement in China may have unintended consequences in supply and pricing

[Variability in Drug Procurement within Group 1B of the Pharmaceutical Specialized Scheme in Brazil]

In the Brazilian Health System (SUS), drugs covered by the Specialized Pharmaceutical Scheme (CEAF) receive federal funding and can be procured either centrally (Group 1A) or by individual states (Federal Units - UF) (Group 1B). Unlike other countries where national procurement prices are negotiated centrally by the government, public procurement in Brazil follows a public auction procedure, potentially resulting in varying purchase prices. To facilitate price comparisons, it is a legal requirement to register public acquisitions in the Health Prices Registry (BPS). This study aimed to assess the variability in the procurement prices for Group 1B drugs across the 27 Brazilian states during 2021. Data on the acquisitions of Group 1B drugs by the 27 Health Secretariats were obtained from the BPS. Drugs with no reported reimbursement prices as of December 2021 were excluded from the analysis. The total reimbursement amount for each state was sourced from the SUS Ambulatory Information System. The findings revealed significant variability in drug procurement prices both across and within states. The study underscored a potential disparity in CEAF access, favoring wealthier states (those with larger populations and higher economic status) by securing lower drug prices.

Improving access to medicines and beyond: the national volume-based procurement policy in China

Since 2019, the Chinese central government has taken significant steps to centralize national purchasing power and has implemented a pooled procurement system. In this paper, we provide an in-depth analysis of China's National Volume-Based Procurement (NVBP) policy, which represents a unique approach to pooled procurement within the pharmaceutical sector. The primary objectives of the NVBP are to reduce drug prices, enhance access to affordable medications, and improve the overall functioning of the pharmaceutical industry in China. Our analysis delves into the key features of the NVBP, including its centralized procurement system, volume-based procurement approach, and the guaranteed procurement volumes allocated to winning bidders. We also address the challenges and implications associated with the NVBP, such as its impact on the pharmaceutical industry, the sustainability of price reductions, and the importance of striking a balance between price reduction and industry sustainability. Through a comparative analysis, we shed light on the distinct characteristics of China's approach to pooled procurement and its potential ramifications for healthcare policies and practices. By examining the NVBP within the broader context of China's evolving healthcare landscape, we aim to contribute to a deeper understanding of the implications and effectiveness of this unique policy initiative.

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.

Impact of National Volume-Based Procurement on the Procurement Volumes and Spending for Antiviral Medications of Hepatitis B Virus

Introduction: Although persistent inhibition of HBV replication by antiviral therapy has shown to slow disease progression, cost-related access barriers to these essential medicines are becoming salient. The national volume-based procurement (NVBP) was piloted in China and led to substantial reduction in the list price of prescription drugs. To examine the impact of NVBP on selected antiviral medication costs per defined daily dose (DDD), procurement volumes, and spending. Methods: We employed an interrupted time series design to examine changes in cost per defined daily dose (DDD), procurement volumes, and spending for NVBP bid-winning antiviral medications (tenofovir disoproxil fumarate and entecavir) in 11 pilot cities from 2017 to 2020. Procurement transaction data were obtained from 9,454 hospitals in the Chinese Hospital Pharmaceutical Audit (CHPA) database. In the secondary analysis, the control group comprised two non-NVBP drugs (adefovir and lamivudine) procured in 11 cities not exposed to the NVBP. Results: Cost per DDD of the two hepatitis B virus (HBV) antiviral medications reduced by CNY1.598 (p = 0.002) immediately following the implementation of NVBP, dropping from an average cost of CNY16.483 per DDD at baseline to CNY6.420 at the end of the observation period. NVBP implementation resulted in a substantial reduction in daily costs of antivirals and an increase in monthly procurement volumes by 6.674 million DDDs (p = 0.017), while monthly spending was reduced by CNY138.26 million (p = 0.002). In the secondary ITS analysis with a control group, the average cost per DDD of the NVBP bid-winning antivirals declined by CNY4.537 (p < 0.001), monthly procurement volumes increased by 7.209 million DDDs (p = 0.002), and monthly spending dropped by CNY138.83 million (p < 0.001). Conclusion: Volume-based procurement piloted in China may be effective for reducing price and total expenditures and improving drug utilization, which is especially important for HBV patients who need constant access to antiviral therapies.

The impact of the reference pricing policy in China on drug procurement and cost

High drug costs are putting pressures on health care budgets and posing an obstacle for China to achieve universal coverage. Policies such as the direct price ceiling, and the Essential Medicines Program-with the Zero Markup Drug Policy (ZMDP) one key component-were implemented, coming out with limited evidence for a success. As a benchmark of China's recent health reform, Sanming city initiated the ZMDP in January 2013; and further piloted the first reference pricing (RP) policy in China in September 2014, with the intention to dis-incentivize the use of costly original drugs. In this study, we used hospital-based drug procurement data of 14 drug substances that were subjected to the RP, from four hospitals in Sanming and a neighbouring city Longyan, between 2012 and 2016. Adopting the difference-in-difference (DID) approach, we evaluated the impacts of the RP together with the ZMDP. On the one hand, we found that the ZMDP had no impact on drugs' procurement prices, volumes and costs. While on the other hand, we found that the introduction of RP was not associated with changes in unit prices for the 14 drugs in Sanming. However, the RP pilot was associated with a 25.9% [95% confidence interval (CI), 12.9-37.0%] decrease in monthly drug procurement volumes and a 47.7% (95% CI, 33.7-58.7%) decrease in the total drug costs. In particular, it reduced the procurement volumes of original drugs by 56.8% (95% CI, 47.0-64.7%). Subgroup analyses by hospital level and therapeutic class found similar results. We draw lessons for the Chinese government to experiment RP on a larger scale, considering the development and effective regulation of the generic market. This is a first report on the effects of RP in China, Asia and middle-income countries.

Evaluating Price and Availability of Essential Medicines in China: A Mixed Cross-Sectional and Longitudinal Study

Objectives: To evaluate the price and availability of medicines in China.

Methods: A standard methodology developed by WHO and Health Action International was used to collect medicine price and availability data. We obtained cross-sectional data for 48 medicines from 519 facilities (280 public hospitals and 239 private retail pharmacies) in five provinces in China in 2018. We also collected longitudinal data for 31 medicines in Shaanxi Province in 2010, 2012, 2014, and 2018. Medicine price was compared with the international reference price to obtain a median price ratio (MPR). The availability and price in five provinces were compared in matched sets. We used general estimating equations to calculate differences in availability and median prices from 2010 to 2018.

Findings: Mean availability of surveyed medicines in five provinces was low in both public (4.29–32.87%) and private sectors (13.50–43.75%). The MPR for lowest priced generics (LPGs) was acceptable (1.80–3.02) and for originator brands (OBs) was much higher (9.14–12.65). The variation was significant for both availability and price of medicines across provinces. In Shaanxi Province, the availability of medicines decreased between 2010 and 2018, but this was not significant in the public or private sector. Compared with 2010, the median adjusted patient price was significantly lower in 2018 for nine OBs (difference −22.4%; p = 0.005) and 20 LPGs (−20.5%; p = 0.046) in the public sector and 10 OBs (−10.2%; p = 0.047) in the private sector.

Conclusion: Access to medicines was found to be poor and unequal across China in 2018. Future interventions are needed, and possible strategies include effective and efficient procurement, promoting the development of retail pharmacies and increasing medicine price transparency.