How much could be saved in Chinese hospitals in procurement of anti-hypertensives and anti-diabetics?

Abstract

Background: Efficient use of government funding has been increasingly relevant for the success and sustainability of ongoing health-system reform in China; however, as there is no generic substitution policy, patients and basic health-insurance programs pay more for public-preferred brand originators. Such phenomenon is especially typical in public hospitals. The objective of this study is to estimate the potential cost savings in procurement by Chinese public hospitals when switching from brand originators of anti-hypertensive and anti-diabetic medications to their generic equivalents between 2012–2014.Method: IMS Health volume and value consumption data (IMS China Hospitals Audit system 2012–2014) were used, which covered all Chinese hospitals with 100 beds and above. The top 60% IMS volume consumption of respective anti-hypertensive and anti-diabetic medication with unique dosage form and strength were included. The potential cost savings were calculated from a switch of brand originators with their generic equivalents on the Chinese and international market. An independent sample t-test was conducted to compare the difference of proportion of cost savings in value between the Chinese and international market.Results: An average of 44% (US$44 million) and 87% (US$90 million) and a total of US$1.4 and 2.8 billion (2014 US$) could be saved from a switch from originator brand anti-hypertensives and anti-diabetics to domestically and internationally available generic equivalents, respectively. The differences of cost savings (in proportion) between domestic and international market were statistically significant (α = 0.005, p = 0.003, p = 0.002, p = 0.000).Conclusion: Expensive brand originators dominated the anti-hypertensive and anti-diabetic market in Chinese hospitals between 2012–2014. Preference of brand originators wastes a huge amount of health resources in China and these limited resources could have been used more efficiently. As one of the world’s key generic suppliers, if China wants to use its health resource more efficiently on medicines, comprehensive measures are needed to address both demand-side (consumers’ low trust in the quality of local generics) and supply-side barriers (health professionals’ preference of brand originators).