Impact of the Pilot Volume-Based Drug Purchasing Policy in China: Interrupted Time-Series Analysis with Controls

Abstract

Background: Centralizing procurement for prescription drugs has the potential to reduce drug spending by creating economies of scale and by improving purchasing power. In March 2019, the Chinese government launched a volume-based purchasing (VBP) pilot program using a competitive bidding process to purchase high-quality generic drugs for which branded drug substitutes were available. We evaluated the impact of introducing the VBP pilot on drug purchase quantity and spending. Methods: We performed an interrupted time-series design to estimate the change in monthly drug purchase quantity and spending comparing fourteen months before and seven months after the VBP pilot. We obtained monthly prescription drug purchase data for all purchases from public hospitals in the three large pilot cities (Beijing, Shanghai and Xi’an) and two non-pilot cities (Changsha and Zhengzhou) between January 2018 to September 2019. We measured quantity and spending outcomes separately for the branded and generic substitutes that were selected in the VBP, and other drugs for the treatment of the same diseases. We evaluated heterogeneity of impact by pilot city, drug type, and therapeutic class (cardiovascular disease, mental disorder and cancer) separately. Findings: The VBP pilot in these three cities covered 60 million individuals. The implementation of the pilot reform was associated with a 132% (95%-CI: 104%-165%, p<0·001) increase in the purchase quantity of selected drugs in pilot cities compared to an 17% decrease (95%-CI: 9%-25%, p<0·001) in control cities. In contrast, the purchase quantity of branded and other drugs in pilot cities decreased by 38% (95%-CI: 27%-46%, p<0·001) and 77% (95%-CI: 71%-81%, p<0·001), respectively; while in control cities, these remained at similar levels. Overall, there was a 35% (95%-CI: 28%-41%, p<0·001) decrease in the purchase spending for all drugs in the first post-policy month, from 8·1 billion CNY estimated in the absence of VBP down to 5·3 billion CNY. The largest reduction in spending was in Shanghai and from drugs for the treatment of cardiovascular diseases. Interpretation: The evidence suggests positive impact of the VBP pilot in reducing the overall drug spending and increasing the use of high-quality generics in three pilot cities. This overall trend is not observed in two non-pilot cities. Assessment of long-term impact of the VBP policy is needed on various outcomes such as drug prescription and utilization patterns, patients’ health outcomes and spending. Funding: None to declare. Declaration of Interest: None to declare.