Testing the unintended cost effects of health policies for generic substitutions: the case of China's National Volume-Based Procurement (NVBP) policy.

Abstract

Generic substitutions are globally considered to contain health expenditures. Yet it is uncertain whether the costs would spill over to other medicines or health services. Contextualizing China's National Volume-Based Procurement (NVBP) policy, which promoted generic substitution, this study tests the changes in patients' utilisation of generic medicines and whether the costs shift to other pharmaceutics or health services post-policy. This population-based, matched, cohort study uses claims data from Tianjin, China in 2018-2020. We focus on Amlodipine, the most commonly used calcium channel blocker with the largest volume. We build comparable post-policy cohorts: Non-switchers who kept using originator Amlodipine, Pure-switchers who loyally switched to generic Amlodipine, and Back-switchers who switched back-and-forth; and compare between each matched pair, respectively, of their annual healthcare costs and that broken down by components, and patients' use of and adherence to Amlodipine post-policy. 1185 Pure-switchers, 1398 Back-switchers, and 2330 Non-switchers are identified (mean age: 63.0 years; 58.5% men). For the matched pairs, Pure-switchers (N=772) incurred an annual total medical costs of CNY 9213.5, 12.2% lower than Non-switchers (N=1544, absolute difference CNY -1309.3, 95%CI: [-2645.8, -19.6]). The cost reduction only results from Amlodipine prescriptions in outpatient encounters, and are equally born on health plans and the enrolees. Pure-switchers and Non-switchers are not different in costs from other medicines, nor from other items including tests, surgeries, beds, and medical consumables for hypertension-related encounters/admissions. Pure-switchers had higher daily dosage and better adherence to Amlodipine than Non-switchers as well. The differences between Back-switchers and Non-switchers show similar trends but are less profound. China's NVBP policy is effective to control pharmaceutical costs. No unintended cost effects have yet been identified in the short run. Other countries may learn from China on the comprehensive sets of auxiliary policies, including listing, bidding, purchasing, and reimbursing, to better promote generic substitutions.