The impact of National Centralized Drug Procurement policy on the use of policy-related original and generic drugs in public medical institutions in China: A difference-in-difference analysis based on national database
Authors: Wang Jing , Yang Ying , Xu Luxinyi , Shen Yuan , Wen Xiaotong , Mao Lining , Wang Quan , Cui Dan , Mao Zongfu 
Published: June 2021

Objective

To evaluate the impact of the first round of the National Centralized Drug Procurement (NCDP) pilot (referred to as “4+7” policy) on the use of policy-related original and generic drugs.

Methods

Drug purchase data from the China Drug Supply Information Platform (CDSIP) database were used, involving nine “4+7” pilot cities and 12 non-pilot provinces in China. “4+7” policy-related drugs were included, which consisted of 25 “4+7” List drugs and 97 alternative drugs that have an alternative relationship with “4+7” List drugs in clinical use. “4+7” List drugs were divided into bid-winning and non-winning products according to the bidding results. Purchase volume, purchase expenditures, daily costs were selected as outcome variables, and were measured using Defined Daily Doses (DDDs), Chinese Yuan (CNY), and Defined Daily Drug cost (DDDc), respectively. Difference-in-Difference (DID) method was employed to estimate the net effect of policy impact.

Results

After policy intervention, the DDDs of original drugs among “4+7” List drugs significantly reduced by 124.59%, while generic drugs increased by 52.12% (all p-values <0.01). 17.08% of the original drugs in DDDs were substituted by generic drugs. Prominent reductions of 121.69% and 80.54% were observed in the expenditure of original and generic drugs, with a total cost-saving of 5036.78 million CNY for “4+7” List drugs. The DDDc of bid-winning original and generic drugs, as well as non-winning original drugs, significantly decreased by 33.20%, 75.74%, and 5.35% (all p-values <0.01), while the DDDc of non-winning generic drugs significantly increased by 73.66% (p<0.001). The use proportion of bid-winning products and non-winning original drugs raised prominently from 39.66% to 91.93%

Conclusions

“4+7” policy promoted the substitution use of generic drugs against original drugs, which conducive to drug costs saving. The overall quality level of drug use of public medical institutions significantly increased after “4+7” policy, especially in primary medical institutions.

Strengths and limitations of this study

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The “4+7” policy is the first policy attempt of volume-based drug procurement work at the national level in China, and is a pioneering work in the reform of Drug Supply and Guarantee System in China. This study aimed to explored the effect of this policy on original and generic drug use in China.

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This study used data of national database – China Drug Supply Information Platform (CDSIP). The monthly drug purchase data of nine pilot cities and twelve non-pilot provinces in mainland China were analyzed.

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This study used Difference-in-Difference analysis to evaluate the policy effect.

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The findings based on drug purchase data rather than drug use data in the present study might limit the interpretation and extrapolation of research results.