Lowering drug prices and enhancing pharmaceutical affordability: an analysis of the national volume-based procurement (NVBP) effect in China

Abstract

To cope with the increasing healthcare costs brought about by the universal health insurance programme, national volume-based procurement (NVBP) was implemented in China to reduce drug prices. However, the impact of NVBP remains unknown. We reported the effects of the NVBP pilot programme on medication affordability and discussed the challenges and recommendations for further reforms. A total of 25 molecules won the bidding in the NVBP pilot programme, and price cuts ranged from 25% to 96%. Medication affordability was measured as the number of days’ wages needed to pay for a course of treatment, and the medication was identified as affordable if the cost of a treatment course was less than the average daily wage. After the NVBP, the proportion of affordable drugs increased from 33% to 67%, and the mean affordability improved from 8.2 days’ wages to 2.8 days’ wages. Specifically, for rural residents, the proportion of affordable drugs increased from 13% to 58%, and the mean affordability improved from 15.7 days’ wages to 5.3 days’ wages. For urban residents, the proportion of affordable drugs increased from 54% to 71%, and the mean affordability improved from 5.9 days’ wages to 2.0 days’ wages. Implementing the NVBP substantially improved medication affordability. In future reforms, a multifaceted approach addressing all issues in the health system is needed to enhance medicine access.

Impact of ‘4+7’ volume-based drug procurement on the use of policy-related original and generic drugs: a natural experimental study in China

“…Volume-based drug procurement, also known as 'group purchasing', by integrating the procurement needs of all pilot cities, enhanced the negotiation power of hospitals and payers to maximise the price reduction of drugs. 10 Volume-price linkage was achieved under this procurement mechanism. 11 In the NCDP policy, only generic drugs that had previously passed the Generic Consistency Evaluation (GCE) and original branded drugs were eligible to be listed for procurement.…”

“…In the policy, unique measures, such as 'ensuring drug quality', 'achieving volume-price linkage' and 'encouraging generic substitution and rational use', were applied to achieve price cuts and improve medicine affordability with higher quality. [9][10][11] Twenty-five drugs in the '4+7' procurement list were successfully purchased with an average price reduction of 52%, of which 22 were generic drugs that passed the GCE and 3 were original drugs. 17 Worldwide, tendering for off-patent medicines and promoting generic substitution are effective ways to enhance market competition, which contribute to drug cost-containment.…”

“…9 Historically, in China, generic drugs were needed only for demonstrating comparable quality with the other marketed generic drugs, and the interchangeability between generic and brand-name drugs was unknown. 10 12 Since 2012, the GCE work was conducted and promoted by the National Medical Products Administration (NMPA) to ensure that generic drugs became equivalent to their corresponding original brand-name drugs, 13 14 and has made great strides. 15 The NMPA required that the 90% CI of the geometric mean ratio for main pharmacokinetic parameters, the peak concentration and the area under concentration time curve of the product fall entirely within the range of 80.00%–125.00% in order to be bioequivalent.…”

“…The highlight of this policy lies in the implementation of ‘volume-based procurement’. Volume-based drug procurement, also known as ‘group purchasing’, by integrating the procurement needs of all pilot cities, enhanced the negotiation power of hospitals and payers to maximise the price reduction of drugs 10. Volume–price linkage was achieved under this procurement mechanism 11…”

Impact of Volume-Based Drug Procurement Policy on Drug Use Structure of Chinese Public Medical Institutions: A Difference-in-Difference Analysis of Nine Pilot Cities and Twelve Non-pilot Provinces

“…The implementation of NCDP policy has achieved remarkable results in improving the accessibility of policy-related drugs [14][15][16], promoting the substitution use of generic drugs [17], and increasing overall drug use quality level of the public [18]. However, several previous studies reported an upward trend in the consumption of policy-related drugs after the implementation of NCDP policy [11,19], which should be concerned, especially for the incrased consumption of drugs have not been covered by NCDP policy.…”