Pharmaceutical Price Regulation: Macro-Level Evidence from China between 1997 and 2008

Changes in use of antidiabetic medications following price regulations in China (1999–2009)

“…To reduce the burden of high pharmaceutical expenditures on households, China has employed drug formularies, patient cost sharing and pharmaceutical price controls . The National Development and Reform Commission (NDRC) of China has implemented 30 rounds of reductions in maximum retail prices of medicines since 1997 (by between 5% and 60%) . Each round of regulation was intended to reduce pharmaceutical expenditures by between 12 and 700 million Chinese yuan (∼US$1.9 and $110 million) .…”

“…Some have argued that this approach may have led manufacturers to take some price‐regulated products off the market or modify formulations of regulated products into ‘new’ products not affected by price regulations. Further, hospitals and physicians may have been motivated to stock and prescribe products with higher profit margins (such as products without price caps and those that are relatively more expensive) . Objective data on the intended and unintended consequences of drug price controls in China are limited.…”

“…[4,6] The National Development and Reform Commission (NDRC) of China has implemented 30 rounds of reductions in maximum retail prices of medicines since 1997 (by between 5% and 60%). [7] Each round of regulation was intended to reduce pharmaceutical expenditures by between 12 and 700 million Chinese yuan (~US$1.9 and $110 million). [2] Manufacturers could apply for 'separate pricing' of new and special products in the National Drug Catalogue of Basic Medical Insurance and Work-related Injury Insurance (coverage/formulary available online in Chinese at: http://www.molss.gov.cn/gb/zt/ ypml/ypml.htm) for which they sought higher retail prices.…”

“…Further, hospitals and physicians may have been motivated to stock and prescribe products with higher profit margins (such as products without price caps and those that are relatively more expensive). [1,2,4,7] Objective data on the intended and unintended consequences of drug price controls in China are limited.…”