Price offers of pharmaceutical procurement in China: evidence from Guangdong province

Abstract

Using a sample from the pharmaceutical procurement in Guangdong, China, over the period from 2007-2009 and a data set of comprehensive potential bidders, this article analyzes the determinants of bidding behaviors in the presence of sample selection. Bidding patterns between highly competitive and less competitive groups are also examined. Price differentials are further decomposed to explain factors that account for the gap. We find that a high level of competitiveness and more winning experiences induce manufacturers to behave aggressively and make lower bids. Moreover, bidders in a less competitive group are less sensitive to the number of potential bidders and the experience of past wins. The decomposition results indicate that the characteristics of bidders are not the main driver for the large price differentials between those groups.

The Impact of Pharmaceutical Electronic Bidding Procurement on Prices of Medicines: A Systematic Review

“…Included studies were published from January 1 st 2012 to December 31 st 2021 and were written in English. The geographical distribution of the studies included 3 studies from the Slovak Republic [25][26][27] , 1 in Brazil [28] , 1 in Czech [27] , 4 in China [13,[29][30][31] , 1 in South Africa [32] , 1 in Cyprus [33] , 1 in Chile [34] , 1 in European countries [35] and 1 in India [36] .…”

“…Most of the articles (n=12) were quasi-experimental studies [13,[25][26][27][28][29][30][31][32][33][34][35][36] and one was a two cross-sectional study [30] . Nine of the 13 studies showed the evaluation of only the e-bidding system without a comparison system [13,[26][27][28][29][30][31][32][33][34][35] .…”

“…Most of the articles (n=12) were quasi-experimental studies [13,[25][26][27][28][29][30][31][32][33][34][35][36] and one was a two cross-sectional study [30] . Nine of the 13 studies showed the evaluation of only the e-bidding system without a comparison system [13,[26][27][28][29][30][31][32][33][34][35] . There were four studies with comparison systems: Two studies comparing with negotiation system [25,27] , one study comparing with non-government procurement systems [36] and another one comparing with zero mark-up drug policy [13] .…”

“…The findings showed different results from country to country. The proportion of drug purchase price saving in seven included studies varied from 7.24 % to 40 % [25][26][27][28][29][30][31][32][33][34][35][36] , as shown in Table 1. These results supported hypothesis 1.…”

Determinants of drug prices: a systematic review of comparison studies

“…In individual studies, systems allowing for mark-ups (eg, processing costs or profit passed on to purchaser), degree of market competitiveness, the generics market proportion and degree of governmental intervention (reference pricing and education about efficacy of generics) have been found to influence drug prices in some countries. [14][15][16][17][18][19] A systematic analysis of modifiable drug price determinants that are published in drug price comparison studies is, however, missing. Therefore, in this systematic review, we aim to identify determinants of drug prices and more specifically modifiable determinants that may serve as potential targets for drug price optimisation.…”