Presentation (CTI)

OBJECTIVES: China’s National Volume-Based Procurement program centrally tenders selected off-patent molecules. Winning products receive contracted purchase volumes at discounted prices, while competing same-molecule non-winning products may remain available outside the contracted volume. We assessed how tender waves 2-5 affected procurement prices and first-year public procurement spending.
METHODS: We analyzed monthly hospital procurement records from 29 Chinese provincial-level regions in mainland China during 2019-2022 for five therapeutic areas. The analytic unit was the product-province-month cell, where products were firm-specific presentations of molecules. Prices were standardized as defined daily cost, measured in Chinese yuan per defined daily dose. We estimated log-price effects using cohort-stacked difference-in-differences models that exploited staggered rollout across molecules, with not-yet-treated molecules as controls. Estimated price effects were mapped to one-year procurement spending under fixed-share and realized-reallocation scenarios.
RESULTS: Defined daily cost decreased by 58% among winning products and by 10% among non-winning products. Spillover reductions among non-winning products were larger for branded products and in provinces with explicit benchmark rules. Baseline spending for the studied waves and therapeutic areas was 2.82 trillion Chinese yuan. Estimated first-year savings were 779.9 billion Chinese yuan (27.7%) under fixed market shares and 1.04 trillion Chinese yuan (36.9%) after observed spending reallocation toward winning products.
CONCLUSIONS: China’s National Volume-Based Procurement program was associated with large direct price reductions for winning products and smaller but meaningful spillover reductions for competing non-winning products. Multi-winner tendering with benchmark-based implementation may generate substantial procurement savings beyond contracted products.