OBJECTIVES: Volume-based drug procurement program was proposed in China last year, as a national strategy to optimize drug pricing. This study aimed to describe the rationales behind this pilot program and its potential impact on relevant stakeholders.

METHODS: The official government websites, including General Office of the State Council of China and Nation Healthcare Security Administration websites, were browsed to capture the information related to regulations and procedures of this program. Grey literature was searched to understand the preliminary outcomes after its implementation.

RESULTS: Volume-based procurement consists of forming a cross-regional purchasing alliance during the drug centralized purchasing process, thus decreasing drug price due to the expansion of drug purchasing volume. Competitive bidding and negotiation procedure ensure that the manufacturers offering the lowest price win the opportunity for drug supply. Pilot programme initiated in January 2019 involved 4 municipalities and 7 key cities (so called “4+7 centralized procurement”) with 25 (22 generic and 3 original) drugs selected for bidding. It expanded to include 26 regions of mainland China in September 2019, in order to reduce the medical tourism to pilot cities. An average of 59% decrease in drug price for 25 selected drugs was achieved, the prices of drug targeting chronic disorders, such as cardiovascular diseases, represented the most significant decrease. Volume-based procurement was crucial strategy to control the consistently growing health expenditure in China. It urged manufacturers to minimize the unnecessary cost and transfer their attentions from drug promotion to the development of innovative drugs. Additional considerations are needed to prevent the risk of supply shortage and guarantee the good quality of selected drugs at lower price.

CONCLUSIONS: Volume-based procurement holds great promises to significantly reduce the healthcare expenditure and improve patient access to drugs with reduced prices. However, its long-term impacts on the treatment outcomes of patients remained inconclusive.