BACKGROUND: China's National Reimbursement Drug List(NRDL) undergoes yearly dynamic adjustments, employing value assessment and price negotiation mechanism for innovative drugs. Unlike regions utilizing Health Technology Assessment (HTA) and pharmacoeconomic evaluations for drugs' reimbursement decisions, the annual treatment cost of drugs is one of the factors considered in the economic value assessment of drugs' entry to NRDL in China.

OBJECTIVES: The logistic regression model was employed to investigate the impact of annual drug costs on the likelihood of catastrophic household expenditures under the current level of medical insurance treatments in China.

METHODS: The dependent variable in the model was the likelihood of catastrophic healthcare expenditure. The independent variable was the annual treatment cost of the drug, while covariates included the deductible, co-payment ratio, and cap line, which reflect the level of medical insurance benefits. The likelihood-ratio test and Hosmer-Lemeshow test were used to test the model’s goodness of fit. An marginal effect analysis was conducted to investigate the annual cost values that have the greatest impact on the likelihood of catastrophic expenditures.

RESULTS: Logistic regression results showed for each unit increase in annual drug costs present a higher risk of experiencing catastrophic household expenditure(OR:1.068 CI 95%: 1.03-1.11, p < 0.001). The marginal effect was greatest when the annual cost reached 320,000 RMB, with a value of 0.0114 (CI: 0.006-0.017, p < 0.001), and when annual cost reached 380,000RMB, the predicted probability of catastrophic expenditure occurring exceeded 50% (CI: 0.40, 0.60, p < 0.001), which indicating the upper limit of the annual drug cost threshold in China.

CONCLUSIONS: Taking annual treatment costs into the value framework for drugs' reimbursement decisions, based on China's medical insurance system and benefit levels, could provide significant financial protection for patients.