OBJECTIVES: The roles of regulation and competition in the pharmaceutical market have always been controversial issues in the academia and within policy establishment. In the past 20 years, China placed directly strict government control on pharmaceutical pricing. A new policy which required deregulation on drug prices was introduced in China in 2015. The objective of this study was to examine the impact of this reform on the access to medicines drawing on Chinese experience. METHODS: Based on product-level panel data, a fixed effect regression model was employed by using procurement records from provincial centralized purchase platform in Shandong, China from 2012 to 2017. Outcome was measured by the price per defined daily dose (DDD). The market competition measures distinguished generic competition within the same molecule from therapeutic competition within the same therapeutic class. RESULTS: The drug prices presented an increasing trend with certain volatility during the observation period, especially after the pharmaceutical pricing reform in 2015. The median of prices (ln) was 2.917 (Q1:1.308, Q3:4.981) before the reform and 3.3030 (Q1:1.53, Q3:5.013) after the policy. The price deregulation policy exerted short-run effects on medicine prices, increasing them by 0.287 points. The prices were inversely related to the number of generic competitors, but positively related to the number of therapeutic competitors. CONCLUSIONS: China’s price deregulation policy was associated with an increase in the short term of medicine prices. Competition from generic competitors played an essential role in the price control during this process.