OBJECTIVES: China has established a new national dynamic adjustment mechanism of drug formulary covered by the basic medical insurance. In addition to the decision on including or excluding drugs within the same Anatomical Therapeutic Chemical (ATC) category, may the budget constraint of medical insurance fund pressure the decision maker to consider cross-category competition is still understudied.

METHODS: On the basis of national basic medical insurance drug formulary issued during 2017~2021 and calculation of the number of drugs in each ATC category and corresponding year-on-year change, we proposed three methods to measure cross-category competition in basic medical insurance drug formulary. The first was the measurement of tradeoffs between the number of drugs in the two parts of drug formulary (general formulary and negotiated formulary), the second was the construction of approximate risk aversion index to describe cross-ATC category aversion, and the third was the minimum spanning tree method used to identify pivotally influential ATC categories.

RESULTS: Although the total number of drugs in negotiated formulary increased from 31 drugs in 2017 to 213 drugs in 2021, such changes, by ATC category, did not negatively associate with the change of number of drugs in the counterpart category of general formulary. Approximate risk aversion index suggested potential inclusion aversion of endocrinotherapy drugs and systemic antiviral drugs compared with the other ATC categories. The minimum spanning tree results showed the sustained superior influence of antineoplastic drugs under the network of cross-category elasticity.

CONCLUSIONS: Our study first empirically measured the cross-ATC category competition in Chinese basic medical insurance drug formulary. The evidence of cross-category competition ushered in an important area of concern for drug formulary dynamic adjustment decision.