OBJECTIVES: Since 2009, Chinese government has constructed essential medicines policy of centralized purchasing, uniform distribution, compulsory use and “zero-mark-up” (i.e. no-profit) sale for essential medicines in primary care, but the policy does not regulate the drugstore. As a result, competition relationship between drugstore and primary care has changed in rural China. This study aims to investigate the competition relationship between drugstore and primary care in rural China. METHODS: We collect information of treatment procedure of 1015 patients from 18 villages at three counties of Shandong Province in China with different economic and geographical environment from January to May 2015 by the household investigation, supported by National Natural Science Foundation of China [Grant Number 71203124]. Competition relationship between drugstore and primary care is measured as growth rate of the number of drugstore and primary care. The indicator of patients’ treatment choice is proportion rate of purchasing pharmaceuticals channel. The relationship between competition relationship and patients’ choice is identified by interviews with stakeholders such as the leader of County Health Bureau and primary care. RESULTS: From 2010 to 2014, the number of drugstore in poorest and richest County has increased respectively 2.43 times and 0.18 times. However, the number of primary care keeps unchanged. At the same time, the treatment choice of patients including village clinic(46.31%), drugstore(22.17%), county hospitals(7.49%), township hospitals(6.60%) and other hospitals(17.44%) . Drugstore has become the second biggest pharmaceuticals sale channel in rural china. The reason for this issue is the limit of only using essential medicines by no-profit sale for primary care but not for drugstore. CONCLUSIONS: Essential medicine policy has changed the competition relationship of pharmaceutical market in rural China, which affects treatment choice of patients. The treatment choice of patients is threatening the development of essential medicine in rural China. Keywords: essential medicine; competition; drugstore; primary care