OBJECTIVES: To explore the impact of market competition on pharmaceutical pricing, and to further investigate the determinants of pharmaceutical price in Chinese pharmaceutical market. METHODS: Anti-infective pharmaceutical data were extracted from inpatient claims in Tianjin Urban Employee Basic Medical Insurance (UEBMI) database from 2006 to 2010. Based on product-quarter data, a quasi-hedonic regression model was used to estimate the impact of market competition, which is defined by generic competition (the number of manufacturers within the same generic market) and therapeutic competition (the number of molecules in the ATC3 therapeutic category). The inputs to our model were specific attributes of the products and manufacturers, with the exception of competition variables. Defined daily dose (DDD) was used as the standard quantity unit and the price per DDD was used as the price unit. RESULTS: Our results indicated that pharmaceutical prices were inversely related to the number of generic competitors, but positively related to the number of therapeutic competitors. The prices of patent drugs and the off-patent drugs from original manufacturer were significantly higher than the prices of generic drugs. We also found the positive relationship between DDD and price, and the negative relationship between pack size and price which implied that manufacturers compete on volume discounts on large pack size. In addition, product age was inversely related to product price. In terms of manufacturers’ attributes, the results suggested that the prices of products imported by the foreign manufacturers and produced by joint-venture firms were higher than those of products from local manufacturers, and the prices of products from domestic 100 top-selling manufacturers were lower than those of products from non-top 100 local manufacturers. CONCLUSIONS: Generic market competition still plays an important role in determination of regulated pharmaceutical prices in China. The drug attributes, manufacturers’ attributes and market competition are jointly determined pharmaceutical price.