OBJECTIVES: The main objective is to assess the impact of removing the price ceiling of short-supplied generic medicines on purchasing in Shandong province, China. With restrictive maximum price in China, some medicines, especially lower-priced drugs, were in short supply because pharmaceutical manufacturers restricted production below demand. In order to encourage drug companies to increase production, the government had issued policies to eliminate the price ceiling of short-supplied drugs. The policy, passed in March 2015, replaced the price ceiling of those medicines with a maximum daily average price (¥3 for chemical drugs and ¥5 for Chinese patent medicines) and wholesale prices for public hospitals can be set by manufacturers.

METHODS: This study uses interrupted time series analysis to measure the level change and trend change of short-supplied medicine purchased resulting from the policy intervention. The main outcome measures include total quantity purchased by public hospitals, total expenditures of money and quantity of different type of medicines. Data came from the Shandong drug centralized purchasing platform database, China, which covers all public hospitals in Shandong. Monthly drug purchasing data from March 2014 to March 2017 were used.

RESULTS: Following the implementation of policy, both total quantity of (level change -2290412.5, P=0.0259 and trend change 350825.6, P=0.0116) and spending on short-supplied drugs (level change -19010220, P=0.0218 and trend change 2683705, P=0.0157) had a reduced level change at the beginning of policy implementation and had a growth trend (277155.6 and ¥1881403 per month). Quantity of different type of medicines (level change -5.0461, P=0.8849 and trend change 13.9180, P=0.0161) increased significantly, at a rate of 12.5 per month.

CONCLUSIONS: The policy promoted purchasing of short-supplied drugs in public hospitals in Shandong.