Impact of '4+7' volume-based drug procurement on the use of policy-related original and generic drugs: a natural experimental study in China

Objective To evaluate the impact of the first round of the National Centralized Drug Procurement pilot (so-called '4+7' policy) on the use of policy-related original and generic drugs. Methods A retrospective natural experimental design was adopted. Drug procurement data from the China Drug Supply Information Platform database were used, involving 9 '4+7' pilot cities in intervention group and 12 non-pilot provinces in control group. '4+7' policy-related drugs were selected as study samples, including 25 drugs in the '4+7' procurement list and their alternative drugs that have not yet been covered by the policy. '4+7' List drugs were divided into bid-winning and non-winning products according to the bidding results. Included drugs were sorted into original and generic products. Difference-in-difference method was employed to estimate the net effect of policy impact. Results After policy intervention, the DDDs (defined daily doses) of '4+7' List original drugs significantly reduced (beta=-39.10, p<0.001), while generic drugs increased (beta=40.43, p<0.01). 17.08% of the original drugs in DDDs were substituted by generic drugs. Prominent reduction was observed in the monthly expenditure of '4+7' List drugs ( yen 726.40 million) and overall policy-related drugs ( yen 654.47 million). The defined daily drug cost (DDDc) of bid-winning original and generic drugs, as well as non-winning original drugs, decreased by 44.44%, 79.00% and 15.10% (all p<0.01), while the DDDc of non-winning generic drugs increased by 64.81% (p<0.001). The use proportion of higher-quality drugs raised prominently from 39.66% to 91.93%. Conclusions '4+7' policy is conducive to generic substitution, drug price reduction and pharmaceutical cost-containment in China. The overall quality level of drug use of the Chinese population increased after policy intervention, especially in primary healthcare settings. However, the increased DDDc of non-winning generic drugs and alternative drugs should draw the importance of further policy monitoring.