High pharmaceutical prices and over-prescribing of high-priced pharmaceuticals in Chinese hospitals has long been criticized. Although policy makers have tried to address these issues, they have not yet found an effective balance between government regulation and market forces.Our objective was to explore the impact of market competition on pharmaceutical pricing under Chinese government regulation.Data from 11 public tertiary hospitals in three cities in China from 2002 to 2005 were used to explore the effect of generic and therapeutic competition on prices of antibiotics and cardiovascular products. A quasi-hedonic regression model was employed to estimate the impact of competition. The inputs to our model were specific attributes of the products and manufacturers, with the exception of competition variables.Our results suggest that pharmaceutical prices are inversely related to the number of generic and therapeutic competitors, but positively related to the number of therapeutic classes. In addition, the product prices of leading local manufacturers are not only significantly lower than those of global manufacturers, but are also lower than their non-leading counterparts when other product attributes are controlled for.Under the highly price-regulated market in China, competition from generic and therapeutic competitors did decrease pharmaceutical prices. Further research is needed to explore whether this competition increases consumer welfare in China’s healthcare setting.

ObjectivesTo evaluate the effects of the National Essential Medicine Policy (NEMP) on outpatient service utilization and expenditure in Tianjin, China.MethodsAll government-owned general primary health care centers (PHCs) within the Urban Employee Basic Medical Insurance in Tianjin were involved in the study. Of these, 49 PHCs implemented the NEMP in April 2009, and constituted the intervention group, and the remaining PHCs constituted the control group. Patients who had visited only one of the two groups at least once pre-NEMP (April 2008 to March 2009) and post-NEMP (April 2009 to March 2010) were included in the correspondent group. A difference-in-differences (DID) analysis was used to estimate the impacts adjusting for patients’ sociodemographic characteristics and health status. Sensitivity was tested using the propensity score matching method.ResultsA total of 23,362 and 4,148 patients from the intervention and control groups were identified, respectively. The patients in the intervention group were older (63.7 years vs. 58.8 years; P < 0.001) and in worse health status, as indicated by the Quan-Charlson comorbidity index (1.0 vs. 0.7; P < 0.001), than their counterparts in the control group. The DID results controlling for other confounders indicated that the annual outpatient visits, total annual expenditure, drug expenditure, and out-of-pocket expenditure per capita for the intervention group were not significantly different from those of the control group. Propensity score matching-adjusted DID regression models demonstrated similar results.ConclusionsThe China NEMP implementation did not affect the annual outpatient visits, total expenditure, drug expenditure, and out-of-pocket expenditure in the short term and the original policy goals were not met.