Effects of the National Essential Medicine System in reducing drug prices: an empirical study in four Chinese provinces

OBJECTIVES: The rapid increase in drug expenditure has become a major source of public criticism in China. In 2009, the National Essential Medicine System (NEMS) was launched in China to control drug prices and improve access to medicines. This study investigated whether and to what extent the prices of essential medicines were reduced after the introduction of NEMS. METHODS: Data were obtained from 149 public primary healthcare centers (PHCs) in four Chinese provinces (Shandong, Zhejiang, Anhui and Ningxia) using a facility-based survey. In total, 10,988 essential medicines were investigated. Individual price differences and a price index were used to measure price changes for three different lists: 2009–2010, 2010–2011, and 2009–2011. RESULTS: In the comparison between 2009 and 2010, a median decrease of 34.4% [95% confidence interval: 30.4%–39.1%] was observed in drug prices and the number of drug sales increased by 1.5%. The higher the retail price in 2010, the more the drug sales increased compared with 2009 (χ(2) = 75.9, p < 0.01). The drug revenues in 100 of the 149 surveyed PHCs decreased by an average of 39%. Where the available data allowed price changes for 2009–2011 to be assessed, drug prices were reduced significantly in 2010, but a modest decrease was seen in 2011. The Laspeyres index was less than 100 and the Paasche index was larger than the Laspeyres index in 2010 and 2011, which indicated that the frequently prescribed drugs usually had higher prices and any price reduction was milder. CONCLUSIONS: The introduction of NEMS in PHCs in China led to price reductions in essential medicines. However, more-expensive drugs were preferred in the postreform period. Most PHCs had less drug revenue and could encounter financing dilemmas after the implementation of NEMS. Policy options such as improving the compensation mechanism and rational use of drugs should be further promoted in PHCs.