The effects of pricing policy on the prices and supply of low-cost medicines in Shandong, China: evidence from an interrupted time series analysis

BACKGROUND: In China, some medicines had a supply problem. In 2015, to address this problem, the Chinese government issued a policy to raise the price cap for some shorted low-cost medicines (LCMs). The objective was to assess the effects on medicine prices and supply of medicines from a medicine pricing policy reform point of view. METHODS: This study was conducted in Shandong, an eastern province of China with a population of 99.4 million. We collected procurement data of all (n = 1494) LCM medicines available between April 2014 and February 2017 from the web-based Provincial Drug Centralized Bidding Procurement System. This study used the Drug Price index and the average price to reveal the price change of LCMs and used the interrupted time series to evaluate the effects of LCM policy on medicine supply by measuring the change of monthly procurement volume, the number of products, and the average delivery time of LCMs. RESULTS: After the policy implementation in October 2015, the quarterly average price of all LCM products, especially traditional Chinese medicines, showed a sudden growth trend. Then after two-quarter implementation of policy, the price recovered to the same trend before policy intervention, which is consistent with the trend of the Drug price index. There were 466 of LCM products available in October 2015. After the policy intervention, the number of products available increased by 109.87% (n = 978) in February 2017, at a growth rate of 6.44% per month (Value = 30.02, P < 0.001). Besides after the intervention in October 2015, the monthly procurement volumes of LCMs increased rapidly, on average, at a rate of 28.93% per month (Value = 474,000, P < 0.001) for all LCMs. The average delivery time of LCMs kept on decreasing from 33.37 days to 10.69 days at a reduced rate of 3.63% (Value = − 1.21, P < 0.001) per month before the policy, while no significant changes were noted. Also, average monthly delivery time was stable at 9 days after the intervention. CONCLUSIONS: The policy promoted the supply of low-cost medicines, which is beneficial for the Universal Health Coverage. However, future policies should focus on monitoring price change and reducing the delivery time of generic medicines.