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Can the Profitability of Medical Enterprises Be Improved After Joining China's Centralized Drug Procurement? A Difference-in-Difference Design

This paper explores the impact of joining centralized drug procurement of China on the profitability of medical enterprises by the difference-in-difference (DID) model. When centralized procurement cannot bring enough cost savings to enterprises, the price competition caused by centralized procureme...

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Detalles Bibliográficos
Autores principales: Hua, Yu-Fei, Lu, Jin, Bai, Bing, Zhao, Han-Qing
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Frontiers Media S.A. 2022
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8843945/
https://www.ncbi.nlm.nih.gov/pubmed/35178375
http://dx.doi.org/10.3389/fpubh.2021.809453
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author Hua, Yu-Fei
Lu, Jin
Bai, Bing
Zhao, Han-Qing
author_facet Hua, Yu-Fei
Lu, Jin
Bai, Bing
Zhao, Han-Qing
author_sort Hua, Yu-Fei
collection PubMed
description This paper explores the impact of joining centralized drug procurement of China on the profitability of medical enterprises by the difference-in-difference (DID) model. When centralized procurement cannot bring enough cost savings to enterprises, the price competition caused by centralized procurement will lead to the decline of enterprise profits. In the short term, the negative impact of China's drug centralized procurement policy on the net profit of enterprises is not obvious in the year when enterprises win the bid. After the government officially purchases from pharmaceutical enterprises, the negative impact of the drug centralized procurement policy of China on the net profit of enterprises begins to appear gradually. Therefore, the generic drug manufacturers increase R&D investment and have their own heavy products of original drugs as soon as possible to enhance their core competitiveness.
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spelling pubmed-88439452022-02-16 Can the Profitability of Medical Enterprises Be Improved After Joining China's Centralized Drug Procurement? A Difference-in-Difference Design Hua, Yu-Fei Lu, Jin Bai, Bing Zhao, Han-Qing Front Public Health Public Health This paper explores the impact of joining centralized drug procurement of China on the profitability of medical enterprises by the difference-in-difference (DID) model. When centralized procurement cannot bring enough cost savings to enterprises, the price competition caused by centralized procurement will lead to the decline of enterprise profits. In the short term, the negative impact of China's drug centralized procurement policy on the net profit of enterprises is not obvious in the year when enterprises win the bid. After the government officially purchases from pharmaceutical enterprises, the negative impact of the drug centralized procurement policy of China on the net profit of enterprises begins to appear gradually. Therefore, the generic drug manufacturers increase R&D investment and have their own heavy products of original drugs as soon as possible to enhance their core competitiveness. Frontiers Media S.A. 2022-02-01 /pmc/articles/PMC8843945/ /pubmed/35178375 http://dx.doi.org/10.3389/fpubh.2021.809453 Text en Copyright © 2022 Hua, Lu, Bai and Zhao. https://creativecommons.org/licenses/by/4.0/This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
spellingShingle Public Health
Hua, Yu-Fei
Lu, Jin
Bai, Bing
Zhao, Han-Qing
Can the Profitability of Medical Enterprises Be Improved After Joining China's Centralized Drug Procurement? A Difference-in-Difference Design
title Can the Profitability of Medical Enterprises Be Improved After Joining China's Centralized Drug Procurement? A Difference-in-Difference Design
title_full Can the Profitability of Medical Enterprises Be Improved After Joining China's Centralized Drug Procurement? A Difference-in-Difference Design
title_fullStr Can the Profitability of Medical Enterprises Be Improved After Joining China's Centralized Drug Procurement? A Difference-in-Difference Design
title_full_unstemmed Can the Profitability of Medical Enterprises Be Improved After Joining China's Centralized Drug Procurement? A Difference-in-Difference Design
title_short Can the Profitability of Medical Enterprises Be Improved After Joining China's Centralized Drug Procurement? A Difference-in-Difference Design
title_sort can the profitability of medical enterprises be improved after joining china's centralized drug procurement? a difference-in-difference design
topic Public Health
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8843945/
https://www.ncbi.nlm.nih.gov/pubmed/35178375
http://dx.doi.org/10.3389/fpubh.2021.809453
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