The impact of national centralized drug procurement on health expenditures for lung cancer inpatients: A difference-in-differences analysis in a large tertiary hospital in China

The availability and affordability of medicines remain major health challenges around the world. In March 2019, the Chinese government introduced a pilot National Centralized Drug Procurement (NCDP) program in order to reduce drug prices and improve the affordability of effective and safe medicines. This study aimed to assess the impact of NCDP policy on health expenditures of cancer patients. Using inpatient discharge records from a large hospital in the pilot city, we performed a difference-in-differences design to estimate the change in health expenditures before and after the policy. We found that the implementation of NCDP was associated with a significant decrease in total expenditures (14.13%) and drug expenditures (20.75%) per inpatient admission. There were also significant reductions in non-drug-related expenditures, including a 7.65% decrease in health service expenditures, a 38.28% decrease in diagnosis expenditures, and a 25.31% decrease in consumable material expenditures per inpatient admission. However, the NCDP implementation was associated with a 107.97% increase in the traditional Chinese medicine expenditures. Overall, the study provided evidence that the NCDP policy has achieved its goals of high-quality and affordable healthcare. The drug expenditures of lung cancer patients revealed a continuous decline, and the policy may have spillover effects on other healthcare expenditures. Further studies are needed to evaluate the long-term effects of NCDP on policy-related expenditures and health outcomes.