This study investigated the impact of China’s centralized drug procurement (CDP) on drug prices, utilization, and expenditure in China. Employing the event study method, we estimated the impacts for both contract-awarded (hereafter, “approved”) drug products and unawarded (hereafter, “unapproved”) products in the same molecule-dosage forms. The results show that the CDP decreased the prices of the approved drug products by 66.7% on average. Moreover, unintendedly, the CDP also pushed the prices of the unapproved products down by 25.9%. After the inception of the CDP, the quantities sold of the approved and unapproved products rose by four times and fell by 75.4%, respectively. With these estimates, we concluded that the CDP saves 252.2 billion yuan (equivalent to 38.8 billion US dollars) annually in drug expenditure.
In Strategy in the Contemporary World, edited by John Baylis, James J. Wirtz, and Jeannie L. Johnson, Oriana Skylar Mastro examines the evolution of Chinese grand strategy from Mao Zedong to Xi Jinping, its drivers, and its implications.