Competitive Bidding in Drug Procurement: Evidence from China

• 成果类型: Article
• 署名作者: Cao, Shengmao; Yi, Lisa Xuejie; Yu, Chuan
• 署名单位: Northwestern University; Stanford University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.20220505
• 发表日期: 2024
• 页码: 481-513
• 关键词: discrete-choice models; generic entry

摘要

We study the equilibrium effects of introducing competitive bidding in drug procurement. In 2019, , China introduced a competitive bidding program where drug companies bid for a prespecified procurement quantity in nine provinces. Using a difference-in-differences design, , we show the program reduced average drug prices by 47.4 percent. Generic drugs won most bids and cut prices by 75.0 percent. We develop an equilibrium model to quantify the trade-off between lower prices and potential choice distortions. Competitive bidding increases consumer welfare if policymakers believe consumers should value branded and bioequivalent generic drugs equally. The program also reduced government expenditure on insurance by 19.8 percent.