Understanding Heterogeneous Drug Procurement Behaviour of Healthcare Institutions Under Pooled Procurement: Evidence From China
- 1School of Public Health, Peking University, Beijing, China.
Abstract
Background:: While the overall impact of pooled drug procurement on drug procurement has been evaluated, little is known about how healthcare institutions’ pre-policy procurement composition is associated with heterogeneous post-policy procurement responses. This study addresses this gap under China’s National Volume-Based Procurement (NVBP) policy.
Methods:: We used monthly procurement data from January 2018 to December 2020 from four provinces in China, covering both pre- and post-policy periods, as the NVBP policy was implemented in January 2020. Outcomes were procurement volumes, measured as the number of defined daily doses (DDDs), of NVBP-covered drugs (bid-winning and non-winning products) and their clinically substitutable alternatives. All healthcare institutions in the selected provinces were included and stratified by (1) their pre-policy share of bid-winning products among NVBP drugs and (2) their pre-policy share of NVBP drugs among both NVBP and alternative drugs, to assess institutional heterogeneity. Interrupted time series (ITS) analysis was conducted to assess the immediate (level) and long-term (slope) post-policy changes.
Results:: Procurement volumes of bid-winning products increased substantially following the policy (level change: 1275%, P<.01), with smaller increases observed among healthcare institutions with higher pre-policy bid-winning shares (eg, highest-share subgroup: 441%, P<.01), consistent with uniform procurement targets. Although overall procurement of alternative drugs remained stable, healthcare institutions with higher pre-policy NVBP shares experienced significant increases, with level changes of up to 1010.9%, suggesting substitution driven by financial losses. In contrast, healthcare institutions with lower NVBP shares saw notable declines (level change: −34.8% to −65.2%), possibly reflecting demand-side substitution toward lower-priced NVBP drugs.
Conclusion:: Findings highlight that in pooled procurement, procurement behaviour is shaped more by regulatory enforcement and financial incentives than by price-driven demand. Strengthening guidance and oversight of supplier behaviour remains essential to realizing the full benefits of pooled procurement reforms.
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BibTeX
@article{zhao2026understanding,
title = {{Understanding Heterogeneous Drug Procurement Behaviour of Healthcare Institutions Under Pooled Procurement: Evidence From China}},
author = {Boya Zhao and Zhao Cheng and Xing Lin Feng},
journal = {International Journal of Health Policy and Management},
year = {2026},
month = jun,
doi = {10.34172/ijhpm.9372},
url = {https://doi.org/10.34172/ijhpm.9372},
note = {CC BY 4.0},
}
RIS
TY - JOUR
TI - Understanding Heterogeneous Drug Procurement Behaviour of Healthcare Institutions Under Pooled Procurement: Evidence From China
AU - Boya Zhao
AU - Zhao Cheng
AU - Xing Lin Feng
PY - 2026
DA - 2026/06/07
JO - International Journal of Health Policy and Management
DO - 10.34172/ijhpm.9372
UR - https://doi.org/10.34172/ijhpm.9372
AB - Background:: While the overall impact of pooled drug procurement on drug procurement has been evaluated, little is known about how healthcare institutions’ pre-policy procurement composition is associated with heterogeneous post-policy procurement responses. This study addresses this gap under China’s National Volume-Based Procurement (NVBP) policy. Methods:: We used monthly procurement data from January 2018 to December 2020 from four provinces in China, covering both pre- and post-policy periods, as the NVBP policy was implemented in January 2020. Outcomes were procurement volumes, measured as the number of defined daily doses (DDDs), of NVBP-covered drugs (bid-winning and non-winning products) and their clinically substitutable alternatives. All healthcare institutions in the selected provinces were included and stratified by (1) their pre-policy share of bid-winning products among NVBP drugs and (2) their pre-policy share of NVBP drugs among both NVBP and alternative drugs, to assess institutional heterogeneity. Interrupted time series (ITS) analysis was conducted to assess the immediate (level) and long-term (slope) post-policy changes. Results:: Procurement volumes of bid-winning products increased substantially following the policy (level change: 1275%, P<.01), with smaller increases observed among healthcare institutions with higher pre-policy bid-winning shares (eg, highest-share subgroup: 441%, P<.01), consistent with uniform procurement targets. Although overall procurement of alternative drugs remained stable, healthcare institutions with higher pre-policy NVBP shares experienced significant increases, with level changes of up to 1010.9%, suggesting substitution driven by financial losses. In contrast, healthcare institutions with lower NVBP shares saw notable declines (level change: −34.8% to −65.2%), possibly reflecting demand-side substitution toward lower-priced NVBP drugs. Conclusion:: Findings highlight that in pooled procurement, procurement behaviour is shaped more by regulatory enforcement and financial incentives than by price-driven demand. Strengthening guidance and oversight of supplier behaviour remains essential to realizing the full benefits of pooled procurement reforms.
SN - 2322-5939
ER -