Collective pharmaceutical procurement in China may have unintended consequences in supply and pricing
The collective pharmaceutical procurement was launched in China in 2018 to reduce the prices of selected drugs, by pooling the demands of member cities and granting the contract to the manufacturer with the lowest bid. We found the procurement significantly decreased the prices of most drugs. We a...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
2020
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| Online Access: | https://eprints.nottingham.ac.uk/61480/ |
| _version_ | 1848799881027649536 |
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| author | Jiang, Shan Chen, Zhuo Wu, Tao Wang, Hui |
| author_facet | Jiang, Shan Chen, Zhuo Wu, Tao Wang, Hui |
| author_sort | Jiang, Shan |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | The collective pharmaceutical procurement was launched in China in 2018 to reduce the prices of
selected drugs, by pooling the demands of member cities and granting the contract to the manufacturer with the lowest bid. We found the procurement significantly decreased the prices of most
drugs. We also identified significant price increases on some drugs, indicating that manufacturers of these
drugs may have strong market power to manipulate prices. The “winner-takes-all” principle applied in
the procurement may further increase the market power of winning manufacturers by expanding their
respective market shares. They may take the advantage of the market power to increase drug prices in the
long-run. The continuously lowering price-caps may force the losing bidders to exit the market. A careful assessment of the unintended consequences of the collective procurement is warranted. |
| first_indexed | 2025-11-14T20:42:42Z |
| format | Article |
| id | nottingham-61480 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T20:42:42Z |
| publishDate | 2020 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-614802020-08-28T02:03:01Z https://eprints.nottingham.ac.uk/61480/ Collective pharmaceutical procurement in China may have unintended consequences in supply and pricing Jiang, Shan Chen, Zhuo Wu, Tao Wang, Hui The collective pharmaceutical procurement was launched in China in 2018 to reduce the prices of selected drugs, by pooling the demands of member cities and granting the contract to the manufacturer with the lowest bid. We found the procurement significantly decreased the prices of most drugs. We also identified significant price increases on some drugs, indicating that manufacturers of these drugs may have strong market power to manipulate prices. The “winner-takes-all” principle applied in the procurement may further increase the market power of winning manufacturers by expanding their respective market shares. They may take the advantage of the market power to increase drug prices in the long-run. The continuously lowering price-caps may force the losing bidders to exit the market. A careful assessment of the unintended consequences of the collective procurement is warranted. 2020-06-17 Article PeerReviewed application/pdf en cc_by https://eprints.nottingham.ac.uk/61480/1/ilovepdf_merged%20%2835%29.pdf Jiang, Shan, Chen, Zhuo, Wu, Tao and Wang, Hui (2020) Collective pharmaceutical procurement in China may have unintended consequences in supply and pricing. Journal of Global Health, 10 (1). ISSN 2047-2978 http://dx.doi.org/10.7189/JOGH.10.010314 doi:10.7189/JOGH.10.010314 doi:10.7189/JOGH.10.010314 |
| spellingShingle | Jiang, Shan Chen, Zhuo Wu, Tao Wang, Hui Collective pharmaceutical procurement in China may have unintended consequences in supply and pricing |
| title | Collective pharmaceutical procurement in China may have unintended consequences in supply and pricing |
| title_full | Collective pharmaceutical procurement in China may have unintended consequences in supply and pricing |
| title_fullStr | Collective pharmaceutical procurement in China may have unintended consequences in supply and pricing |
| title_full_unstemmed | Collective pharmaceutical procurement in China may have unintended consequences in supply and pricing |
| title_short | Collective pharmaceutical procurement in China may have unintended consequences in supply and pricing |
| title_sort | collective pharmaceutical procurement in china may have unintended consequences in supply and pricing |
| url | https://eprints.nottingham.ac.uk/61480/ https://eprints.nottingham.ac.uk/61480/ https://eprints.nottingham.ac.uk/61480/ |