Reform of China's medical insurance procurement system and its long-term impact : a corporate perspective = 我国医保采购制度改革及其长期影响 : 企业的视角

Abstract

Drug centralized procurement refers to the purchasing method in which multiple medical institutions acquire the required drugs through a centralized bidding and procurement organization. The main issues targeted by drug centralized procurement are excessively high drug prices and heavy medication burdens. National centralized drug volume-based procurement refers to the purchase of a certain drug in the specified quantity through a bidding and procurement process facilitated by the National Healthcare Security Administration of the People's Republic of China. This article focuses on the impact of the national drug centralized procurement system on pharmaceutical companies and employs economic research methods for empirical verification. Based on data from five batches of drug centralized procurement spanning from 2018 to 2021, the article collects financial data of companies and constructs a unique dataset on enterprise drug centralized procurement. The Staggered Difference-in-difference model and Event-study method are utilized to analyze the static and dynamic effects of the centralized procurement system on enterprise profitability, research and development capabilities, and business conditions. In the short term, the drug centralized procurement policy has a negative impact on the net profits and sales expenses of companies, while it does not significantly affect their research and development capabilities. In the long term, after four quarters of drug centralized procurement, the net profits of companies decline quarter by quarter. Companies continue to increase investment in scientific research and innovation. Short-term sales revenue of companies increases, but in the long term, it remains in a damaged position, especially within 1-2 years after the centralized procurement. The results of case analysis on representative companies in the pharmaceutical industry corroborate the empirical findings. This article fills the gap in economic research on the drug centralized procurement system from the perspective of enterprises. It explores the impact of the drug centralized procurement policy on pharmaceutical companies from an enterprise perspective and provides relevant policy recommendations for pharmaceutical enterprises, the pharmaceutical industry, and the government.