Drug administration and clinical pharmacy column
Effects of drug procurement under cap price policy in Sanming 
Ting Yin, Bin Jiang* 
Department of Administrative and Clinical Pharmacy, School of Pharmaceutical Sciences, Peking University Health Science Center, Beijing 100191, China
Abstract: To study the effects of drug procurement under cap price policy (DPUCP) in Sanming, changes in drug category, price, availability and corporate structure were analyzed using purchasing data of the 7th and 8th centralized drug procurement in Fujian Province and the 1st drug procurement under cap price in Sanming, and a field investigation was conducted. (1) The amounts of bid-winning drugs and pharmaceutical makers decreased sharply, leading to optimization of drug category and supplier structure. (2) The procurement could meet clinical demands, though a small percentage of drugs were out of stock. (3) Drug prices fell in general, with 10% decline in domestic drugs with a unit package price over RMB 5 yuan, a slight price reduction in imported drugs, and some price increase in cheap domestic drugs with a unit package price under RMB 3 yuan. DPUCP policy in Sanming optimized procurement drug category and supplier structure, reduced price, and improved industrial structure. However, problems still existed, such as shortage of some drugs and little price reduction in imported and brand-name drugs.   
Keywords: Drug procurement; Drug bidding; Policy effect; Sanming
CLC number: R951                Document code: A                 Article ID: 10031057(2018)1179906
1. Introduction
Sanming, a pioneer in China’s healthcare reform, implemented drug procurement under cap price (DPUCP) in October, 2013, which was considered to be one of its essential reform policies. This policy required that all bidding drugs should be referred with common names by hospitals, with merely one oral formulation and one injection for each common name, and another oral formulationand injection for each imported drug[1].
Compared with centralized drug procurement (CDP) scheme in Fujian, Sanming’s DPUCP policy differentiated in three aspects: (1) drugs were classified into two groups of domestic and imported drugs, instead of the complicated quality classification; (2) the rule of“two specifications and two formulations for one common name” was strictly implemented; (3) drugs with the lowest price would be purchased instead of “double envelop” procedure. How drug price, clinical availability and pharmaceutical industry influenced by the policy attracted broad attention.
Therefore, the effects of DPUCP in Sanming were analyzed through field investigation and procurement data to provide experience for the improvement of CDP policy in China.
2. Data and methods
Procurement data of 8360 drugs of the 7th and 8th CDP from Procurement Platform of Medicines and Medical Devices in Fujian and 1671 drugs of the 1stDPUCP in Sanming from Sanming Healthcare Security Administration were collected and analyzed.
Policy effects were evaluated by the overall conditions of bidding drugs and companies, drug availability and prices[2,3].  
The overall conditions were depicted by the number and category of drugs in the procurement list, quantity and scale ranking of bidding drug makers[4,5], proportion of traditional Chinese medicines (TCM) and Western medicines, and proportion of domestic and imported drugs.
Essential drugs and reimbursement drugs were considered to be clinically indispensable, safe and effective, whose coverage rate was vital in the availabilityof drug supply system[6,7]. In addition, to find out clinical medication, surveys and interviews were conducted with experts in sampled hospital departments. Drugs with the lowest price either in DPUCP in Sanming or in CDP in Fujian would bepurchased. Therefore, the price comparison was between price in the DPUCP in Sanming and the lowest price in Fujian CDP, matching at the exact specification of a common name drug.
3. Results
3.1. Overview of procurement list
Compared with Fujian DCP, the number of common-name drugs in procurement list, specifications, varieties and bidding companies in the 1st DPUCP in Sanming sharply dropped from 1909, 3668, 8360, 1606 to 1172, 1543, 1671, 854 at a rate of 38.60%, 57.93%, 80.00%, 46.82%, respectively. The proportion of TCMs and domestic drugs declined from 31.96%, 96.79% to 22.86%, 86.42%, respectively, and the proportion of Western drugs and imported drugs increased from 68.04% and 3.21% to 77.14% and 13.58% (Table 1), respectively. Apparently, the structure of procured drugs was optimized. 
Table 1. Overall conditions of drugs in procurement list.