Delivery of Essential Medicines to Primary Care Institutions and its Association with Procurement Volume and Price: A Case Study in Hubei Province, China

Yuqing Tang, Chaojie Liu () and Xinping Zhang ()
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Yuqing Tang: Tongji Medical College, Huazhong University of Science and Technology
Chaojie Liu: Hubei University of Chinese Medicine
Xinping Zhang: Tongji Medical College, Huazhong University of Science and Technology

Applied Health Economics and Health Policy, 2017, vol. 15, issue 1, No 7, 57-64

Abstract: Abstract Background The low availability of essential medicines is a worldwide issue of concern. In 2009, China introduced a National Essential Medicines List (NEML), with NEML medicines being purchased in bulk at contracted prices established by tenders conducted at the provincial level. The availability of essential medicines in the public sector largely relies on commercial supply chains. Objectives The objectives of this paper were to analyze the delivery performance of essential medicines under NEML provincial procurement arrangements, and to determine whether the procurement volume and price of medicines are associated with the delivery performance of suppliers. Methods We reviewed 9390 recorded orders of 1099 essential medicines in Hubei province from August 2011 to April 2012. The reliability of medicine delivery in-full and on-time (DIFOT) was considered the performance indicator, and we used Spearman correlation analyses to explore whether there were any associations between DIFOT and procurement price and volume. Quantile regressions were performed to determine such associations. Results The DIFOT had positive correlations with procurement price and volume. The Spearman rank correlation coefficients between price and DIFOT were 0.114, 0.34 and 0.25 for medicines with low one-third, middle one-third and high one-third procurement volumes, respectively. The quantile regression analysis revealed a positive association between price and DIFOT across all quantiles of DIFOT, and although significant positive associations between volume and DIFOT were only found at the 25th percentile of DIFOT, volume showed significant interactions with price for both the 25th and 50th percentiles of DIFOT. Conclusions Higher procurement price is associated with better delivery performance of essential medicines; however, it is important to link procurement price with procurement volume. Increasing procurement volume may alleviate the negative effect of low price on delivery performance. Variation in volumes of repeated orders imposes uncertainties and may jeopardize the delivery of essential medicines.

Date: 2017
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DOI: 10.1007/s40258-016-0276-8

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