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3937Cancer has become a critical public health challenge in China. While patented anti-cancer drugs hold life-saving potential, their prohibitively high prices render them inaccessible to most patients. From the government’s perspective, this presents a dilemma: (1) The health insurance fund faces growing financial pressures, limiting its capacity to expand reimbursement coverage. (2) Direct price controls, though potentially lowering drug prices, could stifle pharmaceutical innovation. To solve this dilemma, China has innovatively implemented the National Drug Price Negotiation (NDPN) policy since 2016. This policy establishes a negotiation framework between National Healthcare Security Administration and pharmaceutical manufacturers, effectively reducing drug reimbursement prices to balance the interests of patients, pharmaceutical manufacturers, and the insurance fund.
This paper employs a staggered DID approach to evaluate the economic and health effects of the NDPN policy. It uses sales data for anti-cancer drugs and cancer mortality statistics as primary data sources. The results indicate that the implementation of the NDPN policy leads to a significant increase in both sales and revenue for relevant anti-cancer drugs among pharmaceutical manufacturers. However, the impact on sales profits depends on the costs of the drugs. For patients, the number of deaths from corresponding types of cancer has significantly decreased after the implementation of the policy. Heterogeneity analysis reveals that the policy has a more significant impact on cancer types, with more negotiated drugs available for treatment. For rare cancers, the impact of this policy is more prominent in urban areas. Cost-benefit analysis shows that the policy significantly reduces patient mortality at a reasonable cost.
This paper provides the first comprehensive assessment of both the economic and health effects of China’s NDPN policy within a causal inference framework. Based on the findings, the following recommendations are proposed: (1) Expand the coverage of negotiated drugs to provide more treatment options. (2) Ensure the supply of negotiated drugs, especially in rural areas. (3) Establish dynamic price adjustment mechanisms to optimize the use of health insurance fund.
