Testing the unintended cost effects of health policies for generic substitutions: the case of China’s National Volume-Based Procurement (NVBP) policy

Generic substitutions are globally considered to contain health expenditures. Yet it is uncertain whether the costs spill over to other medicines or health services. Contextualizing China's National Volume-Based Procurement (NVBP) policy, which promoted generic substitution, this study tests the changes in patients' utilization of generic medicines and whether the costs shift to other pharmaceutics or health services post-policy. This population-based, matched, cohort study uses claims data from Tianjin, China in 2018-2020. We focus on amlodipine, the most commonly used calcium channel blocker with the largest procurement volume. We build comparable post-policy cohorts: Non-switchers who kept using originator amlodipine, Pure-switchers who loyally switched to generic amlodipine, and Back-switchers who switched back-and-forth; and compare between each matched pair, respectively, their annual healthcare costs and that broken down by components, and patients' use of and adherence to amlodipine post-policy. In all, 1185 Pure-switchers, 1398 Back-switchers, and 2330 Non-switchers were identified (mean age: 63.0 years; 58.5% men). For the matched pairs, Pure-switchers (n = 772) incurred annual total medical costs of CNY 9213.5, 12.2% lower than Non-switchers [n = 1544, absolute difference CNY -1309.3, 95% confidence interval (-2645.8, -19.6)]. The cost reduction only results from amlodipine prescriptions in outpatient encounters and are equally borne by health plans and the enrolees. The costs for Pure-switchers and Non-switchers are not different from other medicines, nor from other items including tests, surgeries, beds, and medical consumables for hypertension-related encounters/admissions. Pure-switchers also had higher daily dosage and better adherence to amlodipine than Non-switchers. The differences between Back-switchers and Non-switchers show similar trends but are less profound. China's NVBP policy is effective in controlling pharmaceutical costs. No unintended cost effects have yet been identified in the short run. Other countries may learn from China on a comprehensive set of auxiliary policies, including listing, bidding, purchasing, and reimbursing, to better promote generic substitutions.