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Does Economic Incentive Matter for Rational Use of Medicine? China’s Experience from the Essential Medicines Program

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Abstract

Background

Before the new round of healthcare reform in China, primary healthcare providers could obtain a fixed 15 % or greater mark-up of profits by prescribing and selling medicines. There were concerns that this perverse incentive was a key cause of irrational medicine use. China’s new Essential Medicines Program (EMP) was launched in 2009 as part of the national health sector reform initiatives. One of its core policies was to eliminate primary care providers’ economic incentives to overprescribe or prescribe unnecessarily expensive drugs, which were regarded as consequences of China’s traditional financing system for health institutions.

Objectives

The objective of the study was to measure changes in prescribing patterns in primary healthcare facilities after the removal of the economic incentives for physicians to overprescribe as a result of the implementation of the EMP.

Methods

A comparison design was applied to 8,258 prescriptions in 2007 and 8,278 prescriptions in 2010, from 83 primary healthcare facilities nationwide. Indicators were adopted to evaluate medicine utilization, which included overall number of medicines, average number of Western and traditional Chinese medicines, pharmaceutical expenditure per outpatient prescription, and proportion of prescriptions that contained two or more antibiotics. We further assessed the use of medicines (antibiotics, infusion, hormones, and intravenous injection) per disease-specific prescription for hypertension, diabetes, coronary artery heart disease, bronchitis, upper respiratory tract infection, and gastritis. A difference-in-difference analysis was employed to evaluate the net policy effect.

Results

Overall changes in indicators were not found to be statistically significant between the 2 years. The results varied for different diseases. The number of Western drugs per outpatient prescription decreased while that of traditional Chinese medicines increased. Overuse of antibiotics remained an extensive problem in the treatment of many diseases, though there was some significant improvement in certain diseases, like diabetes in rural areas. Medicine expenditure per prescription also decreased.

Conclusions

It seems that the removal of a perverse economic incentive alone would not lead to improvement of healthcare providers’ prescribing patterns. The rationality of the Essential Medicines List and the lack of payers’ and providers’ meaningful involvement in the development of the policy possibly contribute to the lack of significant changes in prescribing behaviors. It is suggested that China should adopt more comprehensive policies for healthcare facilities, physicians, patients, and payers, rather than just relying on economic incentives to improve rational use of medicines.

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Acknowledgments

The authors, Wen Chen, Mingsheng Chen, Lijie Wang, Luying Zhang, Hongli Jiang, and Wenhui Mao, declare that they have no competing interests. The Ministry of Health of the People’s Republic of China funded the study and allowed the use of the data for academic research. The sponsor had no influence on the study design, collection, analysis, and interpretation of the data and the writing of the manuscript. We thank the Health Departments of the provinces and local health bureaus for their cooperation and for facilitating field data collection.

Prof. Wen Chen was the principal investigator of this study. He was in charge of the overall study design, data collection, analysis, and interpretation. Mingsheng Chen contributed to the study design, data analysis, and writing of the first draft of the manuscript. Lijie Wang contributed to the study design, helped with data analysis and modified the manuscript. Luying Zhang conducted the data collection and reviewed and polished the manuscript. Hongli Jiang conducted the data collection and reviewed the manuscript. Wenhui Mao participated in data collection and analysis.

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Authors and Affiliations

  1. Department of Health Economics, School of Public Health, Fudan University, 138 Yi Xue Yuan Road, P.O. Box 187, Shanghai, 200032, People’s Republic of China

    Mingsheng Chen, Lijie Wang, Wen Chen, Luying Zhang, Hongli Jiang & Wenhui Mao

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  1. Mingsheng Chen
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  2. Lijie Wang
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  3. Wen Chen
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  4. Luying Zhang
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Correspondence to Wen Chen.

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Chen, M., Wang, L., Chen, W. et al. Does Economic Incentive Matter for Rational Use of Medicine? China’s Experience from the Essential Medicines Program. PharmacoEconomics 32, 245–255 (2014). https://doi.org/10.1007/s40273-013-0068-z

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