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

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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.

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Acknowledgments

The authors would like to thank Mr. Adamm Ferrier for his assistance in language editing.

Author contributions

Xinping Zhang was involved in research, concept and design, data interpretation, and writing the article. Yuqing Tang was involved in research design, data collection, data analysis, and drafting the article. Chaojie Liu was involved in research, concept and design, data interpretation, and writing and reviewing the article. All authors read and approved the final manuscript.

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Authors and Affiliations

  1. School of Medicine and Health Management, Tongji Medical College, Huazhong University of Science and Technology, Hangkong street, Wuhan, Hubei, China

    Yuqing Tang & Xinping Zhang

  2. School of Management, Hubei University of Chinese Medicine, Huangjiahu West Road, Hongshan District, Wuhan, Hubei Province, 430065, China

    Chaojie Liu

  3. School of Psychology and Public Health, La Trobe University, Kingsbury Drive, Melbourne, VIC, 3086, Australia

    Chaojie Liu

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  1. Yuqing Tang
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Correspondence to Chaojie Liu or Xinping Zhang.

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Conflict of interest

Yuqing Tang, Chaojie Liu and Xinping Zhang declare that they have no conflicts of interest.

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No funding sources were used for this study.

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Tang, Y., Liu, C. & Zhang, X. Delivery of Essential Medicines to Primary Care Institutions and its Association with Procurement Volume and Price: A Case Study in Hubei Province, China. Appl Health Econ Health Policy 15, 57–64 (2017). https://doi.org/10.1007/s40258-016-0276-8

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  • DOI: https://doi.org/10.1007/s40258-016-0276-8

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