Reforming China’s retail prescription medicine purchasing system: evidence from retail pharmacies in Wuhan

BACKGROUND: In China, national health reforms are interpreted, piloted and implemented slightly differently by each local health authority. This is the first study of China's 2023 pharmacy reform allowing 360 million urban employee basic medical insurance (UEBMI) members the right to purchase prescription medicine using their insurance at retail pharmacies. For Wuhan, we assess the impact of the 2023 medicine purchasing reform on medicine buying behavior; evaluate the benefits of the changes to UEBMI members; and provide new insights into China's retail pharmacies' business model. METHODS: From March 2022 to December 2023, we gained unique access to daily UEBMI members' medicine purchases, covering 34,956 claims at two representative Wuhan pharmacies. The impact of the new retail pharmacy purchasing policy on medicines purchasing behavior were quantitatively evaluated using descriptive statistics and interrupted time series analysis (ITSA). RESULTS: No significant pre-reform trend in medicine purchases was observed, confirming a stable baseline prior to the 2023 reform. However, medicine purchases from retail pharmacies showed a significant upward trend. There was no evidence of medicine over-use or fraud. The benefit to members was measured by the absence of any significant upward per capita total expenditure trend and a significant decrease in the proportion of medicine expenditures from members personal medical savings accounts. Retired UEBMI members benefited more than currently employed UEBMI members from allowing UEBMI funds for prescription purchases from retail pharmacies. CONCLUSIONS: The 2023 reforms allowed UEBMI members to purchase medicine from retail pharmacies, providing medicine accessibility and affordability for members, especially retired members; did not trigger an increase in members' medicine consumption; attenuated the over-use of hospital pharmacies. Future study should empirically test whether pharmacies' business model transformed away from a singular focus on price competition towards a combination of price competition and health services.