title: Pharmaceutical pricing: an empirical study of market competition in Chinese hospitals.
abstract: BACKGROUND
  High pharmaceutical prices and over-prescribing of high-priced pharmaceuticals in Chinese hospitals has long been criticized. Although policy makers have tried to address these issues, they have not yet found an effective balance between government regulation and market forces.
  
  
  OBJECTIVE
  Our objective was to explore the impact of market competition on pharmaceutical pricing under Chinese government regulation.
  
  
  METHODS
  Data from 11 public tertiary hospitals in three cities in China from 2002 to 2005 were used to explore the effect of generic and therapeutic competition on prices of antibiotics and cardiovascular products. A quasi-hedonic regression model was employed to estimate the impact of competition. The inputs to our model were specific attributes of the products and manufacturers, with the exception of competition variables.
  
  
  RESULTS
  Our results suggest that pharmaceutical prices are inversely related to the number of generic and therapeutic competitors, but positively related to the number of therapeutic classes. In addition, the product prices of leading local manufacturers are not only significantly lower than those of global manufacturers, but are also lower than their non-leading counterparts when other product attributes are controlled for.
  
  
  CONCLUSIONS
  Under the highly price-regulated market in China, competition from generic and therapeutic competitors did decrease pharmaceutical prices. Further research is needed to explore whether this competition increases consumer welfare in China's healthcare setting.
authors.affiliation: School of Pharmaceutical Science and Technology, Tianjin University, Tianjin, China, jingwu@tju.edu.cn.
authors.forename: Jing
authors.initials: J
authors.lastname: Wu
authors.forename: Judy
authors.initials: J
authors.lastname: Xu
authors.forename: Gordon
authors.initials: G
authors.lastname: Liu
authors.forename: Jiuhong
authors.initials: J
authors.lastname: Wu
mesh_terms: D002681:China; D003363:Cost Control / Q000331:legislation & jurisprudence; D003365:Costs and Cost Analysis; D016527:Drug Costs / Q000331:legislation & jurisprudence*; D004345:Drug Industry / Q000191:economics*; D016568:Drugs, Generic / Q000191:economics*; D004465:Economic Competition; D017850:Economics, Pharmaceutical; D033161:Government Regulation; D006783:Hospitals, State / Q000191:economics*
chemical_list: D016568:Drugs, Generic