Impacts of regulated competition on pricing in Chinese pharmaceutical market under urban employee basic medical insurance.

<bold>Background: </bold>Examine the effects of regulated competition on the drug pricing in China.<bold>Methods: </bold>Based on product-level data, a regression method was employed for pricing by using data from Tianjin Urban Employee Basic Medical Insurance (UEBMI) database. The market competition measures distinguished generic competition within the same molecule from therapeutic competition within the same therapeutic class.<bold>Results: </bold>The increases in pricing are inversely related to the number of generic competitions. The generic sub-group results vary from the originator sub-group. For the generics, generic competition has a significantly reduced effect on the price; however, only therapeutic competition has a significantly reduced effect on the originator price.<bold>Conclusions: </bold>Regulated competition has a positive role in shaping the pharmaceutical market. Furthermore, regulated competition affects the price differently for the sub-groups. The promotion of competition between generic and originator in order to reap full competition benefit and reduce frictions among policies are necessary. [ABSTRACT FROM AUTHOR]