Analysis of the impact of national centralized volume-based procurement drug policy on the market dynamics of tuberculosis drugs

China’s National Centralized Drug Procurement (NCDP) consolidates public-sector procurement demand and links guaranteed volumes to competitive tendering. The impact of this policy on reshaping the tuberculosis (TB) medicines market—specifically prices and expenditure, procurement volumes, and market structure—remains insufficiently quantified using time-series methods across multiple procurement cycles and hospital types. A hospital-stratified interrupted time series (ITS) study was conducted utilizing monthly public-hospital procurement data from January 2015 to December 2022. Six TB medicines included in national procurement rounds 2–4 comprised the intervention group: isoniazid, moxifloxacin, ethambutol, linezolid, levofloxacin, and pyrazinamide. Nine TB-related medicines not included in these rounds served as comparators: rifampicin, rifapentine, rifabutin, streptomycin, protionamide, cycloserine, p-aminosalicylic acid sodium, bedaquiline, and clofazimine. Analyses were stratified by hospital type (general versus TB-specialized hospitals) and drug classification (first-line versus second-line agents). Outcome measures included procurement volume, total expenditure and cost per defined daily dose (DDDc), market concentration, and the number of active manufacturers in hospital procurement. Segmented regression analysis estimated immediate level and subsequent slope changes. Sensitivity analyses with alternative comparator specifications assessed robustness and parallel trends assumptions. Following NCDP implementation, hospital procurement costs for TB medicines declined substantially across both hospital types. In general hospitals, expenditure decreased significantly. DDDc reductions were dramatic: linezolid decreased from approximately 800 Renminbi (RMB) to below 100 RMB; moxifloxacin from 99 RMB to 20 RMB; levofloxacin from 24 RMB to 9 RMB. Similar patterns were observed in specialized hospitals. Market structure effects exhibited heterogeneity: first-line drugs showed increased concentration with declining manufacturer participation, while second-line drugs demonstrated expanded supplier participation and decreased Herfindahl-Hirschman Index (HHI). Sensitivity analyses confirmed robustness across alternative comparator specifications. The NCDP achieved substantial price and expenditure reductions for TB medicines whilst inducing heterogeneous effects on market structure—increased concentration for first-line drugs but expanded supplier participation and decreased market concentration for second-line drugs. TB-specialized hospitals, with higher baseline concentration and fewer suppliers, face heightened supply chain vulnerability. Given NCDP’s design—where hospitals independently select among winning suppliers and may procure non-winning products—policymakers should implement differentiated approaches: multi-winner tender designs to preserve supplier diversity for first-line drugs; strategic stockpiles and supplier qualification programs for specialized hospitals; and continued volume-price guarantees for second-line agents such as linezolid and moxifloxacin. Regular monitoring of market structure indicators across hospital types is essential to balance price efficiency with supply resilience. Not applicable. China’s National Centralized Drug Procurement (NCDP) policy, implemented in 2018, has been evaluated extensively for its effects on drug prices, volumes, and expenditures. Studies across therapeutic categories—including cardiovascular, antidiabetic, antibiotic, and antineoplastic drugs—have consistently demonstrated substantial price reductions (40–90%) and decreased healthcare expenditures following NCDP implementation. However, these evaluations have also revealed heterogeneous effects on market structure: while some drug categories experienced increased supplier participation, others showed market consolidation with reduced manufacturer numbers. Tuberculosis (TB) remains a significant public health challenge in China. The TB drug market is characterized by several features that distinguish it from higher-revenue therapeutic areas such as cardiovascular and oncology drugs: narrow profit margins that limit manufacturer willingness to enter or remain in the market, a small number of active producers relative to the disease burden, limited investment in research and development of new agents, and heightened supply chain vulnerability due to concentrated supplier bases. As drug-resistant TB becomes increasingly prevalent, these features raise concerns about whether existing procurement mechanisms can simultaneously achieve price reductions and maintain adequate supplier diversity to ensure uninterrupted access to essential anti-TB medicines. The TB drug market in China exhibits unique structural features shaped by the country’s dual-track healthcare delivery system. General hospitals treat TB patients alongside other conditions in respiratory departments, typically managing the initial contagious phase and routine cases. TB-specialized hospitals, operating within China’s vertical disease control structure, focus on culturing TB strains, drug resistance testing, and treatment of drug-resistant TB with courses of 18–24 months. Under China’s NCDP, winning suppliers and bid prices are determined centrally through competitive tendering, but individual hospitals retain autonomy in selecting among winners and may procure non-winning products (including originator brands) beyond the agreed volume quota. Consequently, the clinical differences between hospital types—general hospitals primarily managing drug-susceptible TB alongside other conditions, versus specialized hospitals concentrating on drug-resistant TB with narrower but higher-volume anti-TB drug portfolios—are expected to translate into distinct procurement patterns and supplier selection dynamics. This institutional heterogeneity suggests that NCDP effects may differ substantially between hospital types, yet no systematic assessment has examined how centralized procurement specifically impacts the TB medicine market across multiple procurement cycles and hospital types. This study provides the first comprehensive, multi-batch interrupted time series (ITS) analysis of NCDP effects on the TB drug market, examining six anti-TB medicines across three procurement rounds (2020–2021). By stratifying analyses by hospital type—general versus TB-specialized hospitals—and by drug classification—first-line versus second-line agents—we capture the heterogeneous policy impacts across different hospital types and drug categories that aggregate analyses would obscure. Our findings reveal that NCDP achieved substantial price reductions across all included TB drugs, with cost per defined daily dose (DDDc) decreasing by 50–90% for high-cost agents such as linezolid (from approximately 800 Renminbi Chinese Yuan, RMB to below 100 RMB) and moxifloxacin (from 99 RMB to 20 RMB). These reductions were consistent across both general and specialized hospitals, demonstrating the policy’s effectiveness in improving TB drug affordability regardless of hospital type. However, the policy’s effects on market structure exhibited notable heterogeneity. For first-line drugs (isoniazid, ethambutol, pyrazinamide), market concentration increased following NCDP implementation (HHI − 0.04 to + 0.12), accompanied by reductions in active manufacturer numbers, indicating competitive pressure that may have crowded out smaller domestic producers. In contrast, second-line drugs (moxifloxacin, linezolid, levofloxacin) showed increased supplier participation post-NCDP, with manufacturer counts rising significantly (+ 0.57 to + 1.85 in general hospitals). This divergent pattern suggests that initial market structure and profit margins shape how centralized procurement affects supplier participation and market concentration. Under NCDP’s institutional design—where hospitals autonomously choose among winning suppliers and retain the right to procure non-winning products—the observed heterogeneity reflects how different drug categories and hospital types respond to the same centralized policy framework. Sensitivity analyses using alternative comparator specifications confirmed the robustness of these findings, with expenditure reductions, DDDc decreases, and market structure changes consistently replicated across analytical approaches. The stratified results further revealed that specialized hospitals—which operate with baseline HHI values of 0.42–0.94 for first-line drugs (0.31–0.85 for second-line drugs) compared to 0.17–0.26 and 0.07–0.63 respectively in general hospitals—face heightened supply vulnerability, highlighting the need for differentiated policy approaches by hospital type. This research demonstrates that centralized procurement can achieve dual objectives — reducing costs while potentially expanding market participation—but only when accompanied by appropriate policy safeguards. The divergent effects observed between first-line and second-line TB drugs indicate that uniform procurement approaches may produce unintended market consequences, particularly for essential medicines with narrow profit margins and low commercial attractiveness. For policymakers, our findings support three key recommendations aligned with the Global Plan to End TB 2023–2030: First, procurement frameworks should incorporate supplier diversity as a secondary evaluation criterion alongside price, implementing multi-winner tender designs that preserve competitive pressure while maintaining supply resilience. Second, given the heightened market concentration in TB-specialized hospitals, targeted interventions—including strategic stockpiles and supplier qualification programs—should be prioritized for medicines critical to drug-resistant TB treatment regimens. Third, regular monitoring of market structure indicators (HHI, manufacturer counts) should be integrated into NCDP evaluation frameworks to enable early detection and correction of excessive concentration trends. For future research, this study establishes the importance of stratified analyses when evaluating centralized procurement policies. Correlating procurement data with clinical outcomes, drug-resistance surveillance, and pharmaceutical innovation metrics will provide a more comprehensive understanding of how NCDP shapes the TB care landscape. Such integrated assessments are essential for optimizing procurement policies that balance immediate affordability gains with long-term supply security and continued therapeutic innovation in the fight against tuberculosis.