Drug price dynamics following changes in procurement method in the public healthcare setting in Malaysia

Pooled and segmented procurement are common in public health, but changing needs may prompt method shifts. Understanding their impact on drug prices is crucial for informed policy decisions. This study aimed to evaluate the impact of procurement method changes from pooled to segmented (P → S) and from segmented to pooled (S → P) on drug prices within Malaysia's public health sector. A five-year retrospective analysis was conducted using data from eight therapeutic subgroups, covering 73 drugs and 151 comparative procurements. The product price index measured price changes between procurement groups, and differences in probabilities and price index were assessed using Pearson Chi-square and Mann-Whitney U tests. The significance level was p < 0.05. Out of 151 comparative procurements, 48.34% (n = 73) were P → S, and 51.66% (n = 78) were S → P. Significant differences were found in all pairwise comparisons between the groups for changes in drug prices. Specifically, the proportion of procurements with price decreases was significantly higher in the S → P group (79.49%) than in the P → S group (30.14%) (p < 0.0005), while price increases were more frequent in the P → S group (50.68% vs. 15.38%, p < 0.0005). Price stability was also more commonly observed in the P → S group (19.18%) than in the S → P group (5.13%) (p = 0.008). Overall, the P → S group had statistically significant higher mean ranks of 101.08 than the S → P group (mean rank = 52.53) with U = 151, z = -6.824, p < 0.0005, indicating that the S → P group tended to have lower prices on average than the P → S group. Pooled procurement potentially saves costs over segmented methods, but understanding both options' pros and cons is crucial for tailored solutions.